Apple’s iBeacon to propel micro-location revolution
Of course, there is already NFC (near field communication) implemented as radio frequency identification tags that can be embedded into product packaging or as RFID stickers that can give product-specific information, pricing and speed up the check-out. But NFC does require the user to get very close (a few centimetres) for the wireless transfer of information, and not all phones support NFC, the iPhones representing a big chunk of those NFC-less units.
Quick Response (QR) codes printed on labels, posters or packages are another way to engage with consumers. These 2D bar codes, once captured with a smartphone camera, will directly take your browser to the company’s website or will pull other specific marketing content.
But both NFC and QR codes require an action from the smartphone users who have to look for an identifiable logo to tap or scan. This is not intuitive and many would-be customers will miss the additional marketing package altogether.
According to Jakub Krzych, Co-Founder and CEO of Polish startup Estimote, both NFC tags and QR codes ask too much from the end-user. “From a user-experience perspective, these technologies create too much friction”, says Krzych who develops Bluetooth Smart-based beacons for retailers to implement micro-location marketing and couponing within stores.
Developed by the Bluetooth Special Interest Group (SIG), Bluetooth Smart is based on the Bluetooth 4.0 Low Energy radio with additional general attributes-based profiles such as Find Me and Proximity to enable what Suke Jawanda, CMO of Bluetooth SIG describe as “the internet of my things”.
“There is no reason to connect everything directly to the internet” explains Jawanda who sees power issues with such schemes.
Instead, you can have peripheral devices, appliances and beacons broadcast their ID and their distance to surrounding smartphones which are well connected to retrieve more information from the cloud. The new protocol stack also allows indoor real-time tracking. Triangulation and precise geo-location is worked out in software by the smartphone receiving the IDs from the nearest beacons. In comparison, GPS indoor dead-reckoning or WiFi-based geolocation alternatives are battery-draining for the smartphone user. In retail stores, establishing such a contextual communication channel with consumers ties up very well with Bluetooth-enabled mobile wallets.
“The story is not just about retail shops pushing messages to their visitors”, emphasizes Jawanda. “Some of our members develop Google Glasses for hospitals, which could directly display the information relative to a patient’s history as they walk in the room”. “We also see many projects for museums to deliver contextual information and schools, where specific teaching aids could be pushed to the smartphones while limiting other cheatings”.
Other scenarios include available parking spots messaging your phone as you drive by, or setting up beacons at home, so your smartphone could automatically turn on the lights as you arrive for example, or trigger other appliances based on what you’ve set up in your personalized app. It could even notify someone else.
Leveraging consumers’ physical presence
“Despite all the e-commerce, these days, 95% of all transactions happen in the physical world”, stated Krzych, “and beacons offer a huge opportunity for retailers to bring not only a friction-less experience to consumers with coupons and key marketing messages, but also to get valuable data such as visit duration, the consumer’s circuit inside the shop and the level of engagement with promotional messages”. “So a retailer could optimize prices, your price may be different from the price displayed on my phone based on our respective purchasing history”, Krzych said.
Estimote presents its Beacon implementation as a tiny 2.4 GHz Bluetooth 4.0 Smart sensor node, packing a 32-bit ARM Cortex M0 CPU with 256kB of flash memory, an accelerometer and a temperature sensor. The accelerometer could monitor a door, for example, a fridge could open up your shopping list ready for completion at home, later a beacon in the dairy aisle of a supermarket would remind you that milk is on your list.
For easy deployment, Estimote’s colourful beacons can be stuck to any surface.
Depending on the signal strength and how frequently they broadcast their ID around (20 bytes long), the devices can run up to over two years with a single coin battery, the company says. It reacts to consumers’ proximity within any range programmable from Bluetooth LE’s maximum range of 70m to a few meters, but the proximity range could be narrowed down to 10cm depending on the granularity required for the micro-location and context. Each beacon could be dedicated to a specific product discovery and pass on the information to the next (via the app running on the smartphone).
For example, a first beacon would greet you at the entrance of a restaurant at street level, offering you the menu, a second beacon at table-level could take your order and pass it on directly to the kitchen. Or leaving the table-area in a furniture shop where you would have interacted with different size options from the online catalogue, the next beacon in the chair display area could ping your phone about matching chairs at a discount if purchased with the table.
Avoiding notification overload
Of course, you have to use the beacon feature in a subtle way. “We expect that if there isn’t enough added-value for them, annoyed consumers will kill the application straight away”, commented Krzych. So Estimote educates its customers with guidelines to implement clever scenarios that really bring value to their clients. So far, the company has more than 40,000 nodes running in pilot projects and over ten thousand development kits sent out around the world for contextual applications.
It is only last December that Apple started to promote micro-geolocation through its own stores, using a newly launched iBeacon application supported by iOS 7.
“Apple is always designing its products with a priority on customer user-experience, and it did a great job at making iBeacon friction-less”, said Krzych.
“For example, if you keep your phone in your pocket, the beacons won’t ping you with unnecessary messages. But if you unlock your screen as you move towards a product, then you may want to interact with an item or take a picture, this is when the nearest beacon will send you promotional info” he added.
However, even when locked, the smartphone could be continuously monitoring the strength of the signal to notify the application whenever the user enters a zone, to change their context.
Apple didn’t release the final specifications of iBeacon to developers, but the company promised to release them within the next couple of months or so, according to Krzych who watches this space closely. Anyhow, the beacons come with a fleet-management system and can be updated over the air. The startup expects full-scale deployment of beacons worldwide later this year.
PayPal is also experimenting with beacons to facilitate the use of its e-payment solution in stores, though the company claims the PayPal beacon won’t constantly track users’ location. It will only take information from users who opted-in. The company is piloting PayPal Beacon in a few stores in the US and Australia with plans to expand to the UK, Canada, France and Germany.
With these new developments in mind, Jennifer Kent, senior analyst at market analysis firm Parks Associates expects Bluetooth to play a much larger role in the mobile wallet ecosystem in 2014.
Visit Bluetooth SIG at www.bluetooth.com