Being smothered in a cloud of hype surrounding a worldwide release for Apple’s iPhone 6, it is easy to forget just how many up-and-coming creations now sport the ‘i’ prefix. For wearable tech, try the new iWatch for size. For retail? There’s even an Apple-branded fit for that.
So-called ‘iBeacon’ devices have recently been subject to forensic examination by numerous vlogs explaining how they work and what they mean. Yet all the conversation comes without the level of adoption that would see them entering the public eye.
Although Apple does not actually have a beacon product on sale, makers of these tiny Bluetooth signal transmitters have decided to retain the ‘i’ for credibility after the consumer electronics giant secured a patent for what the Washington Post describes as an operating system feature that could “change the world forever”. The reason? To have an army of beacon devices link up with Apple’s mobile applications for delivering contextual, relevant information to users of iOS 7, which was the first OS to boast iBeacon support.
Companies including Nokia have experimented with various forms of beacon technology in the past but none have put quite so much at stake by testing it in a highly exposed environment, with real customers, as Apple did with its physical store trials in December 2013. The next natural step will be for brands to sign up to iBeacon deployment in their own offline spaces. Though rather than hand this over to their own research teams, there is a good case to argue that shopping centres should be leading this particular revolution.
Background
For an idea of how a typical iBeacon goes to work, watch the below clip from Cnet.com as part of its own report on the emerging technology.
The mention of a Bluetooth Low Energy (BLE) solution might cause a few raised eyebrows at your local pub, but the concept is relatively simple. Each iBeacon emits a signal which can be picked up by mobile devices entering an assigned radius. This alerts an iBeacon-connected app, which then sends out a specific message to users with their push notifications turned on.
Third-party beacon manufacturers have also banished Apple’s chokehold on their products by linking the devices to Android 4.3 and above. The ‘i’ only serves as extra advertising for the company, which, in an attempt to distance itself from issues with suppliers offering support for Apple as well as Android devices through the Bluetooth Smart proximity profile, has actually started issuing vendors with guidelines on what makes an ‘i’-branded BLE device.
Perhaps one of the more obvious uses of beacon technology in retail could be to deliver money-off coupons that work with in-store promotions. Beyond this, a retailer could offer a small discount on all lines for those passing by within a certain time period. Call it a happy hour for tech-savvy consumers.
The early adopters could reap huge rewards in piloting innovative iBeacon schemes that capture their customers’ imaginations and encourage them to spread word of mouth. So why should shopping centres feel the need to seek involvement beyond allowing their tenants to push on with their ideas?
The umbrella method
To put it bluntly, the early progress and general reception of in-store apps would indicate that retailers cannot go it alone. App-led offline shopping experiences may well have a future in retail but, if retailers go down the route of using their own programs, there is an argument to suggest it won’t be any time soon. There are clear flaws if consumers are forced to carry tens of apps for iBeacon usage, causing advocates of the technology to favour deployment via network rather than by store.
A prime example is CPA Group, which is in the process of introducing iBeacon technology to PerformanceIN’s homeland of Bristol via an app called Shufdy. This serves the city’s tourism sector by delivering relevant information to users once they pass BLE devices attached to well-known landmarks. Simon Richardson, director at Shufdy parent company CPA Group, says his firm is even going as far as telling retailers to hold tight with their iBeacon plans.
“We have advised some retailers not to consider iBeacons yet. Think about a big retail park or mall. If the retailers go off and invest in iBeacons and apps then are the users really going to download an app for every store? Of course not.
“We’re working with partners to bring in wide-scale, even city-wide iBeacon networks and that’s where we see the bulk of the opportunity.”
Picturing hundreds of beacons hooked-up to just one app makes it easy to see where the likes of CPA are coming from. Shopping centres could become publishers in their own right, linking up with retailers to broadcast their offers and various information to consumers passing certain stores. And that is where things get interesting.
App angle
For possible sponsorship opportunities they need not look any further than Britain’s growing population of voucher sites. Guilio Montemagno, senior vice president of discount publisher RetailMeNot, sees huge potential in leasing entire iBeacon networks out over the busy Christmas period as thousands of Brits go on the search for a bargain.
“For retailers, Christmas is a make-or-break season and using location-based technology to promote offers and vouchers can boost valuable sales this year, in a way we haven’t seen previously.
He continues: “What it comes down to is the customer journey. By using this location-based technology, retailers can make the route to purchase much smoother, sending relevant offers straight to a consumer’s smartphone or tablet while they’re shopping on high street.”
