Beacon is a physical transmitter technology that works with Bluetooth Low Energy [BLE] to provide location-based services in an indoor setting. Sounds a lot like Global Positioning or GPS right? Well, in a way it is but there are important differences.
GPS systems use satellites and signals from devices to pinpoint locations outside, whereas Beacon uses transmitters that sense when a mobile device with Bluetooth active passes a sensor in an indoor setting. GPS has an almost unlimited range while Beacon’s transmitters have a much smaller range.
How is Beacon used?
FourSquare is a social media app for smartphones that require location-based services to be turned on. Then it uses GPS technology to identify the location of the mobile device to suggest local points of interests, services or even restaurants. GasBuddy, another location-based app, looks at your current location and returns the gas prices of each gas station within a given area.
Beacon functions in a similar manner. For example, iBeacon is Apple’s version of Beacon technology and is designed to sense when a consumer is nearing any one of a store’s transmitters via their mobile device. Beacon can report where a consumer is within the store, how long they stay in a particular area and their movement pattern around the store. Furthermore, Beacon can send messages to the handset of the consumer when they are in proximity to the transmitters.
Almost any indoor venue can use iBeacon to improve a consumer’s shopping or entertainment experience. Sporting arenas have been quick to adopt Beacon technology to entice ticket holders to upgrade to higher priced, better quality seating that is available by setting up messages that are sent out when transmitters pickup the consumer’s Bluetooth signal.
A Win for Marketers and Retailers
Beacon technology could they key to providing in-store retailers the analytic capacity that, until now, was only available to online merchants. According to Will Smith, CEO of Euclid Analytics, his company’s aim is to “do for retailers what Google and Amazon have done online forever, improve the shopping experience through data”. This technology could be very lucrative in competing with online stores as well as other physical stores and high-profile retailers such as Macy’s and American Eagle Outfitters, along with Major League Baseball and the National Football League, are paying attention.
Retailers can use Beacon and related systems to track “products, staff, shopper browsing patterns, and store layouts.” When a consumer is near a transmitter, a Beacon can send a coupon to the handset or send additional product information based upon where the handset is located within the store. If a consumer is in the mall outside of a store, the Beacon can send a message to the handset notifying the consumer of a special or sale. Based upon the ID of the handset, retailers are also able to determine if it is a first time customer or frequent shopper.
Additional customer service oriented benefits of Beacon include travel notifications for “departures, delays, and gate and platform assignments can be delivered instantly to passenger phones“. Wouldn’t it be great to have a message automatically update your handset to tell you what carousel your baggage is arriving at or if there was a gate change or flight cancellation? Sure it would but there is a price to be paid and it is the same price as most emerging media asks — your privacy.
Consumer Impact: Benefits and Privacy Concerns
One of the biggest hurdles is adoption. No, adoption issues are not from retailers or marketers, after all what retailer/marketer in their right mind would say no to improved customer insight or an opportunity to influence a purchase? The adoption or opt-in rate barrier is on the consumer side. There are some consumers who value some semblance of privacy. Apple’s implementation of iBeacon in the iPhone 5 removes the opt-in barrier. Once a consumer downloads and app, they have opted-in and Beacon’s messages may be delivered even with the app in a closed state. In order to “opt-out” iPhone owners would be required to “uninstall the app, re-set the location permissions or shut of Bluetooth“.
Privacy dinosaurs can sleep in peace knowing that Beacons do not collect data from iPhones. Beacon technology is only able, at this time, to send data or messages to handsets while providing handset apps that use iBeacon location data. According to Cult of Mac blogger, Mike Elgen, “Any reporting of location, any transmission of data, any downloading of data happens through your phone’s WiFi or mobile broadband connection, controlled by the app and governed by the permissions you’ve granted” thus privacy is in the hand of the mobile owner.
Perhaps the ultimate benefit would be a transmitter mounted at the front door to notify you when your in-laws were approaching to enable you to sneak out the back door.