Bridging the Gap
Next Generation Opportunities Arising from Proximity Connectivity & Progressive Web Apps
How customers get empowered and companies can take advantage of recent developments in the physical web.
Within the past three decades we have witnessed an unprecedented surge in the digital world. This development has come along with great individual and economic advantages that cover the ubiquity and accessibility of information, improved communication capabilities and great convenience. A myriad of extremely valuable services ranging from free encyclopedias to real-time quotes, price comparisons and booking services are now at our finger-tips. We are finally able to build and maintain relationships independent of time and space. These great advantages are reflected in the amount of time we spend online, which has doubled in the past ten years and adds up to over 20 hours per week. There is little doubt that this trend is not coming to an end soon.
On the other hand though, we as human beings live in a physical setting. We breathe, sleep, eat and move in an offline world. We love the inimitable natural experience of sensing our environment. Seeing the bright colors of leaves in the autumn, hearing the chatter of a crowded restaurant, smelling a well-known perfume or touching the texture of our favorite wool jersey is what we genuinely love because it evokes strong and positive emotions. Ultimately, the major share of our time is still spent offline.
This poses a major question: If both worlds come with such overwhelming benefits, how can we blend them to take advantage of them both?
Since the rise of the smartphone various endeavors have been undertaken to bridge the gap between the physical and the digital world, most of them within the format of mobile apps. But there are three reasons why most of them have failed to deliver the natural experience people expected:
1. People are hesitant to download a dedicated app for each and every single use case;
2. The smartphone is usually blind and unaware of its context (e.g., whether the user is in a restaurant or in front of a vending machine);
3. The UX to date is fairly poor and involves multiple steps. These include drawing the user’s attention to the usefulness of the app in a particular situation, downloading the app, registration/sign up, and finally using it. According to Google research, 25% of users simply installed the app and never actually used it. A further 26% installed the app, but only used it once. This shows the hesitance of users to pass through various stages of the funnel.
But this might change quite soon.
Due to recent technological developments, these barriers of usage are about to dissolve. Proximity sensing, or what is referred to as the physical web, comes with a big promise: Augmenting real world settings through digital information and services respectively delivering context to these digital services. Combined with the deliberation of apps from the smartphone, the user experience can be truly seamless and natural.
This advancement has been fueled by the confluence of recent technological developments:
1. Hardware layer
As more participants are entering the beacon market and sales volume is on the rise, the price and quality of the devices will increase dramatically.
2. Connectivity layer
In June 2016 the SIG announced the new Bluetooth 5.0 specification in a press release. This new standard will double the speed, quadruple the range and increase data broadcasting capacity by 800%, while maintaining low energy consumption and supporting mesh networking. This makes it a very strong candidate for the future standard of the Internet of Things
3. Software layer
During the 2016 I/O developer conference, Google unveiled and followed up on a whole streak of innovations contributing to proximity aware technologies — the Nearby API (an Android feature which enables contextual discovery), Progressive Web Apps (a new set of capabilities to build app-like mobile websites that work reliably on the worst network connections and can send notifications to re-engage users) and Android Instant Apps (which can be streamed to the smartphone without the need for installation).
In light of these recent innovations, we are at the edge of a technological breakthrough in the field of IoT/the physical web and many industries may experience major disruption. Soon, it will be possible for people to interact with their surroundings in a seamless and convenient way by embracing all the advantages of the digital world. Vice versa, it will be possible for organizations to engage with people throughout the frontier of offline and online, and therefore create an entirely new customer experience. This facilitates a whole new range of use cases in a variety of domains. Several exemplary applications are introduced hereafter:
Smart Cities & Public Transportation
- Public Transportation, e.g. automated purchasing of tickets and real-time route information (the city of London already experiments with beacons providing information with regard to the bus network);
- Public Indoor Navigation, e.g. finding the fastest route to the room with a specific physician at a hospital;
- Dynamic Emergency Plans, e.g. providing individualized exit routes to prevent congestions and mass panic.
- Maintenance, e.g. displaying digital information such as an interactive repair manual or last maintenance date about an object to a service technician;
- Augmented Warehousing, e.g. displaying the type and amount of screws stored within a certain box;
- Tracking and Tracing of items, e.g. within a factory in order to detect bottleneck and optimize the process flow.
Other areas of application include offices and working spaces, e.g. automated time tracking and workforce analytics which yields increased labor productivity or insurances, e.g. micro and on-demand insurances at certain places such as an airport.
Despite the fact, that the opportunities are nearly endless and most industries are affected to a certain extent, the most value could be unleashed in retail environments. Stationary retail faces huge challenges including an increasing pressure of pure online players, declining sales figures, and rising expectations and changed behavior of customers.
The physical web could be the missing piece in the puzzle enabling an omni-channel strategy to meet the demands of the hybrid customer, who switches online and offline channels multiple times during his purchasing process. It provides retailers with a tool to enhance the user’s experience and enable entirely new customer journeys, thus preventing the customer from trying a product but finally churning to an online competitor in order to purchase it. Moreover, it eventually provides brick-and-mortar retailers with the online capabilities which were an essential part of Amazon’s success. Features like content rich product information (such as videos), purchasing history and suggestions, reviews, home delivery, analytics and performance marketing and many more are now available directly the point of sale. Imagine one of these new immersive journeys as follows:
The customer, 17 year old Jane, enters a fashion store in a mall on a crowded Saturday. She stops in front of a blue French blouse that appeals to her. She loves the texture of the fabric when she gently touches the garment. She sees the proximity symbol, picks up her smartphone to discover nearby items and sees that exact blouse being displayed. She follows the URL and unveils a number of possible options within the web app of the fashion store. She sees
- basic information such as the availability of sizes and colors in that particular store;
- that 7 of her friends have liked that blouse on Facebook, the 4.3-star review of other customers and her idol Selena Gomez wearing that blouse at the MTV video music awards;
- an interactive style guide and a skirt which would fit perfectly to the blouse;
- the option to purchase the blouse directly via the smartphone and either carry or deliver it home.
Jane is almost convinced to buy, but then stumbles upon the price. $44.95 is definitely too much since she has seen a similar blouse on Amazon for $38. She is about to leave the store as she gets retargeted through a push notification that her blouse is on sale today. $32, if she purchases online right now. She is in. Just a few clicks and her blue blouse leaves the central warehouse of the store.
This anecdote illustrates the key advantages of physical web technologies in a retail environment. Especially the customer-tailored and individualized experience and convenience aspect of switching frictionless between channels could be a mean of retailers to face the competition with pure online players. This has three potential impacts:
1. Increase of sales through individualized suggestions, exploitation of cross-selling potential and recapturing of lost revenue to online competitors;
2. Increase of brand value as perceivable value-add enhances the customer’s experience and loyalty;
3. Increase of profitability through optimized capital efficiency (flagship stores), a higher marketing ROI and exploitation of individual price points.
This is an exciting development for the retail and consumer goods industry and peripheral players who enable such augmented customer journeys shaping the future of stationary retail. This is especially true for the huge technology players, like Facebook and Google. These companies have a genuine interest in capturing the offline market, but as the ecosystem is still very immature, no dominant player has yet emerged. The race has just begun.
Benjamin Sekowski is Co-Founder of Proximity.ai. We blur the line between the physical and digital world using progressive proximity web technologies. Through providing contextual information and services we augment user experiences and enhance people’s lives.