Broadening Retailers' Horizons with iBeacons

By Jeff Francis, Copper Mobile


At Apple's WWDC earlier this year, one seemingly minor announcement had many retailers and developers abuzz with anticipation - iBeacons.


While Apple did not highlight this new technology as prominently as others, many immediately saw huge potential in this nascent technology. And with the recent announcement of Apple Pay, there is even more untapped potential for brick-and-mortar retailers to improve consumers' experiences in-store while adding to their bottom lines.


Before getting into what can be done with iBeacons, though, it's useful to discuss how iBeacons actually work. A Beacon is a low-cost, small piece of hardware that utilizes battery-friendly, low-energy Bluetooth connections to monitor users' activities and transmit messages or prompts to those users' smartphones or tablets. iBeacons is the software component on those personal devices.


This is a huge step up over the current alternatives, which are GPS, near field communications (NFC) and cell-tower based. Often, users lose cell reception indoors or the tracking services become far less accurate. Furthermore, GPS and NFC tracking on iPhones and Android phones drain their respective batteries significantly. By using the newest iteration of the Bluetooth Low Energy (BLE) connection protocol, Apple has figured out how to enable this breakthrough concept without killing a user's battery in the process.


A Seamless Shopping Experience

The industries championing this technology initially are retail locations and offline payment providers. Retail companies want to be able to interact with shoppers while they're inside their stores. Research shows that at least 50 percent of shoppers use their phones to help them shop already - why not make that experience seamless?


Here is how it works. Say that you are in a clothing store and based on your buying history, your phone knows your size and what styles you prefer. Thanks to iBeacons, your device can send you a prompt telling you where to go in the store to look for those types of items.


There are countless ways this technology could be huge in many aspects of consumers' lives. Retailers like Macy's, Lord & Taylor and American Eagle have already moved forward with prototypes and are currently beta testing in their stores. Major grocery store chains have done the same with tests since the beginning of the year. iBeacons are also useful for consumers. They could automate their entire home to turn off lights and appliances once they leave and turn everything on once they get home. Transit systems could use them to alert travelers to delays or forecast surges in traffic based on the number of phones their Beacons detect. Sports and concert venues could use them to take a ticket and direct the ticketholder to his or her seat. The list of uses truly goes on and on.


Technology companies beyond Apple are taking notice as well. PayPal and Qualcomm are building hardware of their own while smaller vendors like Estimote, Swirl and GPShopper are entering the mix as well.


Success Relies on the Opt-In

There are, of course, still a few barriers to adoption. Namely, users have a lot of "opting-in" to do. They have to turn on location services, turn on BLE, accept location services on every relevant app and opt-in to receive notifications from those apps. This could hamper adoption by non-tech-savvy consumers.


Additionally, with a stream of privacy invasion articles about the NSA and private companies like Facebook, Google and Apple, it's tough to say whether consumers will tolerate this level of intrusive knowledge from companies. Do consumers really want Apple knowing everything about their every buying habit? How much information will Apple share with retailers so they can ping shoppers incessantly? Will the prompts actually prove useful, directing consumers to products or services they're likely to want? Or will they simply be blanket advertisements that users will tune out?


It's tough to say exactly how this technology will manifest itself over the coming months and years. There's little doubt, however, that it could be a real game-changer for many industries if consumers respond positively.


Jeff Francis is the co-founder and COO of Dallas-based Copper Mobile, a leading enterprise-centric mobile development firm that helps companies solve their business challenges with cutting-edge mobile solutions.