iBeacons: the saviour of high street retail?

iBeacons: the saviour of high street retail?

iBeacons are not a physical product but instead a software extension to Bluetooth Low Energy (BLE). In the past, Bluetooth has been used to connect mobile phones to things like headsets and car audio systems, with a reputation for hitting battery life hard. BLE is the next generation of Bluetooth that uses a tiny amount of power and can be turned on all the time with negligible effect on battery performance. That said, before users will turn it on and leave it on they will need a reason to.

Apple has given retailers and developers a tool – they must now use that tool to create compelling products and experiences. In other words, it’s up to retailers and developers to make of this what they will, to create their own experiences.

Just like augmented reality, retailers and developers need to look at iBeacons and BLE in the context of their wider businesses and look at the problems they can solve or the improvements that can be made with them. Using them for their own sake will ultimately result in poorly adopted products and disillusioned customers.

Even though iBeacons has been pioneered by Apple, the extension can be easily adopted by third-parties, so in the near future we will see Android apps that support iBeacons and dedicated hardware hitting the market.

That said, iBeacons on their own are not particularly interesting. They act a lot like GPS and allow a smartphone to identify a specific location but nothing more. BLE is much more interesting as it allows for secure two-way communication between devices in relatively close proximity of each other, normally up to around 20m (although the official range is higher).

By installing devices that act as iBeacons in their stores and updating their apps to support them, a new kind of marketing channel opens up. For example, if a customer has been browsing a specific product in the mobile app without purchasing, but then enters a physical store, the app will identify the iBeacon in the store and a very targeted offer can be sent to the customer’s phone to encourage them to purchase that item during their visit.

With BLE it’s possible to go even further than creating a new marketing channel. Because secure communication is possible, without a smartphone having an active data or WiFi connection, a new kind of mobile payment solution is possible that works in even the most hostile, lead-lined, Oxford Street basement.

PayPal has announced its own, confusingly named, “Beacon” product that aims to do just this.

The Hudl tablet that Tesco is launching today will support BLE (identified as Bluetooth 4.0 in the specifications). Although no mention of it has been made, Tesco is perfectly placed as a retailer to use BLE and create the most comprehensive omni-channel experience across Tesco stores, Tesco.com, Tesco Bank, Tesco Mobile and even the recently acquired Giraffe.

The opportunities are there to be taken; retailers and developers have the tools to solve challenges on both the merchant and consumer side. With PayPal’s Beacon and other offerings, there’s a lot happening on the merchant’s side, but there has to be an education on the consumer side to make sure they’re happy doing what retailers are planning for.

All of this could fall down if consumers just aren’t aware of any benefits or are simply not willing to engage. Naturally there are dangers that the first generation are too gimmicky, but given a lot of retailers got their fingers burned during the first generation of apps a few years ago, they should have learned their lessons and have the experts in place to ensure the BLE revolution is a success for retailers and consumers alike.

Ed Lea is the founder and CEO of mobile payments service Paddle.

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