beacon technology: what brands and marketers need to know

b e acon tech nology

JUNE / 2014

What brands and marketers need to know

Ever since Apple introduced its own trademarked “iBeacon”

technology at their WWDC conference in 2013, marketers

and retailers around the world have been unable to clear a persistent ringing

from their ears.

In most cases, though, they’ve had trouble defining exactly

what that ringing is. So let us clear the air and state it as

simply as possible:

that ringing is the sound of a beacon-enabled future, one in which communication between brands and consumers is more

direct, and more physical, than any technology has ever

before allowed.

however, the technology is in its nascent stages. While

beacons themselves are straightforward, the creative potential and limitations of beacon technology remain

unclear. Most important, there has yet to be a well-defined

standard for a beacon-triggered user experience.

The full potential of beacon technology will take

experimentation time resources creativity

It’s not going to be “plug and play.”

what are beacons?how do they work?

bea · con n. /|bēkən/small, low-powered transmitters that communicate with smart devices in a predefined physical radius

The “iBeacon” nomenclature confusion arose in 2013, when Apple took Bluetooth LE technology and packaged it into iOS7 and all of their newest devices. Then, using their standard “i-Naming” convention, Apple effectively branded their version of the technology as “iBeacon.” While it is true that many beacon manufacturers are indeed working with Apple’s trademarked iBeacon technology, it should be noted that any Bluetooth LE-enabled device, including devices running Android, can interact with beacons.

Beacons tie physical location to content delivery, allowing brands to effectively trigger messages, promotional offers, or unique app experiences based on a user’s precise physical location.

Beacon technology was made possible and practical by the invention of Bluetooth LE, a low-cost, low-energy, proximity-based network that allows Bluetooth- enabled devices to interact with other devices without draining the battery of either.

GPSbeacon technology stands in contrast to GPS – which

is what most location–based services have used to this point – in that it uses proximity mapping rather

than satellites or cell tower triangulation to identify a user’s position. This means

that it can work effectively indoors, and if multiple

beacons are employed at once, can pinpoint a user’s location

down to centimeters.

NFCBeacon technology also

contrasts with NFC in that it can connect devices from

distances of more than a few inches and does not require the mobile device

to have an NFC chip. To give some perspective: NFC chips have found their way into

only a limited selection of phones, Apple’s not included, while Bluetooth is already incorporated into most.

BASIC Beacon INTERACTION

A preprogrammed signal is emitted from one beacon – let’s call it Device A – and whenever a second, Bluetooth-LE enabled mobile device, Device B, comes within a predetermined vicinity–whether it be one foot, five feet or fifty feet–Device A triggers a notification on Device B.

A

B

The signals coming from Device A, and the action it triggers in Device B, can be preprogrammed through a content management platform and can be changed, tailored and altered at any time.

The proximity at which an interaction is triggered can be pre-programmed to various intervals ranging from a few centimeters to nearly 50 meters, and the connection, in its most basic form, does not require Wi-Fi or Internet access.

The beacon devices themselves are just small devices–cheap, around $30 to $60, and of varied size, depending on the manufacturer–that contain computer chips. These chips emit a constant Bluetooth LE signal, which can then be recognized by a Bluetooth LE-enabled mobile device.

30$ 60$

how does the mobile device

hear the beacon?

In order for a user’s mobile device to receive the signal from a beacon:

beacons may not be the California gold rush, but they present a golden opportunity for brands and marketers with an explorative mindset.

1

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the user’s device must have an app listening for the beacon’s signal

Bluetooth must be turned on

the user must have granted the app permission to receive push notifications

why is beacon technology

revolutionary?

PeoPle are already comfortable with the idea of a content strategy for social [media], and beacons will simPly require a new content strategy for your Physical sPace. chad rodriguez,

sonic notify,beacon manufacturer

Beacon technology has the potential to fundamentally

disrupt the way brands think about the intersection of

physical retail experience and mobile experience.

To date, user-specific content strategy has been relegated

to online environments like social networks, where the

brand can either target individuals based on preference

or use retargeting campaigns that use browsing behavior

to dynamically create ad units.

A proximity-triggered content strategy for beacon-

enabled environments will, therefore, resemble the

complex, highly segmented content strategies that brands

and marketers have already learned to develop for social

media.

Beacon technology effectively adds a physical component to an already-existing targeted outreach strategy, allowing brands to reach a user based

on their precise physical location, in addition to every

other existing parameter.

using beacons wisely, retailers will be able to Play the Part of a gracious, individually attentive host, combining the users’ interests, intent and Physical location.

Retailers have become savvy at acquiring and cataloging an

endless amount of data on their customers’ browsing patterns,

areas of interest, and purchase intent.

Applied thoughtfully, beacons will allow retailers to

leverage this data in a physical environment, both to recognize customers as they enter a store, and to deliver custom-tailored content, offers, and experiences

as they progress through the aisles.

If a customer enters a physical space–retail or otherwise–

and a thoughtful, beacon-triggered message welcomes them

and anticipates their needs, it is likely that the customer will

enjoy the experience.

how are beacons being used today?

s p o rtsar e na s

r e tai ls pace ai r p o rts

liv i n g s pace s m u s e u m s

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s p o rtsar e nas

One of the most significant adopters of beacon

technology has been Major League Baseball,

which has implemented beacon technology in

2030of ballparks

it’s kind of a no-brainer.

mobile and digital

exPeriences are Paramount

to our fan exPerience.

beacons oPen uP a world of

Possibility. bill schlough

chief information officer san francisco giants

The MLB’s beacons communicate to fans through

the MLB AtTheBallpark app, which, once installed,

encourages fans to check in at entry points in order to

unlock special offers.

e ve ntar e as

At SXSW Interactive 2014, beacons were featured

prominently, not only as a method of providing

information, but also as a way of fostering a sense of

community among festival attendees.

