iBeacon: The Big Mobile Breakthrough for Retail?

iStock_000017636754XSmall-150x150.jpgHave you noticed the sudden flurry? No, not snow…I’m talking about articles on iBeacon. There is a new feature on the recently released iOS7 operating system that enables micro-location based communication. The messaging you receive on your phone is triggered by your location in a way that is reported to be more targeted and workable than we’ve seen to date.

A lot of commentary about iBeacon has focused on its potential to transform retail experience because, frankly, that is where its use is most visible right now. Apple is reported to have turned on iBeacon in all of its stores and Macy’s is testing it through the Shopkick application in two stores. Retailers whose mobile strategies have matured to the point of offering targeted in-store engagement have a potentially exciting new tool.

The micro-location based mobile communication that iBeacon enables offers the promise of highly relevant mobile messaging not just in retail, but also in entertainment venues, museums, transportation sectors and beyond. iBeacon is technology that works with iPhones, iPads and iPod touches with iOS7. Beacons use Bluetooth Low Energy to constantly transmit finely targeted location-based messages that iOS devices (usually phones) running the right application can intercept.

From an in-store merchandising perspective, iBeacon has the potential to increase ROI and make even non-interactive displays “smarter.” A beacon could be built into a display or interactive piece that intercepts shoppers in close proximity to the unit or upon entering a store or department. It could send a prompt to engage, a purchase incentive, or information.  This solution helps address the “if you build it, will they come?” question that often arises with ambitious retail merchandising implementations.

 iBeacon seems  to overcome some of the hurdles of cost or range or reception that are present with other location-based solutions we’ve evaluated. GPS doesn’t work well indoors and can’t pinpoint locations that are just a few feet apart. iBeacon doesn’t require the extremely close proximity or tapping of devices that NFC does.  Beacons are reported to work as close as 4 inches to between 150 and 200 feet (reports vary on maximum distance). Beacons are low cost – in the range of $5 to $30, depending on the supplier.

Assuming all the technological pieces fit together reliably; there are a number of things that have to go right for iBeacon to deliver. We initially wondered about the critical mass of iOS7 devices, but Apple’s developer website reports 74% iOS7 adoption based on app store usage numbers.

The future of iBeacon as a retail breakthrough also depends in part on how receptive shoppers are to receiving notifications from a retailer while they’re in store.  This is usually something users agree to upon initial download. A study conducted by ResearchNow for Swirl Network, an in-store mobile marketing company, found that 77 percent of the 1,000 consumers surveyed would be willing to share their location data in exchange for something of value.  We’ve seen other reports in the past that about half of consumers are willing to share location.

When programming messaging retailers will have to find the line between welcomed and irritating. It is critical to get message and frequency right. As an article appearing on Wired.com bluntly put it, “businesses will have to be careful not to inundate us with crap, lest they kill the future of retail before it arrives.”  

There is always a lot of excitement surrounding the next new thing, and it is sometimes difficult to filter out the noise.  We’ll want to stay attuned to see if iBeacon turns out to be the most exciting interactive breakthrough of 2014. Are we finally creating the opportunity for true “one to one marketing”, for the engaged and connected consumer? What do you think?  

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