Thoughts

Why Bluetooth® beacons will change the future of retail in Australia

By Patrick Carne27th November 2013
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When Apple and Google get behind a new technology innovation it's almost certain to make it to the mainstream masses. And that's exactly what's happened with Bluetooth® low energy (BLE) powered beacons. These small in-store transmitters really are set to change the future of retail in Australia and around the world and we're about to explain why.

So what exactly is a beacon? Put simply, a beacon is a small wireless device that broadcasts tiny radio signals. Smartphones that are nearby are able to listen for these signals and communicate with the beacon and exchange data and information. The best part is that BLE really is low energy, with claims that each beacon can run for up to two years on single battery.

Beacons can communicate with smartphones that are as close as 5 centimetres or as far as 50 meters away which opens up a whole range of exciting targeting opportunities for retailers and other businesses with a physical presence. And if that's not enough, Apple, Google and Nokia have all indicated native support of BLE devices which means that the majority of Australians will soon be walking around with beacon compatible devices in their pockets.

So what's the big deal? Let me bring it to life with an example. Next time you walk past a shopping centre, an in-store beacon will detect your smartphone and automatically notify you that your favourite brand is on sale to draw you inside. Then once you're inside, product beacons will provide you with detailed product specs and targeted offers as you're browsing the shelves, and eventually you'll be able to pay on the spot using your mobile wallet and walk out.

But it doesn't stop there. Now imagine that the beacon at the cashier has recognised your smartphone is in range and has brought up your customer profile on a smart iPad dashboard for the sales assistant. The profile contains details on your shopping preferences as well as past purchases. The sales team are now armed with information that should in theory make your in-store experience a much better one.

Next, you wander over to check out the latest running shoes on offer and after finding a pair of Nikes that takes your fancy you decide that you want to try them on. You look around hopelessly for a sales assistant but can't see anyone nearby to help. You pull out your smartphone and push the "Need Assistance" button that is presented on the screen and the sales assistant promptly appears to help you out with your Nikes.

All this happens passively without you even loading the app to get information. You just need to have Bluetooth enabled and an app that can communicate with the beacons. Sounds a bit creepy? It could be, but the onus will be on retailers not to abuse the privilege and ask for appropriate permissions from users. Retailers should be thinking about how they can add utility and value as opposed to how they can push more messages at consumers who are already bombarded with hundreds and thousands every day.

So are beacons just a lot of hot air? We don't think so. Apple has included a feature called iBeacon in its latest operating system iOS7 and Bluetooth® low energy is supported on the iPhone 4S. Google has been supporting Bluetooth® low energy since Android 4.3. There is still a lot to learn about Apple's iBeacon plans - all we know so far is that through iBeacon an Apple device can talk to or act as a beacon. This means that Apple devices will be able to seamlessly communicate with one another, which opens up another realm of possibilities for marketers.

Australians are notoriously early adopters when it comes to mobile technology so preparing now for the application of beacons makes a lot of sense for Australian retailers. We have one of the highest rates of smartphone penetrations in the world, and a recent mobile consumer study by Google indicated that 77% of smartphone owners in Australia use their smartphones while in a store. In addition, 27% have changed their mind about purchasing a product or service in a shop as a result of information gathered using a smartphone.

One obvious limitation of beacons is that you need to have a smartphone app to take advantage of the technology. Basically, the beacons need something to communicate with in order to exchange information or trigger events so before you rush out and start developing a beacon strategy you must first decide whether a mobile app is something your business can benefit from if you don't have one already.

So how can we help? We've just launched a product called Lighthouse beacons which is an all in one mobile marketing platform that allows you to send personalised notifications and content to people as they move through your venue or store. We're also one of the first suppliers in Australia to integrate beacons with mobile apps.

If you would like to chat about how beacons can strategically benefit your business then we'd love to hear from you. We're betting this technology will change the retail landscape for good.