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.
Winston Churchill
Most importantly, what business leaders need to understand about technology and artificial intelligence is that it is not inherently utopian or apocalyptic, but a business tool. Much like any other business tool, its performance is largely dependent on context and it is a leader’s job to help create that context.
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 a 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.
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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 right app 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 deliver 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 … the 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.
In-store GPS
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.
In-store analytics
Retailers will also be able to collect more data on in-store behavior and optimize marketing and merchandising.
Information related to the frequency of store visits, cross-channel buying and demographics such as age, sex and household income are all retrievable.
Cross-channel applications
Beacon technology allows marketers to measure the impact of mobile advertising exposure on in-store sales.
An e-commerce platform could pull out mobile location data via a beacon and match it to ads in the area.
Games
There’s strong potential for “gamification” with beacons; think scavenger hunts, treasure maps, Easter egg hunts, etc.
Point-of-sale
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.
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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:
In-store retail and offline payments are in the first wave of beacon applications
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.
