Technology iBeacon as an innovation in retail!?

The iBeacon technology is undoubtedly interesting and in this article I want to tell you about our little experience of its use for retail companies, including possible prospects. I will emphasize that there will be no technical details in the article, quite the contrary - I will try to focus on how this technology can actually be used in the b2c segment (all that implies selling consumer goods to the final consumer in stores). Often I go to meetings with heads of marketing departments of medium and large retail companies, I see an interest that, let's say, is not yet formalized, but what kind of iBeacon “beast” and what can it eat for retail? If you deal with technology at the "everyday level", you can open a lot of interesting things for the company. Let's say this - this technology is not some kind of colossal strategic breakthrough for the b2c segment, although I often see Western publications trying to pass the wishful thinking (especially from the manufacturers of iBeacon beacons themselves). But not to pay attention to this innovation, in my opinion, would be imprudent.


So, what is iBeacon technology? Simply put, this is support for Apple iOS and Google Android operating systems (and soon Microsoft Windows Phone) at the level of mobile applications receiving Bluetooth signal from beacons. In other words, if you try to tell about the technology even easier - there are small beacons (the size of a box of matches) that are completely autonomous (battery powered) and they send information about themselves via the Bluetooth protocol (some unique identifier). And if the person with the phone on which the company's mobile application is installed enters the beacon's coverage area (let's say, let's say, up to 10 meters), then the application is activated and can execute a code fragment. I am sure that technical specialists can grimace after reading what was written, but, as noted, I try to use terms that marketers and business leaders perceive, since ultimately it is they who make the decision. I emphasize that the beacon does not require leading wires to it, it is made in a plastic case and can be put or attached to an adhesive tape near the entrance or inside the store.
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In general, the term iBeacon is a trademark registered by Apple and covers, as mentioned, a whole ecosystem of products (software, hardware, etc.). In fact, Apple describes iBeacon as “a new technology that extends location services in iOS” and how this technology should be used with the company's devices. Therefore, if you use very precise terms in the article, you should say “Beacon technology”, but let me continue to use the term iBeacon, all the more so based on our experience 80% or more people who install business applications (in our case retail networks) own exactly Apple devices.


Appearance of the ibeacon beacon - this model works autonomously for a little less than a year. The photo was taken during the beacon test in the mall for oodji clothing stores

Let me repeat again, just a little bit different. Imagine that your retail company has developed its mobile applications. You have a chain of stores and a website on the Internet. My experience says that the company develops the first versions of applications as a kind of simplified analogue of the site, hoping to show the addresses of stores, its news and promotions, the catalog of goods and to expect orders from customers. It all works and is pretty good, but if the company has a developed chain of stores, then its emphasis will most likely be placed on offline (regular stores) first of all, since the main money is earned there (I understand that there are exceptions, I write everything exclusively from the experience of dialogues in companies, with the number of stores from 20-30 and more). And here there is a desire for the company to bring online (online) and offline sales channels as close as possible. Why? The answer is simple - mobile devices (smartphones) are being sold more and more, it is impossible not to notice, and the company was able to get on the screens of some customers (I will call them loyal) with the help of their mobile applications. And yet these people walk, including near the shops! And go inside! And here iBeacon technology can add a “cherry” to the final “cake” in the form of mobile applications: if a company buys a beacon and places it near the store entrance, the application can show a push notification when a person gets into the signal area from the beacon ( 10 meters). Once again, I ask you to forgive me - I intentionally greatly simplify and in the article I will cite more complex scenarios, but all of our customers who have paid for the implementation start with this.


An example of a test push at the entrance to the ibeacon beacon. Option for testing, an error was made in the text (omitted "%" after 10).

A little about the iBeacon beacon itself. As already said, this is a small, completely autonomous device that is placed either at the entrance to the store, or inside the latter. The beacon itself is battery operated, the service life depends on its modification; Those models that we buy - work for a little less than a year, although you can order the option of a beacon with a capacity of up to three years. Then either change the battery or beacon. How is it located? Well, for example, just to double-sided tape over the entrance to the store, or behind the display shelf, if necessary inside the store. We ordered options for street performance, the difference is only in the case. Why make a street version? At least not everyone has retail outlets only in shopping centers, and a street beacon can be used for restaurants, cafes, etc. Such a performance will protect the “stuffing” of the beacon from the external environment.


