When Apple announced iBeacon in June 2013, it was heralded as a marketing game changer. With its ability to pinpoint smartphone-toting shoppers by specific store aisle, airport gate or stadium section (and with accuracy the most advanced GPS and cell technologies can’t achieve), iBeacon promised to make it a cinch to deliver the right message in the right place at the right time.
Though the micro-location technology is still relatively new, a handful of brands are providing a glimpse of how iBeacon is transforming the retail experience for marketers and consumers alike. Here’s a look at how it’s being used and what we can learn from it.
Level set: product and technology
Though the terms “beacon” and “iBeacon” are often used interchangeably, one is a product and the other is a technology.
A beacon is an inexpensive transmitter that uses Bluetooth Low Energy (BLE) communication to broadcast small packets of data. Like traditional Bluetooth, BLE transmits data over a short distance and uses a fraction of the energy.
iBeacon is the brand name for the Apple protocol that allows apps on iOS and Android devices to listen for and respond to these signals when they are within range of a beacon.
Because BLE has a range of about 50 meters, it’s ideal for indoor environments. Retailers have capitalized on it to reach customers in-store, pushing everything from a warm welcome when they walk in the door to exclusive offers as they browse the aisles. All the consumer needs is the relevant app — usually the retailer’s official brand app or a third-party shopping app — and they can receive targeted messaging.
Brands lighting the way
One of the biggest iBeacon adopters is Major League Baseball, which almost immediately put beacons in 28 of its 30 stadiums. The idea is to enhance the fan experience using the league’s Ballpark app from the moment they enter the gate — automatically presenting their ticket barcode on their phone, providing directions to their seats and pushing coupons and special offers when they’re near a concession stand or merchandise store. Because each stadium is unique, so is each fan base’s iBeacon experience. Last year, MLB expanded the program to include content and interactive features around attractions at the All-Star Game.
Other big brands have also jumped on the iBeacon bandwagon. Last Fall, Macy’s installed 4,000 beacons in stores across the U.S. to offer deals and recommendations to shoppers using the Shopkick app. Similarly, McDonald’s rolled iBeacon out to hundreds of its restaurants after a trial at select franchises resulted in an 8 percent increase in McChicken Sandwich sales and a 7.5 percent uptick in Chicken McNuggets sales.
But promotional pushes are only the most obvious way marketers can take advantage of iBeacon. Others are using the proximity-sensing tool in more creative ways.
Currently, Virgin Atlantic uses it to prompt its first class passengers to open their electronic boarding passes as they approach security. It also sends an offer for no-fee currency exchange as they pass that booth. And the airline is looking at ways to provide even richer content, such as mapping airport amenities and introducing crewmembers as passengers board a flight.
Pitfalls and potential
But while iBeacon has sparked marketers’ imaginations, reality may be slow to keep up. A Business Insider Intelligence report found that while more than half of American adults already use their smartphones to help shop in retail stores, there are some obstacles to wide adoption of iBeacon.
Because it’s not a physical product like the iPad or iPhone, iBeacon is more or less invisible to consumers. Even for those who are aware of the technology, enabling it requires a lengthy list of steps including downloading the right apps, turning on location services for those apps, and opting-in to receive in-store notifications on each of them. Even then, once the consumer is in the store, they need to have their phone in their hand and be willing to consult it.
There are also some misconceptions about iBeacon’s magical marketing properties. As Forrester Research’s Thomas Husson noted on his blog, “Part of the problem with beacon technologies is that many marketers are confused about what they are: They believe there is a lot of intelligence in the beacons themselves. The reality is that beacons are dumb pieces of hardware that simply communicate location information that can be interpreted by mobile applications.”
However, marketers’ biggest challenge in implementing an iBeacon strategy may be their own instincts. With such a potent pipeline to consumers, marketers will have to resist the impulse to bombard them with advertising — and disrupting rather than enhancing their shopping experience.
But if marketers can remember to keep the consumer at the center of their iBeacon strategy, the technology presents an unprecedented chance to tailor marketing content based on location, context, user profile and more. While special offers and flash deals are a nice place to start, the real opportunity may be in creating a rich and valuable brand experience that the customer remembers long after they’ve left the store.