vol 9, issue 4

Analysis: understanding the Big Beacon picture

9 May 2014
By Danny Bradbury
Share |
Human hand holding smartphone connected to the iBeacon system: a drinks voucher offer is displayed on the screen.

Having an app identify where it is makes a smartphone’s ID available to a retailer’s back-end systems - and identify its owner as a high-value customer.

Virgin Atlantic’s recent announcement that it would install Apple’s iBeacon technology around Heathrow airport is the start of something much bigger.

The airline brand will install Apple’s iBeacon technology around the airport so that it can pinpoint customers via their smartphones, and send them personalised information. The system works by using tiny radio beacons, which communicate with phones running the right applications using the Bluetooth Low Energy (BLE) protocol.

It’s a low-powered, transmit-only device that broadcasts its ID to nearby devices. When an enabled app picks that up, it means that the app knows a phone’s exact location in a building.

This is big news because in-building micro-location is the last frontier for companies already intoxicated by the possibilities of mobile marketing. For years now, we’ve been able to use consumer GPS technologies for around 10 metre accuracy. The commercial Skyhook service offers the same accuracy, but with improved in-building performance. But this is still not reliable or accurate enough for micro-location, which would be able to accurately locate people a couple of feet away from a transmitter.

It’s also important to remember that although Apple might have piloted iBeacon in its products, it isn’t exclusively an Apple technology. Others are ardently developing hardware implementations. Motorola announced an in-store radio communications platform of its own for shoppers that includes iBeacon support; Estimote also has its own compatible beacons, and others will surely come.

Retailers are interested, too. Manufacturers are rapidly pushing the technology – which can be embedded in everything from tablet devices through to tiny button-sized hardware transmitters – into retail outlets in the US.

One interesting aspect of this is who’s pushing them. Mobile shopping app firm inMarket pushed them into over 200 Safeway and Giant Eagle grocery chain outlets, for example, while ThirdShelf, a Montreal firm that provides back-end analytics and mobile loyalty apps for retail clients, has also been busy showcasing the possibilities of in-store beacon technologies.

The other group pushing micro-location technology is brands who are eager to build a rapport with their customers at the point when they have their wallets out. Virgin Atlantic’s impetus to get beacons into Heathrow is a prime example, and in the US, food manufacturer Zatarain’s is pushing promotional messages such as recipes directly to shoppers via inMarket’s platform when they get near its products on the shelf.

This begins to show the possibilities of beacon technology, which are beyond the dreams of most marketers. Having an app identify where it is makes your phone's ID available to the brand or retailer’s back-end systems, which can reference your customer records from it. That’s how the app will be able to offer you coupons on those jeans that would go well with that top you bought last month, and how a store could identify you as a high-value customer based on past purchases, and have hordes of gushy, commission-hungry shop assistants scurrying – heaven help us – to your aisle.

But will customers load these apps in the first place? Privacy is one concern. Once made fully aware of just how closely they’re being tracked, they may not want beacon-capable apps on their phones.

Retailers will have to offer significant value to overcome such fears. Loyalty schemes including coupons and rewards for repeat visits could be one solution, but loyalty apps haven’t done so well on mobile phones, according to LoyaltyOne, a research firm in Canada. It said last year that only 20 per cent of loyalty apps are used regularly on their phones.

The clincher here could be mobile payments. Apps that offer the chance to pay online in addition to offering loyalty rewards can do well in certain niches, such as high-frequency, low-value industries such as food. Mobile purchases now account for over 10 per cent of beverage chain Starbucks’ revenue, after the company introduced a mobile app that also offered loyalty rewards.

Brands and retailers have been vying for people’s home screen real estate because it’s such a valuable channel for their attention. Beacon technology – easily extendable into different brands’ own apps – could be the third component in a holy trinity for mobile apps, which will finally draw customers into their web.

Further information:
https://blog.virgin-atlantic.com/t5/Our-Future/Virgin-Atlantic-lights-the-way-with-Apple-s-iBeacon-technology/ba-p/26359

Share |
Related forum discussions
forum comment To start a discussion topic about this article, please log in or register.    

Latest Issue

E&T cover image 1607

"As the dust settles after the referendum result, we consider what happens next. We also look forward to an international summer of sport."

E&T jobs

  • Protection and Control Engineer

    SSE
    • Glasgow, Perth, Inverness or Aberdeen
    • £36,000 - £54,000 Plus Car and Bonus

    To ensure that the network continues to run effectively, we are looking to recruit a Protection and Control Engineer to join our existing teams....

    • Recruiter: SSE

    Apply for this job

  • Control Systems Engineer

    United Utilities
    • Lancaster, Lancashire
    • Up to £33415 + Comprehensive Benefits

    Provide ICA maintenance and engineering support to the Water & Wastewater Production

    • Recruiter: United Utilities

    Apply for this job

  • Principal Systems Engineer

    BAE Systems
    • England, Surrey, Frimley / Dorset, England, Weymouth
    • Competitive package

    Would you like to be involved in designing, developing, and delivering cutting edge combat systems for the world's most advanced military submarines? BAE Systems is recruiting Principal Systems Engineers

    • Recruiter: BAE Systems

    Apply for this job

  • Gas Terminal Engineer

    National Grid
    • Aberdeenshire, Scotland
    • £41000 - £49000 per year

    Gas Terminal Engineer (Oil/Gas/Petrochemical)- St. Fergus, Scotland - National GridSalary: £41-49k depending on experience, plus excellent benefits including: Performance Bonus, a generous pension scheme, flexible benefits, company car We currently have a

    • Recruiter: National Grid

    Apply for this job

  • Associate Network Opportunities

    Premium job

    Smarter Grid Solutions
    • Flexible but may need to spend time in Glasgow, London or New York offices

    We are always keen to work with relevant industry professionals on an associate basis.

    • Recruiter: Smarter Grid Solutions

    Apply for this job

  • Electronics & Control Systems Engineer

    Frazer-Nash Consultancy Ltd
    • Bristol, Burton, Glasgow, Plymouth, Warrington
    • £ Competitive + Benefits

    We are seeking talented Electronics Engineers at all career levels.

    • Recruiter: Frazer-Nash Consultancy Ltd

    Apply for this job

  • Control and Instrumentation Engineers

    Frazer-Nash Consultancy Ltd
    • Bristol, Burton, Glasgow, Gloucester
    • £ Competitive + Benefits

    Frazer-Nash is currently embarking on a period of significant growth of our electrical, electronics, control and instrumentation capability.

    • Recruiter: Frazer-Nash Consultancy Ltd

    Apply for this job

  • Engineering Officer

    Royal Air Force
    • Nationwide
    • £30k pay after initial training + £10k Golden Hello

    Responsible for the optimum performance of all RAF technology, and specialise in either Aerosystems or Communications Electronics.

    • Recruiter: Royal Air Force

    Apply for this job

  • Junior Automation Engineer

    GSK
    • Worthing, West Sussex

    Your job will directly contribute to the lives of patients receiving our products

    • Recruiter: GSK

    Apply for this job

  • E & I Craftspersons

    SGN
    • South East England

    An opportunity has arisen to recruit a number of experienced Electrical and Instrumentation Craftsperson’s....

    • Recruiter: SGN

    Apply for this job

More jobs ▶

Subscribe

Choose the way you would like to access the latest news and developments in your field.

Subscribe to E&T