Beacons are small Bluetooth transmitters that can be attached to shelves, products, signs, doors, etc., for example. The small transmitters can communicate with smartphones and thus enable automated communication with individual devices depending on space and time. Using beacon devices, you can hear the sender’s voice, or manage Bluetooth low energy (BLE) or Bluetooth smart technology. Basically, this is a radio technology that can be developed as a further development of Bluetooth. It has been known for years, but instead became known to a personal audience with its main marketer Apple under the name iBeacon. Smartphones and tablets have been tested with this technology from iOS7 and Android 4.3 and are therefore susceptible to beacons.
Cross-section of an iBeacon from Beacon inside:
As with any radio technology, you need a sender and a recipient: these are called beacons. Its range belongs to 50 meters, but it is also heard from up to 75 meters, depending on the stage of development and the manufacturer. When transferring data between the amounts, far-reaching energy conservation is achieved than with the predecessor Bluetooth, which resulted in safe battery consumption for the smartphone. The cost of the transfer also remains fixed. Large amounts of data cannot be exchanged because the transmission rate is relatively low. The beacon devices themselves are activated by battery or, more rarely, direct power connection.
A device can only be monitored by beacon devices if the software (app) is installed. These push messages can then be sent to the smartphone or to a capable smartphone or tablet within the scope of a beacon. If several beacons are included in the radius of action, the location of the receiver can also be felt relatively accurately.
Nokia introduced the underlying Bluetooth low energy technology back in 2006. In 2013, Apple was one of the first beacon providers to present their iBeacon indoor location solution as part of the new iOS7 version. This was the starting signal for the application of beacon technology in practice: Since the beginning of 2014, the first large companies have dared to use the technology and experiment with possible application scenarios.
Beacon technology offers the best prerequisites for successful and widespread use in the market: The underlying transmission technology – Bluetooth – is an established standard that almost all smartphones and telephones support today. The hardware required on the supplier side, namely the beacon devices, is cheap. They are battery operated and therefore completely independent and maintenance-free for a period of almost two years, which hardly leads to operating costs. The question is: What is still standing in the way of the widespread introduction of the technology on the market?
What can the beacon transmitters do?
First: If several transmitters are accommodated in one room, the location of a smartphone and thus the visitor can be determined using the transmitter. The visitor’s device ID (UUID) is determined, which enables the user to be tracked across several rooms. Accurate location of people and devices has been difficult, especially in closed rooms, now Beacon makes it possible. For example, it will also be possible to guide people intelligently through large buildings such as hospitals or airports.
Second: If a smartphone approaches a transmitter, the transmitter can send specific information to the smartphone. The offers, promotions or further information mentioned at the beginning can be sent directly to smartphones.
“Bringing the Internet into the store – that must be the maxim for everyone who wants to serve these customers. This is the only way to keep the internet generation happy and at the same time beat the online competition with their own resources: target group addressing and analysis. ”
Beacon devices on retail opportunities
Beacon technology offers retailers the opportunity to target customer flows and to provide customers with the right information at certain points. Concerns that users might use their smartphones to compare prices or visit competitors can now be addressed with a specific “counter-offer”. It cannot be prevented that smartphones are used more and more in shops. With Beacon, however, retailers have the opportunity to control which content users access. Anyone who is creative here can certainly employ and retain one or the other customer sensibly and motivate them to shop.
Disadvantages of Beacon devices:
Unfortunately, there are currently three hurdles that should make life difficult for retailers at least in this country:
• Bluetooth must be activated on the smartphone.
• Users have to agree on the corresponding app that they want to receive information.
• Users in the respective store have to agree again that they want to receive information from this store.
It is probably only a matter of time before either the batteries get better or users activate Bluetooth because the benefits have increased accordingly. For example, our smartphones are already connecting to cars, loudspeakers, headsets, watches, glasses, etc. via Bluetooth, etc. The more devices and services we connect and the more use they provide, the more often we will be open to exchanges via Bluetooth by default. Then Beacon could also become what the term means: a beacon that attracts users and provides retailers with new opportunities in addressing customers and analyzing customer behavior.
Reasons for the slow penetration of beacon devices
The beacon technology itself is very simple and inexpensive. But only when different platforms interact in the background do companies manage to create personalized experiences that delight customers: Relevant technologies here are CRM systems, databases and, last but not least, good analytics tools in order to be able to evaluate the generated data in real-time, If possible, don’t forget the apps on your customers’ smartphones. Because without this, nothing would happen to the one-way signal sent by the beacon.