App developers are at the forefront of this debate, and even they are adamant that iBeacon deployment is best trusted with the umbrella method. Chris Tingley, technical director at app developer Conjure, adds that new, perhaps less recognisable members of the high street are unlikely to see high uptake for their apps as people may not have heard of their brand.
“This presents a huge opportunity for shopping centres to take the lead and put beacon technology for stores under one app, just as they have put them under the same roof,” he says.
“A consumer would be far more likely to download one app for their favourite shopping centre if that app gives them access to offers and product information from all shops in that shopping centre.”
Some obvious and perhaps tense conversations about commissions and retailer dos and don’ts would need to take place, but it is not hard to see that having the technology broadcast information from tens of stores through just one app will aid user adoption.
Advantages
For retailers, the reasons for signing up to a shopping centre-wide iBeacon network are plentiful. Consider additional product information popping up while consumers scan their eyes across a particular item – a technique used by Apple in its own store trials. Out goes the high-pitched screech to spread word of a 20% off promotion for all items in stock; in comes the timely mobile notification to clarify as much, delivered straight to each consumer’s pocket.
Aside from the potential for stores, think individual brands and their lack of a dedicated place to sell. Only a select few consumers will be aware of a certain item’s presence within a department store or similar. Devices like iBeacons, some of which have ranges of around 70 metres plus, can bring these products out from the shelf and into the public eye.
Department stores in Europe can even take tips from the very leader of their global pack. Macy’s learnt of the benefits of using iBeacons in-store last year with a link-up to retail app Shopkick. The initiative saw the deployment of Bluetooth devices around stores in New York and San Francisco for sending relevant product information to users when they passed certain points. The devices are now set to be introduced to over 4,000 Macy’s stores in the US, creating the largest iBeacon deployment project to date.
App developers and publishers are also seeing great potential in iBeacons for powering new streams of revenue. Take the example of restaurant app Bookatable.com, which is partnering with American Express for a location-aware promotion at this year’s London Restaurant Festival. Operating between the event’s dates of 8-27 October, Bluetooth technology will allow users to receive information about deals and table availability through Bookatable.com’s mobile app when they are near a certain location.
Nick Brown, head of consumer product at Bookatable.com, said a surge in user engagement will duly result in the trial rolling out to other restaurants in the future. So with apps, publishers and brands on board, the only thing left is to create the offering, which may not be as easy as it seems.
Campaign management
Retailers are likely to see Bluetooth transmission as a cunning way of advertising to customers as they pass through their stores, but a high sense of value must be on offer
Miles Quitmann, chief commercial officer at location-based marketing solutions provider Proxama, has learned plenty about how consumers react to the hard sell and has been cautious about how his own company goes about delivering in-store offers.
“The opt-in nature of the technology (iBeacons) ensures that only consumers with an interest in a brand will receive notifications,” he states, alluding to the fact that users must enable their Bluetooth and push notifications to get involved.
Quitmann also has an idea of how stores and centres can ensure that each consumer is getting value from the service on offer. This stems from what consumers expect from modern-day apps, and what developers should look to provide.
“A good starting point would be to ask customers questions about how often they would like to be reminded of special offers when they download the application, ensuring they are happy with the technology.
“These retail apps should also have smart, self-learning technology built into them, enabling them to evolve to understand the types of content particular consumers want to receive. For example, if a consumer always dismisses special offers on tailored shirts, the app will stop sending deals on tailored shirts to their device.”
The saviour of retail?
Yet for all the potential of iBeacons and their ability to drive a highly measurable form of footfall, there are some dawning realisations in store for retailers who believe they hold all the answers to their prayers. Indeed, the consensus that iBeacon-enabled apps must be agile and user friendly raises a very interesting question about the technology they serve.
A quick search for iBeacon BLE devices on various web marketplaces returns an asking price of anywhere between £10 to £30. In most cases the price per unit is even cheaper with a bulk purchase, which is likely the option that shopping centres will go for. With this in mind, it is somewhat baffling that a device worth around the tenth of the retail price for a smartphone could be tipped to change the fortunes of an entire industry.
Even iBeacon advocates have concerns over some of the possible uses for the technology, and Richardson is particularly worried about the ambitious plans for transferring currency.
“The idea of using iBeacons as payment gateways is crazy. These devices are simply not secure enough to do any of the clever stuff. There have been various articles written about PayPal trialling iBeacons, but realistically all we can expect to do is to trigger an action based on proximity.”
For now, though, the emphasis is most definitely placed on helping iBeacons to engage with consumers. If the consensus among iBeacon deployers rings true, the next 12 months should see a long line of shopping centres piggyback onto the next big thing in location-based marketing. Here is hoping their tenants listen up.