iBeacons: Location, Location, Location

February 27, 2014

In a recent interview for an upcoming Retail Paper we were asked to give our opinion on the future of location-based services, especially looking at the influence of new technologies such as Bluetooth Low Energy.

iBeacons

What could be the most valuable feature of location for retailers in 2014?

iBeacons will probably be one of the most disruptive technologies opening new doors to location-based services. iBeacons are a sub-set of Bluetooth Low Energy (BLE) devices first designed by Apple. In essence, all these devices do is broadcasting an identifier over a BLE channel. You can imagine them as NFC tags that would actively send their identity to all phones within a range of up to 50 meters.

iBeacons are interesting for various reasons but what’s really fascinating about them is that although they are technologically really simple they have the power to drastically reduce the IoT bootstrap challenge (i.e. what does it take to connect to an object) and fundamentally change the game of location-based services.

They can fuel the ability to move from coarse-grained location systems (e.g. in a mall) to hyper-location systems (e.g. in front of this shelf/product) based on Bluetooth Low Energy technologies.

This shift yields two important new features:

  1. The obvious one is an improvement in granularity. In 2014 retailers will be able to know where the user is in the order which a meter-scale accuracy. This opens doors to a large number of new use-cases and possibilities.
  2. The second one is an improvement in terms of required infrastructures. Technologies likes iBeacons and more generally BLE can be deployed much more easily than Wifi systems or cell-based localization primarily because they are wireless and battery powered with batteries lasting for a couple of years. This shifts the power from telcos and networks providers into the hands of Internet of Things and digital marketing SMEs and startups like EVRYTHNG, hence reducing costs and time to market.

ibeacons

What could be the most welcomed use of location for consumers in 2014?

Accurate indoors positioning seems to be an obvious and useful use of such technologies: they will be able to guide customers more efficiently directly to the goods and offers that matter most to them. It will also allow truly customized marketing messages both in terms of user-profile (extracted from social networks) and hyper-proximity (e.g. because you are in front of THIS shelf).

It is, however, hard to predict how users will react to these ultra-targeted and hyper-local marketing campaigns. Obviously the likelihood for customers to embrace them will be intimately linked to how compelling they are and how do they respect the customers’ privacy and data.

ibeacons

What is the biggest barrier to scaling location based marketing in 2014?

There are a number of important technical barriers: first, only the newest smart phones (iOS and Android) will support hyper-location technologies such as BLE. Then, although both Android and iOS support BLE since the recent version, the iBeacons of the Apple ecosystem use proprietary foot-prints and hence are not supported out-of-the box or officially on Android which will lead to a market fragmentation that could be harmful to these deployments from a retailer point of view.

Finally, a the time of writing, smart phones operating systems (i.e. Android and iOS) do not directly react upon discovering iBeacons or BLE devices. This concretely means that a native application has to be installed on the phone in order for it to pro-actively react upon seeing iBeacons. While this model allows for more than one player to provide iBeacon based services it also means that the market penetration of this technology is further limited by whether or not people have an iBeacon capable app installed on their phone.

iBeacons, privacy

How do you think the privacy discussion will evolve in 2014?

Customer acceptance will be key, especially looking at where technologies like EPC RFID failed to convince the masses and hence were banned from several stores. However, because unlike EPC, technologies like iBeacons have a direct benefit for consumers and consumers always put the cost of their privacy in balance with the benefits they get from the technology.

Consumer acceptance will also be greatly depending on how the retailers and mobile phone OS providers (i.e. Google and Apple) will manage the consumer data across the location-based services. A centrally managed profile of customers accessible to all the location-based campaigns at the OS level is likely to raise a lot of concerns compared to a decentralized or an app-centric profile management where a consumer profile is only accessible to the app they are currently using and opted-in for and not shared across apps.

ABOUT THE AUTHOR: Dominique Guinard

Dominique Guinard

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