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Beacon Technology: What Brands and Marketers Need to Know


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Beacon technology has the potential to disrupt the way brands–particularly retail brands–think about the intersection of the physical retail experience and the mobile experience. Using beacons wisely, retailers will be able to play the part of a gracious, individually attentive host, combining the users’ interests, intent and physical location.

Published in: Marketing, Technology

Beacon Technology: What Brands and Marketers Need to Know

  1. 1. b e acon tech nology JUNE / 2014 What brands and marketers need to know
  2. 2. Ever since Apple introduced its own trademarked “iBeacon” technology at their WWDC conference in 2013, marketers and retailers around the world have been unable to clear a persistent ringing from their ears. In most cases, though, they’ve had trouble defining exactly what that ringing is. So let us clear the air and state it as simply as possible: that ringing is the sound of a beacon-enabled future, one in which communication between brands and consumers is more direct, and more physical, than any technology has ever before allowed.
  3. 3. however, the technology is in its nascent stages. While beacons themselves are straightforward, the creative potential and limitations of beacon technology remain unclear. Most important, there has yet to be a well-defined standard for a beacon- triggered user experience.
  4. 4. The full potential of beacon technology will take experimentation time resources creativity It’s not going to be “plug and play.”
  5. 5. what are beacons? how do they work?
  6. 6. bea·con n. /| bēkən/ small, low-powered transmitters that communicate with smart devices in a predefined physical radius The “iBeacon” nomenclature confusion arose in 2013, when Apple took Bluetooth LE technology and packaged it into iOS7 and all of their newest devices. Then, using their standard “i-Naming” convention, Apple effectively branded their version of the technology as “iBeacon.” While it is true that many beacon manufacturers are indeed working with Apple’s trademarked iBeacon technology, it should be noted that any Bluetooth LE-enabled device, including devices running Android, can interact with beacons. Beacons tie physical location to content delivery, allowing brands to effectively trigger messages, promotional offers, or unique app experiences based on a user’s precise physical location.
  7. 7. Beacon technology was made possible and practical by the invention of Bluetooth LE, a low-cost, low-energy, proximity-based network that allows Bluetooth- enabled devices to interact with other devices without draining the battery of either.
  8. 8. GPS beacon technology stands in contrast to GPS – which is what most location– based services have used to this point – in that it uses proximity mapping rather than satellites or cell tower triangulation to identify a user’s position. This means that it can work effectively indoors, and if multiple beacons are employed at once, can pinpoint a user’s location down to centimeters.
  9. 9. NFC Beacon technology also contrasts with NFC in that it can connect devices from distances of more than a few inches and does not require the mobile device to have an NFC chip. To give some perspective: NFC chips have found their way into only a limited selection of phones, Apple’s not included, while Bluetooth is already incorporated into most.
  10. 10. BASIC Beacon INTERACTION A preprogrammed signal is emitted from one beacon – let’s call it Device A – and whenever a second, Bluetooth-LE enabled mobile device, Device B, comes within a predetermined vicinity–whether it be one foot, five feet or fifty feet–Device A triggers a notification on Device B. A B
  11. 11. The signals coming from Device A, and the action it triggers in Device B, can be preprogrammed through a content management platform and can be changed, tailored and altered at any time.
  12. 12. The proximity at which an interaction is triggered can be pre- programmed to various intervals ranging from a few centimeters to nearly 50 meters, and the connection, in its most basic form, does not require Wi-Fi or Internet access.
  13. 13. The beacon devices themselves are just small devices–cheap, around $30 to $60, and of varied size, depending on the manufacturer–that contain computer chips. These chips emit a constant Bluetooth LE signal, which can then be recognized by a Bluetooth LE-enabled mobile device. 30$ 60$
  14. 14. how does the mobile device hear the beacon?
