Apple's iBeacon Technology Could Redefine Retail by Fusing Physical and Digital Worlds

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Image: Apple[/caption]Apple added a little holiday flair to the shopping season last week when it rolled out its iBeacon technology to 254 U.S. retail locations. These Apple Stores are using iBeacon transmitters to send site-specific messages to shoppers currently in the store by communicating wirelessly with the shoppers' mobile devices. iBeacon transmitters can even accurately pinpoint a shopper's specific location in the store, enabling Apple to send unique messages based on the aisle a shopper is in or a specific product he's near. (Looking at the iPhone 5S? Now is a great time to trade in your old phone and upgrade!)Quietly introduced with the release of iOS 7, iBeacon is a software update that turns any iDevice into a transmitter and receiver for location-based information sharing. Utilizing Low Energy Bluetooth technology, iBeacon allows devices to continuously send and receive data without rapidly draining battery power or constantly requesting user approval. (Incidentally, Low Energy Bluetooth is also the technology that powers Coin, which iBeacon could render obsolete.)

Lighting Up the Network

The most brilliant touch of the iBeacon rollout: over 200 million iOS devices are already iBeacon enabled. As long as they're running iOS 7, devices as old as the iPhone 4S and the third generation iPad can be configured to send and receive data wirelessly with iBeacon. Essentially, Apple has spent the last several years building a network of bluetooth enabled devices that could be lit up at any moment, effectively ensuring immediate dominance in the Location-Based Signal and Low Energy Bluetooth markets. By comparison, Google rolled out Near-Field-Communication (NFC) technologies on a limited segment of Android devices. Such a forward-thinking plan illustrates both the immense value of Apple's large and loyal following of iOS users and the advantages of its dual role as a hardware and software provider.

A New In-Store Experience

Though the flagship iBeacon stores are limiting in-store communication to informational messaging, it's not hard to imagine the major opportunities that iBeacon technology creates for retail. Retailers will be able send new visitors a store map as they enter, recommend nearby products based on past purchase history, reward repeat visitors with highly-targeted discount coupons, and alert shoppers if they're walking by an item on sale. By linking devices to credit cards or mobile payment services, shoppers may even be able to purchase an item without visiting a register. [caption id="attachment_1100" align="alignnone" width="575"]

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Audience

A recent survey conducted by mobile marketing firm Swirl Network indicated that consumers are ready for the next wave of mobile retail messaging. 67% of those surveyed are already receiving mobile alerts from retailers and 77% said they would happily share location data in exchange for something valuable. 62% of survey respondents said they would increase their use of mobile shopping apps if retailers could provide them with information more specific to their location and interests.

Retail and Beyond

Even beyond traditional retail, the possibilities for iBeacon are endless. Imagine your barista beginning your favorite drink as soon as you enter a coffee shop, or a concert poster that lets you seamlessly buy tickets as you walk by, or a sculpture garden that sends you specific information about a nearby work of art. iBeacon technology has the potential to simplify and enrich our lives by providing an eloquent, intricate tie between the digital and physical worlds, eliminating the scanners and tedious user effort required to activate iBeacon's thematic predecessor, the QR code.But retailers beware: just because you can endlessly message in-store shoppers does not mean you should. 41% of mobile users surveyed by Swirl Network said that they will reject shopping alerts that they find irrelevant. Retailers using iBeacon technology must ensure that content transmitted is highly-targeted, relevant, valuable, and entertaining. If trigger-happy retailers inundate shoppers with a barrage of dull, useless messaging, shoppers will tune out and iBeacon's potential to revolutionize retail will be thwarted before it can begin.