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The iBeacon is set to change the way we shop

By Owen Williams / December 9, 2013


iBeacons

iBeacons were one of the largest innovations unveiled at Apple’s World Wide Developer Conference (WWDC) in 2013, yet the devices didn’t receive much more than a tiny mention on a slide that contained hundreds of other new iPhone features. Despite only being given a small nod of acknowledgement, the iBeacon is a new technology that is set to drastically change the retail landscape.

If you’re not familiar with the technology yet, you’re not alone. Apple calls iBeacons “a new class of low-powered, low-cost transmitters that can notify nearby iOS 7 devices of their presence,” but they’re much more than that. iBeacons are based on Bluetooth Low Energy (BLE) technology, making them compatible with any Apple or Android device with BLE capabilities. This opens up a new realm of opportunities for app developers of all operating systems to utilize the technology in the physical world.

What sets iBeacons apart from previous Bluetooth offerings and Geofencing is the precise, proximity-based information they are capable of offering. Most iBeacons have a range of up to 50 meters, making them perfect for things like indoor mapping and tracking. Whether you’re a retailer looking for new customers or a customer looking for new clothes, iBeacons could be just what your shopping experience has been missing.

Changing the way retailers interact with consumers

Many retailers have already seen the opportunities presented by iBeacons. Imagine a customer walks into your store and starts perusing the aisles, eventually heading towards the exit without any purchases. Using an iBeacon, you could take this opportunity to provide a push notification to the customer’s phone with an offer that could make them turn around and take another look at the shelves.

Macy’s is currently running a closed trial with Shopkick, the maker of shopBeacons, in their Herald Square, New York and Union Square, San Francisco locations. Stores that have the devices will ping offers to customers in their stores as they walk by products that have coupons or deals to offer. The company has been extremely happy with the results of the trial and is also looking to blur the lines of online and offline retail by allowing consumers to favorite products from home and be notified about them later on when near them in the store.

Squashing NFC

When the news of iBeacon broke, Gigaom titled it an NFC “killer” as it essentially nullified many of the perceived benefits that NFC would have brought to iOS. Gigaom pointed out that in the Macy’s scenario, iBeacons would cost around $5,000 to cover a store, whereas an equivalent roll-out of NFC stickers would cost up to $100,000.

iBeacons are also likely to be used to track customer behavior and how they react to certain store configurations or sales. Many companies are already tracking customers through their phone’s Wi-Fi connection as they visit individual stores, but the technology doesn’t allow for precise tracking over small distances. With the precision of iBeacons, it’ll be possible to deeply analyze how even small changes to a store’s layout impacts customer behavior.

Changing the payment landscape

The next logical step in the retail store is revolutionizing the point of sale. NFC was a promising early candidate for updating the in-store payment process, but has since struggled to overcome issues with battery drain and hardware compatibility, both on the phone and the point of sale device required to complete the transaction.

With iBeacons, all you need is a phone that supports BLE. From there, iBeacons have the ability to precisely determine the location of a phone, making it possible to determine who is in front of the cash register and initiate a transaction with them.

One company, Proxima, has already taken advantage of this. They allow customers to install an app on their phones and use a virtual wallet to purchase goods with no friction, which would be very similar to the way customers are able to purchase some items in Apple stores today. It’s simple and easy enough for everyone to use, while stopping customers from having to rub their phone against a point of sale terminal, like they currently do with NFC transactions.

With a combination of Apple technologies, payments could be taken even further in the future. In the iPhone 5s, Apple has an extremely secure authentication method called TouchID, which allows users to use their fingerprint to log in to their phones and make iOS-based purchases. This technology could be combined with future iBeacons to allow secure proximity-based payments, where users confirm transactions initiated by the cashier with their fingerprint. Identity doesn’t get much more secure than that.

Delighting customers in new ways

Simple iBeacon integration could also help retailers demonstrate products for customers like never before. Imagine a scenario in which an iBeacon is integrated in a new TV that’s being shown off in Best Buy. When the customer walks up to the TV, a prompt could appear telling them that it’s possible to wirelessly connect to the television and stream audio/music. If the customer clicks the notification, it could stream a song or music video from their personal iTunes account. Making the demo experience easier for the consumer could significantly help sell devices without store staff needing to provide assistance.

Other organizations, such as museums, zoos and sports venues, could also benefit from the iBeacon by helping provide a richer experience for their visitors. Proxima is also working on another product that would allow museums and other venues to show visitors information while standing in front of exhibitions.

Giving visitors enhanced information about exhibits on their smartphone allows the museum to offer a richer and more engaging experience without needing to resort to NFC stickers or QR codes, which can be frustrating and confusing. The application could also provide directions along a trail inside a venue and offer a rich audio visual experience without needing to use anything more than the phone.

Making experiences fun, engaging and much more easy for the users could drive a revival in the amount of people who come through the doors of traditional stores and other venues. Organizations that take advantage of iBeacons now are going to be ahead of the crowd, especially if they are willing to consider new and innovative ways to use the technology, since most consumers are unlikely to have experienced it before. Over time, iBeacons will be everywhere, but it remains to be seen just how far the technology can be pushed.

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