Is 2014 the year of iBeacons?

iBeacons have the potential to change our shopping experience forever, argues Martin Shellaker
smartphones - ibeacons article
iBeacons, using Bluetooth 4.0 technology, are set to unlock the power of smartphones for retail outlets. Photograph: Kim Hong-Ji/REUTERS

I love networking, and whilst others shun it I actively embrace it. Who is out there that I can learn from? Who can open my mind to new opportunities - new ways for me to help my clients and my colleagues help theirs?

For example, last year at an awards dinner I found myself sat next to Ian Malone, managing director of app development company, We Are Apps. And given that We Are Apps are currently developing solutions for deploying iBeacons in retail and other locations, the conversation soon turned to iBeacons' potential for helping retailers and brands engage shoppers with highly relevant content on the path-to-purchase, whilst shopping - fantastic!

So what are iBeacons, how do they work and why should everyone be getting excited about them?

iBeacons are small and relatively low cost, Bluetooth low energy (BLE) devices that can literally be placed anywhere because they have a self-contained power source that means they can run for up to two years.

They use Bluetooth 4.0 - a new format of Bluetooth that has been built into many modern smartphones including all iPhones from Apple 4S upwards and Android devices like Samsung Galaxy S III. What's more, Bluetooth 4.0 does not require devices to be paired.

The easiest way to understand how they work is to think of them in terms of a traditional beacon i.e. something that sends a signal to all those around identifying its location. As such, iBeacons only transmit small packets of information, from distances of between two inches to more than 50 metres depending on the environment.

When a smartphone comes into range, the beacon's signal triggers content from either a local database or cloud-based storage. The smartphone user will see a notification on their home screen saying a discount, reward incentive or contextual suggestion is near by - even if the phone is locked.

So why is this so exciting? As we all know, GPS, besides eating into your battery power when turned on, is quite a blunt instrument - it certainly could not be used to pinpoint you exact location inside a store. However, iBeacons can now give retailers or brands the opportunity to communicate directly with shoppers not only at a store level but in an aisle or even at a fixture.

How does this differ from Near Field Communication (NFC)? NFC shoppers actually have to tap their smartphone onto an NFC chip in order to be receive content. Therefore, whilst the communication opportunity that exists with NFC is still rich, the potential applications are not as broad. What's more NFC only works with Android smartphones - Apple has so far decided not to implement the technology in iPhones.

The potential applications for iBeacons are endless but this is so new that it was only on January 6, 2014, that a US-based app developer launched the first multi-retailer rollout of Beacons, to 150+ grocery stores in Seattle, San Francisco and Cleveland. This allows customers to receive location-specific information, such as a highly targeted and relevant coupon for a product based on the fixture they are heading towards.

Apple itself began using iBeacons in a limited capacity at all 254 of its US retail stores in December 2013. Using the official Apple Store application for iPhone, users can shop for new items, check iPhone upgrade eligibility, or pick up an order they've already placed.

Of course, application of iBeacons is not limited to retail stores. They have endless possibilities and I am sure many agencies are, just like us, working hard to identify just how they can be used to help all their clients communicate with shoppers in real-time on their path to purchase.

iBeacons have the potential to change our shopping experience forever. So watch this space - 2014 promises to be the year of the iBeacon.

By Martin Shellaker, director at SMP.

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