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iBeacon – Has "Minority Report" Finally Arrived?

  |  March 24, 2014   |  Comments   |  

iBeacon is a micro-location and positioning protocol that lets your phone interact with low power transmitters (or beacons) placed in strategic locations. But how does iBeacon work and how will it benefit marketers?

What Is It?

Fans of the movie Minority Report will remember the scene where our hero enters a branch of Gap, has his iris scanned, and is immediately served up personalized and custom messages.

Released as part of iOS7, iBeacon is a micro-location and positioning protocol that lets your phone interact with low power transmitters (or beacons) placed in strategic locations. This places your location down to a few centimeters, which can then facilitate push messaging or other forms of interaction and service such as pushing a coupon to users who have relevant apps installed.

How Does It Work?

It uses a protocol called Bluetooth Low Energy (BLE), allowing the beacons to talk to your phone and establish your precise position. Apps on your phone can then pull down target messaging and content relating to that very location and timing.

A lot of things can be a beacon, such as small battery-powered devices that you stick on a wall, USB sticks that plug into a POS device, or a purely software-based version that any appropriate hardware can use.

Locations of users can be classified into three levels of proximity:

  • Far: Around 5 to 70 meters, which in a retail context puts you in the store or on a floor perhaps.
  • Near: Within 2 to 3 meters, has down to a department, an aisle, or a counter.
  • Immediate: Around 10 centimeters away, which pretty much has your nose in a specific product.

With beacon devices already being sold in packs of three for $99, kitting out your environment with iBeacon is not prohibitively expensive and the benefit of BLE, as the name suggests, is low power consumption. Which means, they say, your batteries might last for a couple of years.

How Might We All Benefit?

Retail : Attention always seems to turn to retail and the corporate need to sell us more. Apple is already kitting out their stores, allowing them to welcome individuals to the store and drive a more enabled and interactive experience and access to product information. Importantly, there's a streamlined payment process where you simply scan a product and pay for it with a card held on file and you are issued a digital receipt. And off you go.

The micro-location support for a retail assistance app seems like the perfect extension. With smarter, faster decision support, iBeacon picks you up looking at a product range, a quick check of your sales history suggests that this might be a first-time purchase, and bingo, a coupon is sent down to your phone and into your Passbook.

Smart online retail is here and now. Retailers have already honed their skills at real-time online marketing and selling. The ability to migrate the same skills back into the store will be an important part of keeping bricks and mortar attractive and relevant.

Museums and Galleries: Away from selling stuff, museums and galleries have huge potential to make a visit more personal and more interactive. Download the app, which perhaps also covers your cost of admission, and once inside you are treated to a personally guided multimedia and interactive tour that covers every exhibit and collection.

Airport: Most people would welcome anything that genuinely improves the user’s experience at the airport. Imagine:

  • As you enter the airport, your app guides you to the bag drop for your airline and flight.
  • As you hit the security screening, as a premium passenger you are directed by your phone to a special express lane.
  • The beacon in the lounge lets you know that you have a couple of colleagues nearby, to either meet or avoid!
  • As you continue toward the gate, you pass carefully selected retailers that offer you target coupons and deals.
  • And as soon as you hit the gate, you are messaged asking you to approach the agent for your upgrade.
  • On arrival, finding your rental car in that huge parking lot is a complete breeze and you are on your way.

Stadiums and Sports Events: Sports stadiums are starting to install iBeacons. Knowing where your fans are sitting and what premium seats remain unsold allows you to offer target customers seat upgrades and with precise location. Food and beverage and merchandise sales to seats can be targeted and ordered via an app.

At Home: Perhaps one of the most interesting developments is in an increasingly intelligent and wireless home and iBeacons have a role to play here. Coordinating devices around the house to control gaming, entertainment, music, climate, and lighting as you walk from room to room or from house to house.

Are There Downsides?

Back to Minority Report - remember the scene where our hero is bombarded with messages as he walks though the mall? There is a real risk that everyone will be trying to sell you stuff all the time.

This sort of messaging does need to be used responsibly. If you are being hit up by a retailer and an app, even when it’s turned off, every time you walk through a store, this could get pretty annoying. The obvious solution to this would be to delete the app, which takes the relationship a huge step backward. This is equivalent to the irresponsible emailer being cosigned to the spam box.

One other downside is that it does need Bluetooth to be activated on the phone for this to work. Usage of Bluetooth can be limited; some estimates suggest only around 30 percent of users regularly have it turned on. This may mean that the whole proposition might just pass many people by completely.

So careful messaging that really does offer real location-sensitive benefits, which then get talked about, might get acceptance up and Bluetooth turned on.

What Is the End Game?

You can be pretty sure that smarter, faster retail marketing and other experiences are here for good and micro-location will be a part of this. But are we looking at another standards war?

We have wondered for a while why Apple has never really embraced NFC (Near Field Communication). And now we know why. Whilst they have made their technology available to other platforms like Android, a debate continues as to the relative merits of iBeacon and NFC or other contenders such as PayPal’s Beacon. Where standards are clear and universal we see faster progress. Where they are not, we will see hesitancy and delay.

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ABOUT THE AUTHOR

Stephen Hay

Stephen Hay is Asia Pacific regional director for ICLP, the award-winning global loyalty and customer relationship management (CRM) agency. Stephen came into loyalty at Cathay Pacific when e-mail was still something that people in research labs used to send to each other and direct mail was still king.

ICLP works with some of the world's leading customer-focused brands, including Cathay Pacific, Mandarin Oriental, and Juniper Networks; looking to bring brands and customers closer together into a more mutually beneficial and more profitable relationship. Stephen takes a customer point of view on almost everything, not always universally popular, but proven time and again to be the basis for a sustainable, profitable, long-term relationship.

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