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Beacon Technology

11/17/14 . UCI Trend Lab

What’s the Trend:
An increase in the installation and use of beacons by a variety of industries. Beacons provide a new digital access point to consumers, using Bluetooth technology to communicate with consumers’ smartphones (with a coupon, advertisement, reward, general information etc.) to enhance the consumer experience and collect consumer data.

What’s New:
First there was geofencing, the practice that uses GPS coordinates to enclose a certain area, then takes a user’s smartphone latitude and longitude to determine if a person is inside, outside or has crossed over into the given region. This technology is expensive, has a huge impact on a person’s smartphone battery life and requires satellite and cell phone towers to work.

Now beacons have emerged as a new, less expensive location-identifying technology. Beacons are small devices that use low energy Bluetooth technology to estimate the proximity of a person with a beacon-enabled smartphone. iOS Engineer Andrew Frederick says you can think of beacons as a “mobile geofence.” The signal broadcasted around the beacon can be configured to trigger an action on a person’s smartphone when the individual is entering, leaving or even just within a few feet of the beacon range. Andrew Frederick points out that this functionality is a “game-changer” with “real world implications in nearly every field.”(1)

One industry that will benefit immensely is retailers who will be able to collect data on how consumers maneuver through stores and who the repeat/loyal customers are. They can send frequent visitors a reward via a beacon. Beacons can also be useful to direct shoppers to a desired aisle.(2) In the UK, the retailer House of Fraser announced beacon-equipped mannequins in one of its stores to create a more engaging retail experience. When a consumer walks within the mannequin’s beacon range, the consumer’s smartphone receives details about the mannequin’s clothes, accessories, price of the items, where in the store they are located and link to where the items can be purchased on the site. Beacons also have the potential to help get consumers inside the store. If a beacon is placed in a window, it can send out promotional information to people passing by.(3)

Beacons have already begun to be placed outside buildings, inside stores, and in various sports arenas. Eric Grubman, the NFL’s EVP of Ventures & Business Ops says beacon technology will help revolutionize the stadium experience and drive fans back to live events. With beacons, fans can be directed to open parking spots, the shortest bathroom lines, the cheapest concession stands or easily be able to view instant replays on their phone. The Dallas Cowboys AT&T Stadium and San Francisco 49ers Levi Stadium are two programs that have embraced beacon technology. The data for teams will be crucial, providing answers to such questions as: “How often do they come? Where do they go in the stadium when they are there? How many beers do they drink? How many hot dogs do they eat?”(4)

Why it Matters:
Beacons, if widely adapted, have the potential to change how advertisers reach customers. Brands could reach their desired consumer directly at retail, which could impact their need to deliver their messages via traditional media, such as television. With this, retailers and advertisers will be able to gain valuable insight into the Hispanic consumer in a range of industries.

References:

  1. Porter, Michael. (2014, February). “What’s The Difference Between Beacons and Geofencing?” Perficient. http://blogs.perficient.com/portals/2014/02/25/whats-the-difference-between-beacons-and-geofencing/.
  2. McDermott, John. (2014, January). “WTF are in-store beacons?” DigiDay. http://digiday.com/platforms/unanswered-questions-store-tracking-beacons/.
  3. Skinner, Steven. (2014, September). “Beacon technology offers plenty of opportunities for retailers.” The Guardian. http://www.theguardian.com/media-network/media-network-blog/2014/sep/04/beacon-technology-house-of-fraser-waitrose.
  4. Wallace, Tracey. (2014, August). “Driving Fans Back to the Stadium – One Data Point at a Time.” Umbel. https://www.umbel.com/blog/sports/driving-fans-back-stadium-one-data-point-time/.

Beacon photo courtesy of Estimote.com

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