iBeacons: transforming the customer experience

16 September 2014

With the rise of beacon technology and the potential revolutionary impact on the in-store customer experience, we explore how brands can use beacons to influence buyer behaviour, impact the shopper experience and ultimately drive a more relevant and personalised relationship with their customers.  

What are iBeacons?
As one of the marketing buzzwords du jour, there has been some confusion as to exactly what iBeacons are and how they’re used. In summary, beacon technology is the latest hardware to rival other mobile technology such as the NFC (near field communication) and QR codes. The beacon itself is a small wireless device that constantly transmits radio signals through Bluetooth low energy (BLE) to smartphones and tablets, acting as a micro-location and positioning tool allowing iPhones and iPads to constantly identify nearby Bluetooth devices from beacons - and triggers location-based actions e.g. if a person walks into a coffee shop, the beacon can trigger an action such as a discount voucher appearing on their smartphone to use to buy their coffee that day.

How can marketers benefit from using iBeacons?

iBeacon technology presents numerous opportunities for marketers across all sectors to essentially create more personalised relationships with their customers. With the ability to ensure content is targeted, relevant and dynamic the benefit of being able to gain a more granular insight into customer behaviour is invaluable; from shopper behaviour and location tracking to spending history. A number of brands across different industry sectors that have been quick to explore the potential of beacon technology across their distinct customer journeys:

  • Retail
    Attention always seems to turn to retail as a particularly fast paced consumer and business environment. With real-time marketing being mastered online, the ability to do the same on the high-street is important to create more consistency in the shopper experience. Marketers can map out the customer journey from the moment they enter the store to how they journey through the store in order to help drive the effectiveness of messaging whether on the shelf, in the aisle or more personally targeted at any one consumer.

    Apple themselves, as one of the pioneers of beacon technology, have launched iBeacon in all of their US stores. This allows them to welcome consumers to the store, provide notifications when customers’ orders are ready, track when a customer is looking at a particular product range and send relevant coupons to encourage a sale, along with a streamlined payment process offering the option to scan a product, pay and receive a digital receipt. 

    The micro-location support for a retail assistance app seems like the perfect extension. Ror example Waitrose, a chain of British supermarkets, allow customers to call for assistance in trial stores by using their app via iBeacon technology – a member of staff will receive a notification of the assistance request on an iPad along with key data of who the customer is, what they like based on past purchases and even what aisle they’re currently located in, allowing the staff member to give an exceptionally personalised customer experience.

    With smarter, faster decision support, iBeacon can identify customers looking at a product range, run a quick check of their sales history, see if this suggests a potential first-time purchase, a coupon can be sent to the customers’ phone and into their Passbook. US pharmacy chain Duane Reade has trialled iBeacons in 10 stores across New York City to complement their loyalty programme. Using the iPhone app, which has been designed to foster greater customer engagement whilst in store and push promotions directly to the customers phone, Duane Reade are able to use the micro-location data to check a shoppers purchase history and recommend relevant items based on their precise location within a store – allowing for the old adage of providing the right content, to the right customer, at the right time and in the right place.
  • Travel
    Airlines and airports can benefit from beacon technology to enhance the customer experience within the airport before they even get on the plane. Most travellers would likely welcome anything that genuinely improves their experience at the airport.

    Trialled in Heathrow airport, Virgin Atlantic passengers who have their boarding pass loaded into their iPhone Passbook app were sent notifications such as special offers depending on where they were in the airport. If they were first class passengers and they were approaching the security gate, their boarding pass would be automatically loaded on their phone ready for inspection.

    EasyJet are utilising iBeacons at London Luton, London Gatwick and Charles De Gaulle airports with the aim of helping their passengers’ journey around the airport, by sending them notification messages in different locations for example, passengers near check in or the security gate will be reminded of what documents they need to show. The EasyJet trial allows any customer with the EasyJet app travelling through those airports to benefit, generating greater volumes of data more quickly to evaluate the potential of this technology. American Airlines are taking a similar approach in using the technology to improve the travel experience and specifically guide passengers around the terminal in Dallas Fort Worth International airport and inform them of relevant information such as boarding updates and walking time to gates based on their location.
  • Event venues
    There is huge value for venues and leisure attractions in using iBeacons to give visitors more information when they are there and enrich their experience. Ruben’s House, a museum in Antwerp are using iBeacons as a way of being able to guide visitors around the exhibits and notifying them of the background and stories to the paintings and architecture through their app. This helps in creating both a physical and digital experience for consumers when visiting the museum, which also may help in attracting a more diverse audience.

    Sports stadiums are starting to install iBeacons. Knowing where fans are sitting and what premium seats remain unsold allows the venue to offer target customers with precise seat upgrades in a specific location. Food, beverage and merchandise sales to individual seats can be targeted and ordered via an app.

    Major League Baseball installed iBeacons in 28 ballparks across the USA last year, allowing Apple device users to automatically check-in to games and collect on-site special offers. This year, additional installations are planned along with enhancements to offer app users additional content and interactive features via their devices.


What are the challenges?
There is a real risk with the increasing implementation of iBeacon technology, consumers will feel bombarded with mobile notifications and messages wherever they go. In an extreme example, if a consumer is being contacted by a retailer every time they walk through a store, even when it’s turned off,  this could damage the relationship to a point where they delete the app. This could be likened to the irresponsible email marketer being consigned to the spam box. As a result, brands will need to plan and responsibly apply how this new found ability to reach their consumers can be used in a relevant and personalised way to enhance their experience. 

One other downside is that it does need Bluetooth to be activated on the phone for this to work. Usage of Bluetooth can be limited and there are various estimates on the percentage of consumers by country that regularly have it turned on although US and Canadian users do appear to have the highest usage rates. However this may mean that today's proposition might just pass a large proportion of people by completely, until more consumers change their Bluetooth setting to always on.

What is the future for iBeacons?
It’s likely that smarter, faster retail marketing will become the norm and micro-location will undoubtedly play its part in this. But are we looking at another standards war? With Apple supporting this technology, it provides a strong suggestion that their use and popularity will only grow in the future.

What is clear from a marketers’ perspective, is that beacon technology has the potential to be a game changer, if used in the right way. A customer-centric, well-crafted value proposition, leveraging the potential of this technology, will be key to ensuring success and creating value in the long term – both to brands and to the consumer.