Are you keeping up with the rapid advancement of the internet of things (IoT)? Such as beacon technology ideas being introduced into the retail industry now? Or are you the one who likes to wait and let others perfect the technology and its application? Either way, read on or we will tell you some facts that may help with your decision.
To improve is to change; to perfect is to change often.
What are beacons and beacon technology?
Beacons are a new type of device that could change the way people shop in stores and revolutionize how retailers collect consumer data and interact with shoppers.
A beacon is wireless sensor that uses Bluetooth Low Energy (BLE) — also known as Bluetooth Smart — to transmit data that Bluetooth-enabled smartphones can detect so that an action can be performed, such as sending a notification through an app. BLE has made wide-spread adoption and use of the technology possible as this type of Bluetooth reduces the drain on battery life and allows the signal to go through walls or other physical barriers.
Beacons do not receive information; they only send it, and they can only do so when the person has downloaded an app and enabled notifications. Almost 90% of all mobile phones sold today are Bluetooth enabled.
Each beacon has a unique identifier that a Bluetooth-enabled smartphone can detect to determine signal strength and asses how close in proximity a person’s device is to the beacon. This is so the system can identify which beacon a person is closest to so it can send the rightapp notification. If the technology was not precise, app notifications would be irrelevant.
Once in proximity to a beacon it’s programmed to recognize, apps can trigger messages customized to the users’ attributes to delivery highly relevant one-on-one communication.
Note: There is one thing that needs clarification: An iBeacon is not a beacon. It is the Apple term for the software protocols its iPhones, iPads, Watches, and other devices use to scan for Bluetooth devices. It also can be used to describe the user experience of beacon technology. But Apple does have one key feature that has interesting applications: an iPhone, iPad, or iPod can become an iBeacon.
Beacon technology … business of wayfinding
Location-aware technology came about when an app development company, Meridian, was tasked with developing an app for New York’s American Museum of Natural History. The museum needed something that would both provide users with a layout of the building (which spans 570,000 square feet) and show the person’s location within it. Surprisingly, indoor positioning on an iPhone like this had not been done before.
It installed more than 300 Wi-Fi devices that could triangulate a person’s location so they could see their individual blue dot on the map.
The adoption of BLE would eventually replace the use of Wi-Fi like this, but these advances also expanded the possibilities for developers by creating standard location tools and technology.
Meridian evolved to become a web-based software platform that gives app makers and developers the tools they need to create location features within apps. This includes elements such as turn-by-turn navigation, location awareness, and sending custom messages based on where a person is within a location.
This back-end management system gives brands the ability to update their app with changes, such as the closure of a bathroom or elevator.
Why are beacons creating such a fuss?
Beacons can be used to power indoor maps, payments services, and location-sensitive product catalogs. There are many different beacon hardware vendors and systems — including Apple’s iBeacon system — but they all share some basic characteristics. Namely, they allow retailers and event organizers to efficiently communicate indoors, without a need for GPS.
Clearly, beacon technology is brilliant for pushing content — in-store welcome greetings, sale alerts, special offers, discounts and product information are easy with the device. While the technology has not yet penetrated the marketplace, its further implications are huge. A Forrester Research report from March 2014 titled “The Emergence of Beacons in Retail Get Elastic” offered other compelling reasons retailers should strongly consider beacon technology:
Customers as transmitters
Since beacons can facilitate person-to-person communication, sales associates can in effect be paged by customers who need assistance and dispatched where they can offer the most expertise.
Beacons can offer turn-by-turn directions to help customers find products. This feature can sync up with a Wish List and guide customers to the items on that list.
Retailers will also be able to collect more data on in-store behavior and optimize marketing and merchandising. Information related to frequency of store visits, cross-channel buying and demographics such as age, sex and household income are all retrievable.
Beacon technology allows marketers to measure the impact of mobile advertising exposure on in-store sales. An ecommerce platform could pull out mobile location data via a beacon and match it to ads in the area.
There’s strong potential for “gamification” with beacons; think scavenger hunts, treasure maps, Easter egg hunts, etc.
PayPal’s beacon notifies retailers when a customer with the app enters the store, and a point-of-sale beacon interacts with the app to complete their transaction.
