Are iBeacons the future of retail shopping?

21 January 2014

Dan Hawker

Dan Hawker

Former Head of Tobacco, Wholesale & Retail

Location-aware mobile apps in a store environment have many benefits. For retailers, they are a way of micro-targeting shoppers with deals that are unique to them, to drive more business. They are a way of delivering the increasingly personal relationship that shoppers have come to expect. And they offer other insights into footfall and shopper behavior that can help them tailor the in-store experience to better suit their customers’ needs.

For shoppers, the offers that are presented to them are more personalised, which means less time trawling through offers that are not relevant, and more money saved. They may also gain offers that they wouldn’t previously have had, because the retailer understands them more.

Notwithstanding important challenges such as privacy concerns, it’s a win-win, isn’t it?

This is why location-aware mobile apps are becoming more and more mainstream, and it may be tempting to think the big questions have been answered, but here are 4 reasons to think again – especially for in-store apps, and especially around the role of Bluetooth and, more specifically, iBeacons.

1. It’s not about GPS

GPS doesn’t work well indoors, and in-store usually means indoors. Enough said.

2. It’s not just about Wi-Fi and NFC

There are ways of determining indoor location based on existing infrastructure, such as triangulating Wi-Fi signals, but these are not perfect. For example, Wi-Fi triangulation requires Wi-Fi to be switched on the mobile device. Furthermore, as Nordstrom found out, the fact that it is not optional (the shopper’s device is tracked whether they like it or not), can harm business rather than boost it. Facial recognition has privacy issues, too, and NFC has range limitations that some others don’t. As an alternative, Macy’s, Apple, and others have been using iBeacons to help their micro-targeting efforts. iBeacons use Bluetooth 4.0, or Bluetooth Low Energy (BLE) to create indoor zones that can be used by mobile apps to identify where a shopper is within a store. These zones have a range that is big enough to make sure mobile devices interact properly with them, and small enough to divide up a store into meaningful areas. Furthermore - unlike Wi-Fi triangulation – shoppers have to download an app and sign up for the service, so they have a choice to participate, which addresses a significant privacy concern.

3. The future is now

Have you noticed how a lot of retailers have installed iPads for in-store communication, and to use as tills? These iPads are capable of transmitting as iBeacons. Therefore, many retailers have already invested – unwittingly – in rolling out iBeacon infrastructure.

4. BLE – Bluetooth: Leave Everything (on)

One of the cons about a Bluetooth-enabled capability is that people don’t leave Bluetooth on as much as they might leave Wi-Fi on – partly because in the past it used to significantly shorten battery life. However, Bluetooth Low Energy – the clues in the name – is designed to consume low levels of energy. So it is possible to leave it on without too much downside. Efforts from the retailers mentioned in point 2 above will encourage people to think differently about Bluetooth, and they will get used to leaving it on, more quickly than you think.

So, if you’re considering your in-store mobile strategy, iBeacon should be on the list for consideration: its downsides might not be as bad as you think, and it could have some surprising upsides.

I’ve been impressed enough by the promise of iBeacon, that I’ve asked our current graduate intake to create a location-aware app using iBeacon (I even created an iBeacon myself using a Raspberry Pi), and I’ll be covering that in another blog.

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