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:

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 1605

"We visit Barcelona, one of the smartest cities in the world, to find out what makes it so special. What does it look like and what is the future?"

E&T jobs

  • Senior Development Engineer, Electronics

    Premium job

    Helmet Integrated Systems / Gentex Corporation
    • Letchworth Garden City, Hertfordshire
    • Competitive

    We are an innovative, robust and fast growing business, whose main focus is to deliver continues improvement to existing products and offer new sol..

    • Recruiter: Helmet Integrated Systems / Gentex Corporation

    Apply for this job

  • Smart Grid Research Engineer

    Premium job

    University of Strathclyde
    • Cumbernauld, Glasgow
    • Grade: 6/7* £26,537 - £37,768*

    Work as part of a growing dynamic team on a wide range of technical projects with particular emphasis on experimental validation and testing

    • Recruiter: University of Strathclyde

    Apply for this job

  • Electrical Asset Specialist

    Affinity Water
    • Hatfield, Hertfordshire

    Responsible for updating and writing electrical engineering standards, approved codes of practice and safe systems of work

    • Recruiter: Affinity Water

    Apply for this job

  • Senior Electronics Engineer

    York Instruments
    • York, North Yorkshire

    Senior electronics engineer to work as part of a team developing an MEG imaging system; working with the engineering team and external contractors.

    • Recruiter: York Instruments

    Apply for this job

  • Manufacturing Engineer - Circuit Card Assembly

    • Lostock Junction
    • Competitive Salary & Benefits

    What’s the opportunity?   Manufacturing UK is an integral part of the Operations Directorate whose principal mission is to ensure that MBDA’s deliverable commitments are met...

    • Recruiter: MBDA

    Apply for this job

  • High Voltage Engineer

    Premium job

    Essex X-Ray & Medical Equipment
    • Great Dunmow, Essex

    This High Voltage Engineer will provide design leadership for high voltage cable assemblies up to one megavolt.

    • Recruiter: Essex X-Ray & Medical Equipment

    Apply for this job

  • Team Leader - Flank Arrays

    BAE Systems
    • Barrow-In-Furness, Cumbria, England
    • Negotiable

    Team Leader - Flank Arrays Would you like to work in a unique role within the construction of the Astute Class submarines? We currently have a vacancy for a Team Leader - Flank Arrays at our site in Barrow-in-Furness. As a Team Leader - Flank Arrays, you

    • Recruiter: BAE Systems

    Apply for this job

  • Electronics and Software Engineer

    Copley Scientific Ltd
    • Nottingham
    • circa £35,000 per annum + bonus

    Develop new test equipment for the pharmaceutical industry. Good opportunities to grow and develop. Successful family-owned and managed business.

    • Recruiter: Copley Scientific Ltd

    Apply for this job

  • Bridge Test Facility Manager

    BAE Systems
    • Shropshire, Telford, England
    • Negotiable

    Bridge Test Facility ManagerWe currently have a vacancy for a Bridge Test Facility Manager at our site in Telford with our Land UK business.As the Bridge Test Facility Manager, you will be part of our Test & Trials team, working closely with the Mili

    • Recruiter: BAE Systems

    Apply for this job

  • Intelligent Transport Systems Engineer - Highways Technology

    Premium job

    Mott MacDonald
    • Birmingham, West Midlands

    Our transport technology team in Birmingham is currently growing a highly skilled and customer-focused team to...

    • Recruiter: Mott MacDonald

    Apply for this job

More jobs ▶


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

Subscribe to E&T