iBeacons – The Future of Retail or Just Another Technology Fad?

By Mike Zeederberg as published in Power Retail.

Bluetooth Low Energy or Bluetooth 4.0 beacons are being touted as the hot new multichannel device for retail operations, but will they really change the way people shop?

Over the last couple of weeks, there has suddenly been a huge amount of buzz around iBeacons, or Bluetooth Low Energy (BLE) as it’s technically called (my bet is that we’ll land up calling it iBeacon). First, Estimote announced low cost easily available beacons, then Macy’s announced its Shopkick app allowing you to interact in-store and two weeks ago, Apple turned on iBeacons in all its 254 American stores.

So is this all just another tech hype, or should retailers be rapidly re-evaluating their mobile/digital/in-store strategies to jump on the band wagon?

What is it?

Bluetooth Low Energy (BLE) or Bluetooth 4.0 beacons and iBeacons are effectively a beacon that transmits a signal every second to a Bluetooth Smart Ready device up to 100 metres away, and cost around $20 each at the moment. Typically, the receiver is a mobile phone or tablet, and the upside is that all iPhones from the 4S onwards, all third generation iPads and a wide variety of other devices are already Bluetooth 4.0 enabled.

This signal is detected by an app on the device and can then trigger a reaction of some sort. The technology is distance sensitive, so it can determine your location to within a few feet if implemented correctly. So it’s a bit like taking the best bits of GPS and RFID/NFC and mashing them together into something useful in a retail environment.

From a consumer perspective, we’re already seeing lots of enthusiasm for technologies like Tile, where you can attach them to anything and find it again with your phone (keys, bag, kid etc.).


Estimote’s own BLE hardware and software option

Why will this one work?

There are a few big differences between iBeacons and previous iterations of location detection/WiFi technologies.

  • It’s already here – with over 190 million active iOS devices in the world, the technology is already baked into devices in the market. And with Australia’s love of all things Apple, we’re a prime market.
  • It works on stuff other than Apples – BLE is also built into Android, Blackberrys and soon Windows phones – so anyone with a new-ish device will have it.
  • Every iPhone/iPad is a beacon. It’s not hard to make the device itself a beacon, so where retailers have already invested in in-store iPads for digital signage or in-store POS, these can very easily become beacons.
  • The beacons are relatively low cost, don’t need to be plugged in and will last for a reasonable amount of time
  • The beacons operating range and level of location accuracy is useful for marketing purposes.

How can it be used in a retail environment?

The first implementations are all around push marketing – Apple are using iBeacons to suggest trade-ins or push people to do reviews, and according to Forbes, the user experience isn’t great.

Shopkick, the system being used by Macy’s, Target, Old Navy and others, works on a reward system – you get “kicks” for completing actions, even basic ones like walking into store. It also sends you special offers and promotions, which if you take up, you can get more kicks. The kicks are redeemable for retailer gift cards and other products.

So why give away rewards for simply checking in in-store? It’s all about connecting the dots between online behavour and offline interactions/purchases. iBeacons can allow us to finally close the loop and understand how digital and offline behaviour work together.

However, the opportunities of iBeacon lie well beyond just in-store location based vouchering. Some possible scenarios include:

  • A user researching products online and then when instore, being guided to these quickly and easily
  • A customer being able to access detailed information, videos and specifications about a TV they’re looking at, simply by walking up to the unit
  • Easy in-store or in-centre navigation, with a blue dot on the map and turn-by-turn directions
  • Finding help – if store staff have activated their phones as iBeacons, they can easily be put on a map, along with their areas of specialism so customers can find them. No more having to rush up and down the isles of Bunnings chasing the overalled guy, only to find out that the Tools Specialist doesn’t know anything about plumbing.

An example of how Apple is using iBeacons in-store


The world starts opening up when you consider that the customers themselves can start being beacons. For example:

  • The customer standing in the returns queue uses the app to outline the product they’re bringing back, the reason why and links to the digital receipt. As they step up the counter, their ID and all the relevant info is immediately broadcast and the customer service person can simply accepts the item, smiles and confirms the digital credit.

So what’s the catch?

The biggest hurdle will be to get users to activate Bluetooth and ensure they’ve downloaded the app and provided permissions for location tracking. This means businesses will need to think through very carefully “What’s In It For Me” from the consumer perspective.

The “big data” implications are also interesting – most companies are not yet getting the most out of data they already have, so adding in a whole heap of new data simply adds to the problem.

It will all come down to working out a clear strategy about how to integrate iBeacons into your seamless omni-channel experience, and making sure that the content and contact strategy is well thought through before simply sticking up a few beacons and pushing vouchers.

The exciting part is that the technology is finally coming of age, and the retail businesses that get their customer engagement strategy right are going to be able to see huge benefits from the right implementations.

Mike Zeederberg
Mike Zeederberg
Mike Zeederberg is the Managing Director and joint owner of Zuni and oversees the development and delivery of most client strategic work.

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