By David Dorf on Sep 09, 2013
There is much anticipation surrounding tomorrow's Apple event. I'm sure we'll hear about new iPhones and iOS7, and we might even hear a bit about iPads, iWatches, and AppleTV. But I'm really waiting to hear more about iBeacons, a Bluetooth low energy solution for micro-location detection. iBeacons are going to bring us one step closer to Minority Report marketing, for better or for worse. Actually, the combination of iBeacons and wearable tech like the rumored iWatch or Google Glass could take us beyond contextual advertising and into useful engagement. So why should retailers care?
Location is a key contextual clue for target marketing. Knowing where a consumer is, especially relative to your store, helps determine when and how to target them. This has been the approach behind geo-fencing, where consumers are sent marketing messages via their mobile phone based on crossing certain boundaries. Go near the slopes and I'll send you information on new skis. Go near my store and I'll entice you in with a coupon. Go near my competitor and I'll remind you of our price-match guarantee. You get the point.
Location is determined using several technologies leveraging mobile phones, none of which work that great indoors. Current technology is good enough to know you're at home but not that you're in the kitchen. An inexpensive way to better triangulate the position of a mobile phone is to strategically place a few iBeacons in a store. These battery-operated devices are offered by several vendors. (The image above shows an Estimote iBeacon attached to the wall.) The iBeacons send signals that iPhones running iOS7 (and presumably other phones in the near future) receive and then calculate distance. The iPhones themselves can also act as iBeacons, building a dynamic mesh network.
If you'll recall, the ShopKick app uses a similar concept based on sound instead of bluetooth. In either case, this enables retailers to engage with consumers via their mobile phones based on their specific indoor location. Consumers can receive offers based on the department in which they're standing, or based on how long they linger in one place. If consumers can get past the creep-factor, then there's lots of utility in this approach.
So while you're reviewing the Apple announcements, pay close attention to what's said about iBeacons. And consider how iBeacons combined with an iWatch might enhance the Passbook experience while shopping.
UPDATE: Looks like Paypal Beacon is similar.