ibeacon eskimo

There’s new technology out there creating some buzz. It’s simply the ability for a one-way communication  to occur between your smartphone and one or more radio frequency emitting device(s), called “beacon(s)”.   The capability is enabled by Bluetooth Low Energy  (aka Bluetooth LE).

Common Base Use Case for Retail:

If a retailer places beacon “123” in the cereal aisle, then the beacon can help a receiving device (like your smartphone) know two things:

1) How far away from the cereal you are (and, potentially, are you nearing or exiting)

2) Whether or not you are in the cereal aisle (and, potentially, how long have you been standing there)

What your smartphone (or any other receiving device) then does with that information is a function of the application you have downloaded on the phone – with the most frequent ideas bandied about including the triggering additional product information, coupons or videos. 

TargetDave Peterson, senior group manager of digital vendor marketing at Target, is looking at allowing brands to deliver promotions and messages to consumers through iBeacon while in a Target store.

(source: MediaPost)

What is making the functionality buzz-worthy is that it has all the hallmarks of a classic Clayton Christensen-like disruptive innovation, with the potential to revolutionize many  value propositions – from the supply-chain to health and wellness applications (are you wearing a FitBit right now? If so, you’re already using it. )

As for Retail Marketers, there are two features which make this technical capability particularly exciting: 

1. Cost. Bluetooth LE makes location-based solutions, services and marketing not only more accurate, they are extremely affordable. The beacons, which essentially transmit a continuous messages that says “here I am”, cost very little, between $3 and $5  (actual cost of components) and are powered by common, inexpensive batteries. (Estimote sells a developers package, which includes 3 beacons, for $99 on their site today.)

2. Lower barriers/dependence on consumer compliance. Most exciting to retail marketers is that it removes a significant amount of dependance on consumer compliance to enable location-triggered marketing – which should, theoretically, increase the scale potential of location-based marketing solutions. The consumer no longer has to remember to open the app on their phone when they enter the store.

As long as the consumer has downloaded the retailer’s app at some point prior (and are allowing notifications from the app), the app can open or trigger a notification (or video, or coupon) automatically when the consumer is near a relevant beacon.

Still to be figured out…

Will busy moms shop with mobile phones?1) Will engagement decline after initial use or will consumers love it?  

How the technology is used to improve the in-store consumer value proposition will be critical. Personally, I haven’t seen or heard of very many use cases – yet – that truly improve the in-store experience. As my friend and former colleague used to point out frequently, “I have yet to see consumers walking around the store grocery shopping with their phone in their hand, using it while they shop.” As a single mother of 3 young kids, I concur.

 

2) What else can be done with  – what amounts to – an “in-store” consumer data stream?RetailSpying-620x400 copy

 

Just like our browsing and search histories are becoming highly valued to marketers, will our “in-store” or “out-of-store” actual, physical travels become part of our digital profile? Is that going to be a good thing from the consumer POV or is it going to freak consumers out when spending too much time in the bathing suit section of Macy’s causes Macy’s bathing-suit banner ads to follow you around the web and show up on your Facebook feed?

 

It’s cool tech, for sure, but for supermarkets and mid-tier clothing and accessory retailers I have the following advice:

With Amazon, eBay, Google and the ecommerce engines behind Walmart and Target gunning for your market share – prioritize use cases that make your in-store experience more convenient and relevant first, or you may lose the traffic you are hoping to monetize.  

If you can use advertiser or supplier dollars to pay for the solution, awesome, but don’t lose your focus on what matters! If the technology actually makes your in-store experience annoying, you might just lose points – rather than gain them –  in the in-store vs. online battle for market share.

CAVAET: I admit I may not know all there is know about this technology or it’s potential use cases, but I’d like to know more as I do believe there is great potential here. Please educate me – either via comments below or via email to set up a call.

Susan O’Neal Gear has over 20 years of experience at the intersection of consumers, marketing and technology. Passionate about all aspects of a consumer’s relationship with brands and retailers, we’re spending the next year looking for new, groundbreaking thought leadership  – if not disruptive solutions – with the potential to redefine the parameters of consumer loyalty. If you also want to see some game changing happen -then follow Upstream Insight, contribute your voice, share this post…do something!