Getting Up Close and Personal: Beacons for Location-Based Marketing

In 2013, Apple introduced another digital disruptor to the marketplace – the beacon, a low-cost device with a broadcasting range of only a few metres, driven by the iBeacon protocol, supported by iOS. It is designed for indoor use to communicate with a customer’s smartphone, using Bluetooth low energy technology (BLE). While the range is restricted, the beacon is ideal for positioning at strategic areas for various purposes: from notifying the customer of a special offer on the shelf they are browsing to keeping track of large assets, such as plant on a building site. What is required is that the smartphone has the appropriate app loaded to initiate the conversation. By downloading the app, the customer has given permission for messages to be sent to him. iBeacons also communicate with Android devices, but the functionality differs between the two platforms:

• with an iOS device, iBeacon can open the app even if it is closed.
• with an Android device, the app must be running for iBeacon to communicate.

It did not take long for the marketplace and the competition to see the potential of the beacon. Google introduced Eddystone in 2015 to plug the gap in the Android market, while also being supported by iOS. Eddystone has an advantage over iBeacon in that it can communicate with both iOS and Android phones, even if the apps are not running. Possibly due to this capability, Eddystone has been growing its market share, while iBea-con’s has dropped slightly. There are other companies competing for market share, either with their own hardware or their own platforms, such as Qualcomm with its Gimbal device.

Beacons can be used on their own or as part of a location-based composite of beacons, geofencing, WiFi and other aids, such as NFC (near-field communications) and QR codes. However, the beacon is the predominant technology for location-based communications, used in over 90% of cases.

Delivering an Enhanced Customer Experience

Initially, there was an overenthusiastic use of beacons to push sales messages out at every opportunity, which created a negative perception among customers. Thankfully, as the market developed, many innovative solutions have emerged that provide value in other ways, such as enabling travellers to locate their baggage or reward good driving behavior with lower premiums. The versatility of applications will grow even further as the market matures. Let’s look at a few cases where improving the customer experience has been the focus.

Winning the Triple Crown – San Diego Airport

In 2003, Gartner Group defined the “triple crown” as business process improvement that added value for the customer, increased revenue and reduced costs. San Diego International Airport has deployed a combination of beacons, wearables, geofencing and Wi-Fi to win that crown.
The initial plan was to improve the entire customer experience of catching a flight, as well as addressing internal processes that could do with improvement. While the offering is still evolving, it has already achieved the following:

• engaging the customer via an app from the time they leave home, until they board their flight. This is done via providing routes and timing to the airport from home, parking assistance and a navigation guide (also known as “wayfinding”) within the airport. Luggage location and information about the merchants in the airport is also provided.
• providing a common platform for merchants to reach the traveller with suitable offers and specials, and thereby increasing revenue.
• improving the efficiency of IT callouts, by equipping the IT support staff with a smart watch that can be alerted by a beacon. If there is an equipment failure, such as a scanner malfunction, the beacon will send a signal to the closest IT resource and a service ticket is generated.
• the beacon infrastructure also relays information to airlines, baggage handling, apron services and other stakeholders.

Future developments include extending the value chain from and to connecting airports, creating a seamless experience for the traveller.
San Diego is not an isolated case: 84% of US airports are planning to implement a location-based solution by 2019, if they have not already done so.

Museums are Evolving

Museums were early adopters of beacon technology, often helped along the way with grants from philanthropic initiatives, such as Bloomberg Connects. The Canadian Museum of Nature developed a pilot app using Estimote beacons that allowed users to evolve a “blob” in five easy steps. As they approached a new beacon, the creature would grow a new feature, until it developed into a bird, goat, insect, fish or reptile. This project was stage-managed with just five beacons.
The museum projects have identified some limitations and issues in the use of beacons; the Brooklyn Museum, one of the beneficiaries of Bloomberg, note how the beacons had a limited color range and a nasty tendency to fall off the walls, as well as having their signals disrupted by their surrounds. However, these are early days, and the pioneering spirit of the museums will help in developing foolproof BLE beaconry.
While there are other imaginative museum applications, the replacement of those clunky AV devices with an app running off a smartphone has to be an improvement for all concerned. What is more, the visitor can be retargeted with notifications of upcoming exhibitions and the museum can gauge footfall and engagement throughout its premises.

Enabling the Visually Impaired

Wellington City in New Zealand considered the hazards of negotiating the city for the visually impaired, and developed an application called “Blindsquare” that enables visually impaired citizens to negotiate the CBD. The initial implementation involved 200 beacons which activate the app to speak to the user, describing the shop or building being passed and what it offers. Additional information, such as the street name and the nearest bus stops are also provided. For now, the service is limited to iPhone users, but this will surely expand to visually impaired Android users.

Enriching the Customer Experience

While we can be sure that the majority of beacons installed now and in the future will be trying to convince the customer to part with their hard-earned cash, some of the imaginative uses illustrated above are geared towards building a greater customer intimacy and enhancing the brand. The ability to gather data via the beacons will enable airports, retailers, malls, cities and other entities that interact with large volumes of people to build better and closer relationships with these customers. The low entry cost of beacon development (kits are available for as little as $99) also allows small businesses, NGOs and other bodies who do not usually have budgets for such undertakings to roll out their own proximity marketing. The only other requirement would be to engage a company specializing in mobile application development. As long as care is taken not to bombard the smartphone owner with too much information or to be too intrusive, we can predict that beacons will be-come an indispensable part of daily life, just like our mobile phones.