How Will iBeacon Bridge the Gap Between Retail & eCommerce?

At Apple’s 2013 World Wide Developer’s Conference, Apple was sparse on details surrounding the iBeacon feature in iOS 7. The only mention of  “iBeacon” was its name, displayed with no emphasis on a single Keynote slide, scattered amongst the many other features the new OS had to offer. We’ve now discovered that Apple’s iBeacon API utilizes a Bluetooth LE (Low Energy) profile for the communication of micro-location information to nearby apps and devices. It has an accuracy range of a 10 – 50 metres enabling a series of new hyper-local communication capabilities for retailers and app developers.

What Is iBeacon

The beacon hardware that will take advantage of this new API, is a small wireless sensor placed inside any physical space that transmits data to your iPhone using the device’s Bluetooth LE connectivity. With Bluetooth LE, iBeacon technology opens up a new dimension of device communication by creating regions that connect to a customer’s app so they can be alerted when entering a specific physical location. Companies such as Estimote are already developing these beacons in anticipation of offering the ability to connect retailers and customers directly to their eCommerce environment while shopping at a physical store location.

Why Bluetooth LE?

As the name implies, Bluetooth Low Energy (BLE) is designed specifically to utilize only small amounts of energy which in turn allow device batteries using this technology to last much longer than the previous Bluetooth technology.

It’s not NFC: iBeacon is poised to overtake NFC because of the price and range of physical iBeacons. NFC tags are not very expensive compared to the beacons currently on the market, but NFC tags are required for each product because NFC works at a very close range, where as iBeacons range is up to 50 meters. Mobile devices need to contain an NFC chip that can handle any NFC communications. Currently Apple’s devices do not support NFC technology and there is no indication that it will be supported any time soon as nearly all new mobile devices utilize the new Bluetooth LE technology.

It’s not GPS: The GPS signals inside physical retail locations are typically weak or non-existent since GPS signals travel by line of sight and will not pass through most solid objects such as most retail buildings. This is the biggest issue surrounding indoor connectivity/communication with a customer’s smart device. Google has tried to address this through in-store maps, but due to the line of sight issue with GPS Google’s success with indoor navigation was limited. This is where Apple’s iBeacon’s micro-location feature is going to stand-out. Through Apple’s iBeacon API and Beacon hardware, Bluetooth LE offers the ability to offer hyper-local marketing that can target customers directly throughout their shopping experience.

How Will iBeacon Bridge the Gap Between Retail & eCommerce?

Exact Location Targeted:
Beacons are very small and require only a small amount of power to run. This allows retailers to strategically place the devices around their retail space. Since each beacon is communicating directly to a customer’s mobile device, it is easier to alert customers with custom offers and sales while creating opportunities for both online and in-store purchases.

Information During Shopping:
The proximity-based beacons provide retailers an opportunity to direct customers to the relevant section in the store. They are also capable of offering both product details and department or category promotions. By accessing an online customer accounts, customers will be able to browse through their device, a personalized shopping mode, in which your wish list and recommendations follow you around. This allows customers to quickly make decisions and help as they browse for the items they want most or that come highly recommended by other customers.

Loyalty Incentives:
Through iBeacon, retailers will be able to offer loyalty programs that extend beyond a customer’s typical loyalty/incentive profile. With the ability to personalize iBeacon messages, customer’s that qualify for rewards offered through their loyalty program can be instantly alerted to these discounts and promotions that are available to them as they enter a retail store. Where as in-store purchases can instantly alert a customer to specific loyalty benefits designed to drive traffic to a retailer’s eCommerce environment.

Update: With Apple’s iOS 7.1 update, Apple has added a game-changing improvement to their iBeacon API. Once an app is installed on an iOS device the app will actively search for beacons even if your app is shut down or you’ve restarted your phone.