Users who downloaded the official SXSW app – powered

by Eventbase – were treated to a smattering of beacon-

enabled perks, depending on their location. For instance,

those in the vicinity of the registration area, typically a

dreaded waiting zone, were given access via beacons to

a Registration Quickcode, thereby expediting the tedious

process.

Beacons were also used to bolster a sense of community

and even initiate group conversations among attendees.

If, for example, a user walked into a particular session, a

beacon in the room would trigger an invitation to an in-

app “chat room,” in which all of the users within range

of the beacon could engage in conversation. Festival

attendees and bloggers–often a tough crowd to sell on

new technology–generally responded favorably to the

use of beacons at SXSW, and some even suggested that

Eventbase could have been more aggressive with its

notifications.

Some of the most clever usage of beacon technology

has been through the creation of large-scale interactive

events and exhibits. At CES 2014 in Las Vegas, for instance,

beacons formed the backbone of an interactive scavenger

hunt; and in May 2014, beacons were used to create a

New York City Beacon-Crawl–a clever take on the popular

pub crawl–in which beacons are scattered throughout

bars and restaurants within the city, and participants are

rewarded upon entry.

r e tails pace

The greatest opportunity for beacons is within the retail

space, as the technology unveils an ability greater

than we’ve ever had to communicate with consumers entirely based on where they

are located in a store.

Surprisingly though, this is the area that has been the

slowest to grasp for the technology.

Shortly after announcing iBeacon, Apple introduced them into all 254 of their U.S.

brick-and-mortar stores, easily the most expansive implementation of the technology in the retail space. Upon entering an Apple store–with Bluetooth enabled and the Apple Store app installed–users are welcomed with links to EasyPay, support, and gift recommendations, all designed to make the shopping experience both easier and more interactive.

However, outside sources have reported that the technology’s implementation has been far more sparse–and less creative–than one might expect from the company effectively pushing the technology. Additional retailers, such as Macy’s and American Eagle, have also introduced beacons into their stores, but, again, their efforts have largely been on a trial basis and have not made extensive creative use of the technology.

what comes next?how can marketers

push forward?

REDEFINING HOW

CONSUMERS AND BRANDS THINK ABOUT BLUETOOTH LE

Many brands are concerned that consumers will, for fear

of battery loss, disable Bluetooth on their devices. And without Bluetooth enabled, a

brand’s app can’t listen for

beacons.

However, it is likely that Bluetooth

deactivation will become irrelevant:

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as consumers learn to disassociate its activation with decreased battery life,

as Apple’s vested interest in being a beacon leader matures.

as Apple – and perhaps Google as well – makes it far more difficult for users to disable Bluetooth, perhaps burying the toggle deeper into the general settings of the phone, or actively encouraging users to leave it enabled.

a user-first approach to push

notifications

Brands also worry that customers will be put

off, rather than pleased, by an increase in mobile

notifications. The fear of burdening consumers with a tidal wave of unwanted notifications is a genuine

concern, and marketers will undoubtedly have to rely on

common sense when designing their beacon environments.

Recent research indicates, though, that as long as notifications are kept

relevant, consumer friendly, and creative, they will be well

received by consumers.

72%of consumers say that a relevant mobile offer pushed to their smart device would significantly influence their decision to make a purchase

67%of consumers have received a push notification to their smart device over the past six months

79% made at least one purchase as a result

The mobile marketing platform Swirl conducted a

beacon study based on what we already know about

consumer behavior in a retail environment. Their findings

confirm that many consumers are open to notifications,

as brands can provide offers and perks that are relevant

to them and add value to their time in the store. A few

highlights from their study:

81% read or opened them most of the time

85%of consumers realize that online retailers track their shopping behavior, but accept that their doing so will result in relevant offers/promotions for the consumer

75%of consumers prefer that retailers use personal information, so long as it improves the shopping experience.

A similar study from Monetate–which focused on online

retail but studied the same general behaviors–went

even further to show that consumers are generally open

to having retailers interact with them, so long as such

interactions play a positive or helpful role in their shopping

experience. As that study shows:

GETTING AN APP IN THE CONSUMERS’

HANDS

After all is said and done, a Beacon interaction requires

a companion app on the user’s device. This has been

the most feared component of beacon technology for

large brands who, in order to benefit from the technology,

must first have a considerable audience of users on their

app.

Generally speaking, we know that branded apps from

retailers tend to see low usage, particularly in-store.

While they are often an excellent resource for engaging

customers at home (whether for browsing, gathering

product information, or compiling a wish list) retail-

focused apps have generally not shown their value in an

in-store context.

This is where beacons have the greatest potential, and

could not only change customers’ shopping experiences,

but could also lead to a more positive and sustained

engagement with a brand’s app. In a beacon-enabled

environment, a store’s app becomes the anchor for an

experience unlike any a customer has experienced in a

brick-and-mortar store. Assistance can arrive sooner,

offers can present themselves at only the most opportune

and relevant moments, and the checkout process itself

can be completely streamlined.

So to flip the argument on the app-doubters: if none of this

would be possible without the app, won’t customers want

to download the app just so that they can experience it?

KEY TAKEAWAYS FOR BRANDS

Beacons are no longer on the horizon. They have arrived.

Beacons are affordable and simple to implement. They are also easily

scalable.

Beacons are the new mobile, and are creating a new content platform on which brands and consumers can interact in a physical space.

Consumers are ready.

The winners of beacon technology will be the ones who host their

customers rather than sell to their customers.

written by

Daniel charnessDaviD martineZ

Zach pentel

edited by

Daniel charness

designed by

scott moDrZynsKi

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