The second reason for the sluggish market development is the lack of beneficial application scenarios for the customer. There are many approaches and test runs from large renowned companies such as Apple, American Eagle, Best Buy, J.C. Penny, Macy’s, and Tesco, but no one has yet found a really convincing concept. In retail, in particular, companies receive huge amounts of top-quality data such as movement patterns in stores, prestigious articles and much more thanks to Beacon. On the other hand, the decisive added value is often missing for the customer.
Furthermore, there are still some open questions that are currently standing in the way of obstacles:
What is the sensible frequency of push messages without flooding the customer? How can the customer be convinced to use the provider’s app? Are “between-app” interactions also possible for retailers, as with the current iOS “Health App”? The “Health App” enables various special apps from other providers to be integrated and data to be exchanged without the customer having to download a separate app for each provider. Is today’s solution to the opt-in principle sufficient to clarify the question of transparency and data protection for the customer? Or will the opt-in procedure be replaced in the long term by a note in the terms and conditions, which means that the customer loses track of which apps send which data and when?
Assessment of future effects of Beacon devices
The already very high level of maturity of the technology enables it to be used immediately. At the same time, the pure acquisition and operating costs for the beacon hardware and the apps are manageable. The use cases of the technology, which are still unclear, are likely to emerge from the current trial and error phase soon. There are many possible uses for companies from a wide variety of industries, but also for private users. A viral effect on companies and users can, therefore, be expected as soon as there are first successful use cases.
Beacon devices are therefore likely to have a major impact on the market of the future because they offer a possible solution to the ongoing discussion about the lack of connection between offline and online channels towards a real omnichannel experience.
• They open up completely new possibilities in customer loyalty and improve communication between companies and their customers.
• They support additional services as well as better cross-selling and up-selling.
• They are the basis for tailor-made and individual offers.
Because of these possibilities and the low entry costs, it makes sense to deal with the technology as early as possible. Good and thoughtful usage scenarios do provide additional value to customers, which is very different from competitors. However, it should be borne in mind that the strengths of the technology, namely low costs, and an open technology standard, can also be quickly used by competitors. It is, therefore, necessary to maintain the lead gained through constant further development in order to achieve constant differentiation from the competition.
5 steps to successfully use beacon technology
The topic of the beacon devices is still very present and is enjoying a steadily growing cross-industry interest. This is due on the one hand to the enormous versatility of the possible uses and on the other hand to the continuous advancement of technical developments.
For example, besides Apple, Google also launched its own beacon project called Eddystone this year. With iBeacon and Eddystone, the two most influential IT companies rely on the expansion and distribution of proximity and location-based services.
Location-Based Services (LBS), location-based mobile services, provide the end-user with selective information, mostly with the help of GPS. Proximity Based Services: A subset of LBS that requires additional devices (beacons) in order to be able to determine one’s own position or proximity.
The great response to our technical article iBeacon – technology, origin, and future, which primarily describes the technical background and general functions of beacons, confirms that we are building up further competencies in this area and offering them for both advice and services.
We show how you can successfully build beacon technology in 5 steps. A possible application area explains in detail the procedure of proximity and location-based services.
Fig. 1: 5 steps to successfully use Bacon technology
Step 1: Use case
A suitable application is a basis for a successful product. Beacon technology requires a high level of user acceptance. When used, for example in retail, attractive customer experience must be created.
Specifically, this means that use cases that offer proximity and location-based services based on beacon technology must be designed so that the user is ready to switch on Bluetooth, the mobile Internet / WLAN and, if necessary, the location services on his mobile device. In order that the full potential of beacon devices can be exploited, context and location-related information should ideally be assigned and managed in a content management system (CMS). By outsourcing the functions for communication with the beacons and the CMS in a software development kit, apps can be quickly connected to proximity and location-based service.
Step 2: Circumstances
In this step, the prerequisites are determined that are relevant for the use of proximity and location-based services based on beacon technology. The focus is, among other things, on the integration of existing systems, which should play a role in the establishment or integration of proximity and location-based services. The following points must be taken into account when determining the circumstances:
• Mobile devices
• App installations
• Data connections / interfaces
• Customer data
• Location data of the company and the branches
• Personal data
Based on the specific requirements, the requirements can be defined in the next step.
Step 3: Requirements
The specification of the requirements is an important step for the successful establishment of proximity and location-based services, based on beacon technology. They serve on the one hand for structuring and on the other hand for the visualization of the project scope. This creates the basis for the control and implementation of the project. In order to determine the scope of the project, the following required criteria must be clarified:
Step 4: Implementation and commissioning
For the establishment and implementation of proximity and location-based services, the areas of hardware and software are divided into the following implementation steps.
Step 5: Tests
Various hardware and software tests are essential so that beacon technology based on proximity and location-based services can be used successfully.