Two versions of beacons - black for indoor installation, gray (they are more) - on the street

I, for the sake of interest, disassembled one street beacon. I saw nothing interesting and collected it back. It can be seen that it is filled with foam, but it is not for sealing, just in this way the developer decided to fix the electronics inside the case. There is nothing more to tell about the beacon. Many at meetings clarify, but what does the beacon itself store and how does it process information? Does not store and does not process in any way. He just regularly sends around his number (identifier) ​​via Bluetooth and that's it. We usually ask you to customize the beacons to send information 3 times per second - we empirically found out that this is the optimal amount for our customers. Those. 3 times a second, a certain number flies on the air and nothing more. All the logic of further processing is on the side of the company's mobile application.

Where can I place beacons and how many need them? It all depends on the specific situation. If you have a small store in a shopping center or with an entrance from the street, then just one beacon above the entrance. If the store is large, you can place beacons inside the store, for example, in different departments. You can buy beacons from different manufacturers and on Habré there was an interesting article on this topic (look for the word iBeacon - the guys did a lot of work on systematization). For ourselves, we stopped at a very small company of children from Korolev, who learned how to assemble beacons in small batches on their own from ready-made components and customize them for our needs. The cost for us is a beacon for indoor installation (the black case in the photos above) is about 1,300 rubles a piece, and for a street installation it is about 1,800 rubles. (these are prices excluding delivery charges). If we are asked to introduce this technology by the client, then we simply resell it to the client at the price of the purchase, earning only on development. Naturally, the company can buy independently beacons from other manufacturers.

Now, perhaps the most interesting thing is: what can be done with the help of this technology? How will this benefit the retailer? First - the company must have its own mobile applications. This can be challenged, but let me stay at my own opinion - the logic of information processing, a little more complicated than just sending a push notification, can be implemented only in the company's personal applications. The ideal situation is when the mobile application (and its server part) is integrated with the cash register system, which will allow you to implement interesting loyalty programs. But this, I confess, is rare projects and long in implementation, since they affect the third party - the company responsible for the cash system, although it carries the maximum prospects.

The simplest scenario (I will name it number 1) is a person with an installed application, passes near the entrance to the store (for example, in a shopping center) and receives a push notification on his phone. This is up to 90 letters of text that are displayed on the screen, even if the phone is in sleep mode. Let me emphasize - even if the person does not work with the phone (in his pocket) and the company’s application is not running (and can be “thrown out” from the phone’s memory altogether), a push notification will come. The text is common to all passing by and works as a kind of "bait" for a potential buyer. The script, as he said, is simple and you can start with it. Of course, it is completely easy to count how many people received this notification and launched (opened) the application. You can send information about a new collection, sale, or simply notify you that there is a discount if you submit an application at the checkout. I note that you can send two notifications - when entering the beacon area and exit (these are different events). I really think it will be a bust :)

If you digress a little, I’ll tell you about the interesting intention of one of our large clients who ordered beacons for outdoor (street) performance. The idea was to place them at the exit of the nearest metro station to the store. And send push notifications to those who, among the general dense stream of people, have an installed brand application. I do not dare to comment on the idea, although, as it seems to me, it can also harm (you can not send a push, but only collect analytics, see below).

Slightly more complex scenario (No. 2) - the company sends a push notification and counts. It counts not only how many users received it, but more complex data collection is realized: how many people went into the store (or stores where there are beacons) and how much time they spent there. This is possible because You can fix both the entrance to the zone of the beacon and the exit from it. I note that the beacon, for the implementation of scenario No. 2, must be installed not at the entrance, but inside the store. Otherwise there may be high errors in the calculation. If the beacons are in all the stores of the chain, then there is an opportunity, including collecting data, in which stores a person went before and how much time he spent in each of the selected dates. Visitor counting systems at entrances are far from innovative technologies, but the voiced scenario does not consider a “circuit”, but a specific ( unique) visitor (phone owner), which distinguishes, in my opinion, the iBeacon technology. And it opens up interesting opportunities that I have covered in the scenarios below.