Beacon technology … what are the challenges ahead?
While there is great potential for beacons, there are immediate (and quite challenging) issues to be resolved. Ask yourself this question — what is valuable enough to you as a consumer that you would not only keep your smartphone location turned on at all times, but you would also happily download and install (with certain permissions) at least one app that listens for BLE signals?
The company ShopAdvisor conducted a survey of female shoppers to answer this question. They were asked to respond to a series of scenarios to determine which would get them to “cooperate” in the context of proximity marketing — turn location on their smartphone and download a specific app. Their answers were consistent. The value received in exchange for action had to be personally and contextually relevant. The deal had to be for something they intended to shop for, or for a nearby store they liked to shop in.
Consider an example of Internet Privacy
Running a business today almost certainly means having a digital presence, and being connected to the Internet. While the benefits of this transformation are many, the Internet privacy and security issues are still a daily challenge, with many solutions in the marketplace to address them.
Now internet service providers can sell the browsing habits of their customers to advertisers. It is a move which critics charge will fundamentally undermine consumer privacy in the US.
Yes, internet service providers (ISPs) such as Comcast, Verizon, and AT&T are free to track all your browsing behavior and sell it to advertisers without consent. ISPs have access to literally all of your browsing behavior – they act as a gateway for all of your web visits, clicks, searches, app downloads and video streams.
This represents a huge treasure trove of personal data, including health concerns, shopping habits and porn preferences. ISPs want to use this data to deliver personalized advertising.
Despite all of its exciting possibilities, beacon technology is not without obstacles. For one, there are a number of layers of permissions that consumers must allow. Bluetooth must be turned on, location services must be accepted for the app, the phone and operating system must be current, and customers must also opt in to receive notifications from the retailer or business.
Because of these obstacles, 10 million-plus installs is ideal for a national beacon campaign; local campaigns will need even more installs to be viable. If this isn’t feasible, businesses should consider an emerging SDK (software development kit) network that leverages other apps for finding your beacons and locations. Compatibility with both Android and iOS should also be considered.
Beacon technology solutions … research findings
In a recent Business Insider they summarized their research results as follows:
Retail outlets are adopting beacons to provide customers with product information, flash sales or deals, and to speed up the checkout process with a completely contactless payments system.
Half of American adults already utilize their mobile devices in stores.
But there’s a barrier to wide adoption of beacon technology: several layers of permissions
Customers have to turn on Bluetooth, accept location services on the relevant app and opt-in to receive in-store or indoor notifications.
Apple hasn’t manufactured a physical beacon. Instead, Apple’s iBeacon is built into its devices and iOS7 mobile operating system. Already, 200 million iOS devices can already serve as transmitters and receivers. But third-party manufacturers have built beacons that can send iBeacon messages to Apple devices.
Related post: Game Changing Capabilities for In-Store Retail Business
The beacon wars are heating up. PayPal and Qualcomm are gearing up to challenge Apple with beacon hardware of their own. Smaller vendors like Estimote, Swirl, and GPShopper are entering the mix with beacon management and consulting on top of hardware or software platforms.
We expect beacons to be deployed all over airports and ground transit hubs so that notifications on departures, delays, and gate and platform assignments can be delivered instantly to passenger phones.
Lots to learn about this exciting technology, isn’t there? Are there ways it can help your business?
Need some help in finding ways to grow your customers? Such as creative ideas to help the differentiation with potential customers? Or perhaps finding ways to work with other businesses?
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So what’s the conclusion? The conclusion is there is no conclusion. There is only the next step. And that next step is completely up to you. But believe in the effectiveness of collaborative innovation. And put it to good use in adapting to changes in your business environment.
It’s up to you to keep improving your learning and experience with innovation and creativity efforts. Lessons are all around you. In this case, your competitor may be providing the ideas and or inspiration. But the key is in knowing that it is within you already.
All you get is what you bring to the fight. And that fight gets better every day you learn and apply new lessons.
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Mike Schoultz is the founder of Digital Spark Marketing, a digital marketing and customer service agency. With 40 years of business experience, he blogs on topics that relate to improving the performance of your business. Find them on G+, Twitter, and LinkedIn.
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