What is beacon technology?
A beacon is a powerful piece of hardware that’s transforming how retailers communicate with customers. It’s a portable, battery-powered Bluetooth device that can transmit prompts and messages directly to enabled tablets and smartphones. Apple has already developed its own beacon system (iBeacon), and a number of beacon apps are in development for Android.
Courtesy : Gimbal of Qualcomm
The Future of Retail Shopping and Marketing
How are beacons used? In addition to efficient payment processing, beacons can also provide retail customers with in-store alerts about products, sales and flash deals. They expedite the checkout process with an entirely contact-less system. Retailers also love that the beacon is highly affordable and portable. Cost is just £20 to £30 per beacon. Each is around the size of a matchbox and has battery and Bluetooth operation. A nationwide chain with 300 locations could outfit all of their stores with the technology for under £10,000.
Shoppers are already quite comfortable using their mobile devices in stores and they are receptive to beacons as a way to enhance the shopping experience. Instead of a physical beacon, Apple’s iBeacon is built into its iOS7 mobile operating system. Over 200 million iOS devices are already beacon-enabled, and third-party manufacturers are creating physical beacons compatible with both Apple and Android devices.
Opportunities in Beacon Technology
Picture Courtesy: VentureBeat & iBeacon
Clearly, beacon technology is brilliant for pushing content — in-store welcome greetings, sale alerts, special offers, discounts and product information are easy with the device. While the technology has not yet penetrated the marketplace, its further implications are huge. A Forrester Research report from March 2014 titled “The Emergence of Beacons in Retail Get Elastic” offered other compelling reasons retailers should strongly consider beacon technology:
The customers as a transmitter. Since beacons can facilitate person-to-person communication, sales associates can in effect be paged by customers who need assistance and dispatched where they can offer the most expertise.
In-store GPS. Beacons can offer turn-by-turn directions to help customers find products. This feature can sync up with a Wish List and guide customers to the items on that list.
In-store analytics. Retailers will also be able to collect more data on in-store behavior and optimize marketing and merchandising. Information related to frequency of store visits, cross-channel buying and demographics such as age, sex and household income are all retrievable.
Cross-channel applications. Beacon technology allows marketers to measure the impact of mobile advertising exposure on in-store sales. An ecommerce platform could pull out mobile location data via a beacon and match it to ads in the area.
Games. There’s strong potential for “gamification” with beacons; think scavenger hunts, treasure maps, Easter egg hunts, etc.
Point-of-sale. PayPal’s beacon notifies retailers when a customer with the app enters the store, and a point-of-sale beacon interacts with the app to complete their transaction.
Beyond Just Retail
There are a variety of non-retail applications for beacon technology as well. Aloft Hotels is testing it for enabling hotel guests to unlock hotel room doors via their smartphones. The Tesco company is trying out iBeacon to offer alerts, customer personalization and click-and-collect orders. Fashion retailer Kenneth Cole reported an increase in app use and offer redemption rates with iBeacon.
The Coca-Cola company is also exploring beacon technology for its marketing activity related to the World Cup. American Airlines is exploring use of the technology in this capacity. Sports stadiums, amusement parks and museums all see the potential for making the user experience at their facilities more dynamic through Beacon use. Future applications will also include the automation of homes; beacons can turn lights on or off, operate appliances, and open doors or window shades all with the tap of a smartphone screen.
Challenges for Beacon Technology
Despite all of its exciting possibilities, beacon technology is not without obstacles. For one, there are a number of layers of permissions that consumers must allow. Bluetooth must be turned on, location services must be accepted for the app, the phone and operating system must be current, and customers must also opt in to receive notifications from the retailer or business.
Because of these obstacles, 10 million-plus installs is ideal for a national beacon campaign; local campaigns will need even more installs to be viable. If this isn’t feasible, businesses should consider an emerging SDK (software development kit) network that leverages other apps for finding your beacons and locations. Compatibility with both Android and iOS should also be considered.
Choosing the Right Beacon Company
Since the birth of GPS, mobile marketing firms have been able to reach shoppers based upon their location. However, it wasn’t always accurate; it could fire off at the wrong time, and it tended to burn through battery life. With a primary goal of reaching shoppers, a company with a sound track record in microlocation solutions would likely be more effective than one that just sells beacon hardware.
There’s a fine line to walk between sharing company messages and not intruding on the user too much. Ideally, beacons should piggyback on existing consumer behavior and add value to real-world experiences. The goal is that the smartphone becomes a mobile concierge, enhancing the consumer’s day. Apps that annoy or come on too strong will inevitably get the “app death penalty” — they will be deleted.
Choosing a beacon model is all about your business needs. Is your customer base a prime audience for embracing this type of technology? Can you offer genuine value to the user, or will it just come across as a gimmick? Consider also whether a pay-per-beacon, pay-per-user or performance-based cost structure is best for you.
Security and Privacy Concerns
Beacon hijacking is an important issue to be aware of. It refers to others scanning for existing beacons and targeting retailers who are exposed. However, security measures are possible; make sure the provider locks down and protects their beacons so that you’re the only user. Despite these risks, consumers on the whole are very open to the technology; research confirms that 45% of mobile consumers wish to receive retailer messages via their smartphones.
Mobile Apps Pave the Way
The smartphone has been pivotal in making beacon technology a success story. The beacons themselves can be activated via a smartphone app. The software can be integrated into an existing mobile app via an SDK (software development kit). Finally, the BMS (beacon management system) functions as the core of the product. The mobile app is, in effect, the connecting link between the beacon service and the consumer.
There are already a number of dynamic beacon startups on the scene, including:
Provides real-world context via tiny sensors that allow app users to receive personalized actions and micro-location based notifications.
Radius Networks. www.radiusnetworks.com
Assists emerging location developers with kits, open-source code and pre-built applications, tutorials, low-cost hardware and testing and development procedures.
Roximity iBeacons. www.buyibeacons.com
Small, portable, easy to install, no internet connection needed, and its powerful battery lasts up to two years.
Hands-free payments make shopping easier than ever with one of the world’s most known and trusted payment processors.
One of the most advanced beacon management systems available to date.
Onyx Beacon. www.onyxbeacon.com
Allows for interaction with customers by offering them personalized, real-time, contextual information while at your location.
A context awareness platform enables companies to engage customers with personalized, relevant, timely content on their mobile devices to drive sales and brand loyalty.
How Can Openxcell Help?
An experienced partner is key to the successful implementation of beacon technology. OpenXcell is a leading mobile app development company in United States who understands the opportunities and technical challenges of beacon perfectly. If you are creating your own beacon technology start-up or business and need right partner to help you in design and development of app for beacon, contact OpenXcell. The add-on experience and knowledge of retail industry will help OpenXcell understand your challenges and concerns seamlessly. OpenXcell can assist in developing mobile apps that connect to beacon or any wearable devices. OpenXcell also understands the challenges inherent in creating mobile apps that connect with devices via wireless technology and location services. OpenXcell is ready to help make beacon technology success !