  15. 15. In order for a user’s mobile device to receive the signal from a beacon: beacons may not be the California gold rush, but they present a golden opportunity for brands and marketers with an explorative mindset. 1 2 3 the user’s device must have an app listening for the beacon’s signal Bluetooth must be turned on the user must have granted the app permission to receive push notifications
  16. 16. why is beacon technology revolutionary?
  17. 17. People are already comfortable with the idea of a content strategy for social [media], and beacons will simply require a new content strategy for your physical space. Chad Rodriguez, sonic notify, beacon manufacturer
  18. 18. Beacon technology has the potential to fundamentally disrupt the way brands think about the intersection of physical retail experience and mobile experience.
  19. 19. To date, user-specific content strategy has been relegated to online environments like social networks, where the brand can either target individuals based on preference or use retargeting campaigns that use browsing behavior to dynamically create ad units. A proximity-triggered content strategy for beacon- enabled environments will, therefore, resemble the complex, highly segmented content strategies that brands and marketers have already learned to develop for social media. Beacon technology effectively adds a physical component to an already-existing targeted outreach strategy, allowing brands to reach a user based on their precise physical location, in addition to every other existing parameter.
  20. 20. Using beacons wisely, retailers will be able to play the part of a gracious, individually attentive host, combining the users’ interests, intent and physical location.
  21. 21. Retailers have become savvy at acquiring and cataloging an endless amount of data on their customers’ browsing patterns, areas of interest, and purchase intent. Applied thoughtfully, beacons will allow retailers to leverage this data in a physical environment, both to recognize customers as they enter a store, and to deliver custom-tailored content, offers, and experiences as they progress through the aisles. If a customer enters a physical space–retail or otherwise– and a thoughtful, beacon-triggered message welcomes them and anticipates their needs, it is likely that the customer will enjoy the experience.
  22. 22. how are beacons being used today?
  23. 23. s p o rts ar e na s R e tai l S pace ai r p o rts livi n g s pace s m u s e u m s e ve nt ar e a sr e stau r ants
  24. 24. s p o rts ar e nas
  25. 25. One of the most significant adopters of beacon technology has been Major League Baseball, which has implemented beacon technology in 2030of ballparks
  26. 26. it’s kind of a no-brainer. mobile and digital experiences are paramount to our fan experience. beacons open up a world of possibility.Bill Schlough Chief Information Officer san francisco giants
  27. 27. The MLB’s beacons communicate to fans through the MLB AtTheBallpark app, which, once installed, encourages fans to check in at entry points in order to unlock special offers.
  28. 28. e ve nt ar e as
  29. 29. At SXSW Interactive 2014, beacons were featured prominently, not only as a method of providing information, but also as a way of fostering a sense of community among festival attendees.
  30. 30. Users who downloaded the official SXSW app – powered by Eventbase – were treated to a smattering of beacon- enabled perks, depending on their location. For instance, those in the vicinity of the registration area, typically a dreaded waiting zone, were given access via beacons to a Registration Quickcode, thereby expediting the tedious process. Beacons were also used to bolster a sense of community and even initiate group conversations among attendees. If, for example, a user walked into a particular session, a beacon in the room would trigger an invitation to an in- app “chat room,” in which all of the users within range of the beacon could engage in conversation. Festival attendees and bloggers–often a tough crowd to sell on new technology–generally responded favorably to the use of beacons at SXSW, and some even suggested that Eventbase could have been more aggressive with its notifications. Some of the most clever usage of beacon technology has been through the creation of large-scale interactive events and exhibits. At CES 2014 in Las Vegas, for instance, beacons formed the backbone of an interactive scavenger hunt; and in May 2014, beacons were used to create a New York City Beacon-Crawl–a clever take on the popular pub crawl–in which beacons are scattered throughout bars and restaurants within the city, and participants are rewarded upon entry.
  31. 31. r e tail s pace
  32. 32. The greatest opportunity for beacons is within the retail space, as the technology unveils an ability greater than we’ve ever had to communicate with consumers entirely based on where they are located in a store. Surprisingly though, this is the area that has been the slowest to grasp for the technology.
