Proximity Marketing and iBeacons: the future or overhyped?

By Channel Mobile

Beacons are small battery powered transmitters which use Bluetooth Low Energy technology embedded in the latest smartphones from Apple, Samsung and others to connect with apps on these phones when the phone gets within range (normally anything up to 20-60 metres), whether this app is active or not. The phone only needs to have Bluetooth activated and the app downloaded.

Once connected, the app uses the transmitted signal to estimate proximity to the beacon and precisely where the user is, which allows relevant content to be delivered based on exactly where the user is (sometimes referred to as ‘micro-location’). Interactions are logged so the business can retain data on customers’ behaviours and actions.

There are a number of ‘use cases’ for the retail sector which show how this could be used. These involve shoppers having promotions (or assistants!) aimed at them based on what they are looking at in a store, based on their location and even possibly their purchasing history. The recent research in March 2014 by Forrester Research Inc on The Emergence of Beacons in Retail suggests that retailers should look into using the technology for a number of reasons.

However, there is some research which indicates that the way forward isn’t that clear. See the Infographic from OpinionLab which indicates that most people aren’t happy with letting (any) retailers track them in store, primarily as they don’t trust retailers with their data – it feels like spying.
This is backed up by Tesco admitting that, while they are trialling this technology in their Chelmsford store, they are nervous about sending marketing messages to avoid scaring customers. Their MyStore app will instead focus initially on sending customers a message when they arrive to pick up pre-ordered goods. Mark Cody, senior group marketing manager for mobile at Tesco said that although their R&D team were investigating “everything and anything” but the opportunity for payments and travel was probably a couple of years from taking off.

In the early stages it is more important that people opt in to these services, and more will do so when the benefits are clear. In other areas such as tourism this technology can be used to enhance experience in theme parks, stadia, walks and tours by sending interesting and contextual information, and this will cause real visitors to download apps.

Other early applications will be enterprise based in areas such as engineering where high risk areas can be flagged, and logistics, where physical goods need to be checked in and out.

To push this technology beyond the experimenters will need the thinking, the incentives and the way the technology is used to evolve. This could include moving to wearable devices and also gamification of experiences possibly using augmented reality to provide incentives (Easter egg hunts or treasure hunts). Many corporate early adopters will make expensive mistakes – even Apple didn’t get it quite right, as reported by journalist Sebastien Page.