Scenario number 3 will allow to expand the previous one by the analysis of the so-called. "Heat map", when you can put the most dense location of visitors to the store on his floor plan. For implementation, you will need to install several beacons in the store itself, and this scenario is applicable for more or less large objects, say from 800 m2. I emphasize that at the same time all the possibilities of the previous 2 scenarios remain: sending a push notification and collecting data on visits, along with the time spent. Obviously, it makes sense to install beacons in shop windows, in the aisles.

I digress and ask a rhetorical question - we did not think that there was a certain injustice in that the owners of online stores received a lot of detailed analytics on site visitors, allowing them to more accurately respond to the situation. At the same time, the network retailer gets its main income offline, and here the understandable difficulties appear in the question of advanced analytics. Imagine a system similar to Google Analytics for offline! I think that many companies would be interested. What does this say? Technology iBeacon allows you to fill this gap and give marketers interesting information about customers, up to a real time scale.

We will continue to look at the scenarios, but for scenario No. 4 we definitely need to get data on sales in stores from a retail company. Moreover, it is not so easy to get it, but it is extremely desirable with reference to the number of the discount card (DC). In a mobile application, it is easy enough to transfer a discount card (if the card has a bar code, then through the application this code is scanned and then reproduced on the screen, which will allow the card code to be read at the checkout directly from the phone). As a result, we have the opportunity to link the purchases made offline and the customer who installed the application by the DK number. What does this give us? This is where the most interesting horizons offered by iBeacon technology are opened. When a person comes to the store of a company, we already know what he bought earlier and in which stores. You can send a message to the seller, containing information about the buyer and his online shopping profile and, much more interestingly, offline, by adding product recommendations immediately! You can also send product recommendations to the visitor himself - new items, related products, etc. Not so difficult in a mobile application to ask for a name, age range. Or use authorization through social networks, receiving from them advanced social characteristics of a person. In fact, in scenario No. 4, the company receives a wide range of possibilities, from simply sending push notifications, to collecting analytics on store visits and personal product recommendations. How fantastic is this scenario? Do not think for advertising, but this is the scenario we have to implement (as an experiment) in one of the networks of women's clothing by the end of the year. The company in each store will have tablets from sellers (the simplest ones based on Google Android) and you will need to send visitor information immediately with product recommendations to these tablets.

Finishing the article, I will tell about some limitations of the iBeacon technology. The first limitation is that Bluetooth should be enabled on the mobile device. I have met unconfirmed information that about 25% (in Russia) of owners have this option enabled, since they use wearable gadgets, listen to music in the car on the speakerphone, or use a headset. I can assume that with the release of Apple Watch and the development of the “Internet of wearable things” in general, this percentage will only grow. The second limitation relates directly to how Apple iOS handles push notifications if a person enters the beacon with a phone. When the phone is in sleep mode (black screen), the first push notification will come without delay, but subsequent ones may arrive with a delay of up to 15 minutes. It can be assumed that this is done to reduce the risk of irritating the owner of the phone, who may simply be near the beacon. By the way, I mentioned earlier in the article a beacon radius of 10 meters, but this is a configurable parameter, which can vary from 15-20 centimeters to 25-40 meters (yes, the author personally participated in the experiment and the range of 30 meters was working).

ps I can not fail to note one important point - I do not undertake to consider the above scenarios from the point of view of human morality and ethics in terms of collecting and analyzing personalized data. I am quite clearly aware that some scenarios can be viewed through the prism of an invasion of a person’s “personal space” when we gradually collect data about him. From another point of view, reasonable product recommendations can reduce the most valuable thing a person has - time spent on shopping trips in search of the right thing. In the case of iBeacon, it is impossible, if you allow, to “overdo it” with communications, since otherwise, the visitor will be rejected to the brand.

pps The life of our company can be monitored in a more “live” mode via twitter or through my facebook account. Our interest in iBeacon technology is motivated by the fact that while developing mobile applications for retail, we simply have to constantly look for sources of innovation. The history of the launch from scratch of our company can be viewed in the first publication.