Why Beacons?

Marketers and Technologists the world over are falling head over heels for Beacons. But why?

Beacons (or iBeacons, as most will refer to them) were coined in mid-2013 at Apple’s WWDC. Apple stayed fairly humble about them, didn’t make a huge announcement and left them within the SDK for developers to play with. Savvy companies such as Estimote, who were already vying in the space of sensor-based analytics and engagement, saw a viable opportunity to augment their products and almost instantly went to the drawing board with making these BLE (bluetooth low energy) devices. However the uptake has been slow and, in most cases, focused on the retail space.

As with any technology, the uptake is most important to its success and in this instance diversification of use cases has been relatively limited. Beacons have so much in the way of opportunity within proximity marketing but we’re yet to see the benefits of this right now. We know that bluetooth has been doing much of what we’ve been experimenting with for years (for example, organisations taking advantage of bluejacking when in proximity of a bluetooth enabled user). We also know that whilst some people would see this as a small part of Apple’s wider retail strategy (with integration in to the Apple Store App and Apple events, for example), some are consistently talking about Beacons as being the opportunity of a lifetime for businesses great and small. But where are they?

Retail Saturation

Don’t get me wrong — retail is one of the most exciting development spaces in both Mobile and Technology today. Competitors are rapidly trying to push past each other in order to increase market share and customer loyalty without being too brash and undergoing extensive changes. For example, both Waitrose and Tesco here in the UK have both recently started trials in stores as a part of a wider application strategy whilst Regents Street (operated by The Crown Estate) is in the process of getting it’s retailers Beacon-ready in order to influence shopper behaviour based on interests by using technology provided by American based technology company, Autograph.

The risk of over-saturating the retail market with these devices, which the end-user is quite unaware of for the majority of the time, is that we can alienate these customers. We can take the data they provide us with, apply some thinking to it, and target them with offers detailed to them. That’s great, right? In moderation of course it is. The risk truly lies in the opportunity for retailers to effectively spam the end-user. Apple quietly updated the iBeacons specifications back in March 2014 that allowed Beacons to interact with applications while they were closed — meaning that you’d get a lovely buzz in your pocket every time something was relevant to you. If you were in fact anything like me (and most people for that matter) you’d express your interests in the High Street as quite broad as to take advantage of as many offers as possible — after all, it’s not a crime to try and be that little bit more thrifty.

It’s a new way to do some things that are old news

What we’re seeing a lot of people touting around is “proximity marketing”. My handy Wikipedia search tells me that this refers to “localised wireless distribution of advertising content associated with a particular place.” Great. However this is hardly re-inventing the wheel. We’ve been doing smarter media buying and planning for a very long time, and with the likes of telecoms companies assisting some of this activity through geolocation services and the ongoing development with 3G and 4G, we can accurately pinpoint where a user is in relation to a physical outlet and notify them of this. Starbucks actually did this in 2012, when they allowed people to select a favourite store and add to passbook.

As well as this, the automation that many people believe Beacons brings actually still requires the permission of the user. Yes, we can automatically detect that a user is within a store or geofence and ping them a notification based on this — but it still requires them to actively use this notification. Or they could hide it, which is also highly possible.

Some people may argue that it can accurately identify where someone is within a proximity, and that is true. However what benefit does that truly have to the user? Sure, tell them that they are next to a pair of jeans that fit you — but the big challenge we’re seeing here is actually an issue with the handsets and telecoms providers themselves; signal. This is because, due to the nature of how Beacons communicate with a device, you still require an internet connection to access that data (if data is constantly changing, and this is highly likely).

Beacons play the role of a middle man

Aptly that brings me on to this point. Beacons are simply a tool to communicate between one device and another. Thus, within retail for example, we can allow your handset to communicate with an EPOS system. However, if we look further adrift, there is potential for so much more here.

The nice thing about Beacons in some cases here is that it can help make things frictionless — payments, through a trusted platform such as PayPal, instantly become much easier and simpler. However in the newer applications that will be developed along the way, there is still this risk of security and end-user adoption will struggle until we can adequately educate these people to understand that no information is truly carried through Beacons (and thus, eliminating security risks and worries).

Mass Education

Due to nobody really owning the Beacons space, which is where retailers will truly shine, people are still unaware of what these tools are and how they benefit them from a day to day point of view.

For retailers the benefits are relatively endless; you accrue so much data. More than you know what to do with. You can then start using this data to your benefit to build a single customer view — something many organisations are now trying to do.

However in a world that is dominated by security leaks, credit card number theft, identity theft (and I’ve no doubt’s we’ll soon see a Face/Off style identity theft too — science and medicine is going just a tad bit crazy) and much more, people are more aware of privacy policies and will check how data is being used. It is up to data managers to ensure that these people are educated and that they understand the benefits to them. If you’re making a tool that has no benefit to the end user, then you should probably just not bother.

A great example of education is the introduction of QR code readers to phones in 2002 in Japan, and subsequently wider Asia. It led to people widely using QR codes very quickly, and mass adoption from handset providers helped accelerate this usage and become a staple within Asian culture — a clear indication of them leading and driving technology forwards.

Where’s the real opportunity?

A few opportunities are really starting to pop-up, and they’re very exciting.

One particularly strong opportunity is for anyone with a large space. Estimote, as part of the core offering, allow you to heat map floor space usage. Whilst you wouldn’t get a user to install an app just to do this, this information can really assist you in future decisions. Now Estimote are even toying with temperature sensors — so on a hot day like today in London, when I walk past my local Tesco, my application will tell me that I can have 20pence off of a Calippo if I purchase now. Sold.

Mobility is another great opportunity. Pop-up shops and restaurants seem to be all the rage at the moment, particularly in London (I won’t name drop anyone), and companies such as PayPal are now building integrated solutions that allow people to easily and effectively accept mobile beacon PayPal payments.

We’re seeing a slow change of use

To not be overly negative we are seeing a slow increase in the use of Beacons across other verticals. Estimote for example recently partnered with Knoll to bring iBeacons in to office space planning by allowing customers to install beacons in the office, understand how the floor space is being used, and ultimately make the space more efficient for employees.

It also shouldn’t be forgotten about the incredible use of the close proximity of beacons with the New York Museum, that was designed to raise awareness by simulating minefields. Sweeper, the app to support this United Nations initiative, allows anybody to experience the fear of living in a minefield with this application.

They’re here to stay, but adoption will slow down

It’s a given really. They are Apple backed and, as such, developers and companies alike will rapidly adopt anything backed by the software and hardware giant. That’s not to say that it is a poor technology release — while most of this may seem somewhat negative, it’s a good opportunity for people to understand that Beacons are not always a viable route when other technologies (tried and tested) are already out there for the world to use and the education isn’t required.

I am genuinely excited to see the varying use cases that Beacons will bring, including the recent MLB POC now scaling to become a fully fledged product for the fans, however adoption outside of retail really needs to speed up — and this is ultimately fuelled by the ambition of developers, companies, entrepreneurs and start-ups alike to be made to think outside of the box by themselves, clients and the landscape around them.