What retailers need to know about iBeacon

With approximately 1.5 billion smartphones currently in use today, it is safe to say mobile is radically changing consumer retail behavior. To maximize in-store sales opportunities and minimize hurdles to purchase, retailers must change their approach to reach a new generation of customers steeped in a mobile lifestyle.



But how should retailers best interact with their customers in this new age of mobile? A new innovation from Apple could be one answer: iBeacon.



Released as part of Apples’ iOS 7 launch last year, iBeacon is a positioning system that takes advantage of Bluetooth Low Energy transmitters or beacons (also known as Bluetooth Smart) to enable an iOS device or other hardware to send notifications to iOS devices nearby. By implementing inexpensive beacons (currently selling at three for $99), retailers gain access to a low-maintenance option to provide information directly to a customer’s mobile device, assisting the shopping experience while driving them toward a purchase.



For example, customers who enter a specific store can be greeted with a special offer for being a loyal shopper, or receive a targeted messaging based on their location near a product. Retailers could also provide store maps to a customer’s mobile device, guiding them through the store to products of interest. Or offer discounts on purchases made in-store. The possibilities are endless. Once you understand where your customer is, you can trigger any digital experience for them.



iBeacon and technologies like it can help bridge the gap between a consumer’s mobile and real-world experiences. Today’s in-store customers are often researching prices, product information and comparison shopping on their mobile devices. But what kind of benefits could result if a retailer communicates with a customer via their mobile device while they are shopping? Instead of customers comparing prices on their mobile devices, shoppers would be intrigued by unique, in-store only offers they receive from the retailer.



By leveraging iBeacon, retailers could combat the problem of “showrooming” where customers visit a store to view merchandise but make a purchase from a competitive online retailer — a frequent activity of mobile-equipped shoppers.



Down the road, iBeacon could enable mobile payments at the point of sale (POS) where customers don’t need to remove their wallet or card to make a payment. Apple is positioning itself to be able to deliver a mobile payment experience. It’s not there yet and there are host of complex issues to contend with, but the possibility is real.



It’s important to note that iBeacon is not the only technology solution that enables “proximity marketing.” Other companies like Estimote, Stick N’ Find, and Qualcomm’s Gimble are essentially all competing within the same space: to reach the mobile shopper.



There have been other efforts to better align digital experiences to a physical experience, with bar codes providing product info, augmented reality apps bringing physical products to life, and even valiant efforts from retailers such as Walmart with ‘in-store mode’ mobile apps. All these solutions help to make a shopper’s digital experience match the one they’re having physically. However, beacons do this cheaper, more effectively, and to a far greater degree of accuracy than any other mass-market solution.



How you use beacon technology to enhance your customer’s retail experience is something that will inevitably take months to perfect. If considering implementing your own iBeacon solution, it is important to test beacon location and gauge customer interaction with your tailored beacon experience. Start very small with a basic trial and proceed from there.



The best reason to get started is because your competitors likely will enter the arena soon as well, if they haven’t already. While still in its infancy, the technology’s potential benefits are too great and will eventually become a part of the retail experience. Retailers who perfect the ability to create a seamless purchasing journey for their in-store customers, engaging and interacting with them throughout their shopping experience, should reap the rewards in the years to come.

Joel Blackmore is senior innovations manager at Somo, the world’s largest full-service mobile solutions company.