How iBeacons Could Revolutionize Retail

November 2013

In the modern world of mobile and retail design, knowing the exact location of a customer provides highly valuable and actionable information for a retailer. Smartphones can enable location-based targeting, but until recently location-based service offerings have been limited to a phone’s GPS signal, which could only approximate a consumer’s location in a store. Now, with improved technology, it’s a far more exciting time for location-based targeting. Consumers are becoming more aware of location-based services and experiences, with words like “geo fencing” and “contextually aware” creeping into their everyday vernacular. At the same time, improved technology known as beacons promise a much finer degree of precision in tracking a customer’s location. Beacon technology has the potential to revolutionize commerce as it offers the ability to bridge the gap between digital and physical experiences.

How iBeacons Work

With the launch of iOS7, Apple introduced its software and hardware solution, iBeacons. iBeacons use Bluetooth Low Energy, which is part of the Bluetooth 4.0 specification. Bluetooth 4.0 has been supported in every iPhone since the iPhone 4 and is also supported in Android 4.3 and up.

iBeacons are equal parts software and hardware. A physical beacon sits in an environment such as a store or stadium and broadcasts a unique ID. Operating on a watch battery, this physical beacon can broadcast its ID for up to two years. A consumer’s phone will receive the beacon’s ID through Bluetooth. Core Services, an iOS API, allows apps on a consumer’s phone to listen for the beacon ID. Once it has been intercepted and sent to the correct app, core services can trigger notifications or content. It’s important to note that Core Services is currently proprietary to iOS. Since a beacon’s only function is to broadcast a unique ID, it would be easy for Google to update Android to interpret beacon signals. PayPal, for example, has already released a beacon payment system called PayPal Beacon that uses proprietary code and works on both iOS and Android.

Using iBeacons

iBeacons allow for range sensing and proximity-based messaging. They can determine if a customer is far, near, or immediate. Imagine a scenario where a customer is alerted to the fact that the jeans in her online wish list are available and on sale in a nearby store (far). As the customer walks into the store, a map shows her where those jeans are (near). When approaching the jeans, the customer is presented with product details (immediate). Some other potential applications for iBeacons include customer recognition, mobile payments, triggered passbook coupons, and the ability to transfer one’s phone settings to a device for faster setup.

Design Considerations

iBeacons have the potential to become the new location-based spam. A successful implementation can offer consumers something beyond coupons when they enter a store, provided retailers heed design considerations like the following:

  • Think about zones intelligently.  Retailers should draw maps of their environments and highlight what content they want to show in which zone: far, near, immediate. They should trace the flow of their customers through the environment, and make sure they can create a holistic experience.
  • Prototype early. Designers may not have access to the physical environments they’re designing for, and given the newness of the technology, it may be hard to get their hands on an actual beacon. Various vendors are offering app emulators so designers can get their hands dirty. (Here’s one from Estimote.)
  • Set up fake stores and get a sense of the space. It’s one thing to design on screen but far more fruitful to test the context.
  • Integrate the systems already in place. For example, it’s theoretically possible that an iBeacon-enabled app could interface with a customer profile tied to a loyalty program. Higher-value customers could receive different content.

iBeacons have the potential to provide a way for retailers to personally connect with every shopper in store, and transform nearly every aspect of the shopping experience. Smart design will be crucial in delivering a best in class experience.

For more information on iBeacons, see the presentation below:

Author: Phil Robinson, Associate Creative Director, Mobile & Social Platforms, R/GA NY