  33. 33. Shortly after announcing iBeacon, Apple introduced them into all 254 of their U.S. brick-and-mortar stores, easily the most expansive implementation of the technology in the retail space. Upon entering an Apple store– with Bluetooth enabled and the Apple Store app installed–users are welcomed with links to EasyPay, support, and gift recommendations, all designed to make the shopping experience both easier and more interactive. However, outside sources have reported that the technology’s implementation has been far more sparse–and less creative–than one might expect from the company effectively pushing the technology. Additional retailers, such as Macy’s and American Eagle, have also introducedbeaconsintotheirstores,but,again, their efforts have largely been on a trial basis and have not made extensive creative use of the technology.
  34. 34. what comes next? how can marketers push forward?
  36. 36. Many brands are concerned that consumers will, for fear of battery loss, disable Bluetooth on their devices. And without Bluetooth enabled, a brand’s app can’t listen for beacons.
  37. 37. However, it is likely that Bluetooth deactivation will become irrelevant: 1 2 3 as consumers learn to disassociate its activation with decreased battery life, as Apple’s vested interest in being a beacon leader matures. as Apple – and perhaps Google as well – makes it far more difficult for users to disable Bluetooth, perhaps burying the toggle deeper into the general settings of the phone, or actively encouraging users to leave it enabled.
  38. 38. a user-first approach to push notifications
  39. 39. Brands also worry that customers will be put off, rather than pleased, by an increase in mobile notifications. The fear of burdening consumers with a tidal wave of unwanted notifications is a genuine concern, and marketers will undoubtedly have to rely on common sense when designing their beacon environments. Recent research indicates, though, that as long as notifications are kept relevant, consumer friendly, and creative, they will be well received by consumers.
  40. 40. 72% of consumers say that a relevant mobile offer pushed to their smart device would significantly influence their decision to make a purchase 67% of consumers have received a push notification to their smart device over the past six months 79% made at least one purchase as a result The mobile marketing platform Swirl conducted a beacon study based on what we already know about consumer behavior in a retail environment. Their findings confirm that many consumers are open to notifications, as brands can provide offers and perks that are relevant to them and add value to their time in the store. A few highlights from their study: 81% read or opened them most of the time
  41. 41. 85% of consumers realize that online retailers track their shopping behavior, but accept that their doing so will result in relevant offers/promotions for the consumer 75% of consumers prefer that retailers use personal information, so long as it improves the shopping experience. Asimilar study from Monetate–which focused on online retail but studied the same general behaviors–went even further to show that consumers are generally open to having retailers interact with them, so long as such interactions play a positive or helpful role in their shopping experience. As that study shows:
  43. 43. After all is said and done, a Beacon interaction requires a companion app on the user’s device. This has been the most feared component of beacon technology for large brands who, in order to benefit from the technology, must first have a considerable audience of users on their app. Generally speaking, we know that branded apps from retailers tend to see low usage, particularly in-store. While they are often an excellent resource for engaging customers at home (whether for browsing, gathering product information, or compiling a wish list) retail- focused apps have generally not shown their value in an in-store context. This is where beacons have the greatest potential, and could not only change customers’ shopping experiences, but could also lead to a more positive and sustained engagement with a brand’s app. In a beacon-enabled environment, a store’s app becomes the anchor for an experience unlike any a customer has experienced in a brick-and-mortar store. Assistance can arrive sooner, offers can present themselves at only the most opportune and relevant moments, and the checkout process itself can be completely streamlined. So to flip the argument on the app-doubters: if none of this would be possible without the app, won’t customers want to download the app just so that they can experience it?
  45. 45. Beacons are no longer on the horizon. They have arrived. Beacons are affordable and simple to implement. They are also easily scalable. Beacons are the new mobile, and are creating a new content platform on which brands and consumers can interact in a physical space. Consumers are ready. The winners of beacon technology will be the ones who host their customers rather than sell to their customers.