Beacons Set To Tie Online And Offline Closer Together

By Rory Betteridge | 16 Oct 2014

Retailers are starting to wake up to the potential offered by microlocation technology, with stores adopting beacons to integrate online channels into the in-store customer experience.

Beacons. Wondrous little things.

While the technology has been relatively slow to catch on, bricks-and-mortar stores are beginning to find ways to integrate microlocation functionality offered by beacons in exciting ways, from pushing new forms of promotional material to integration with a store’s online channel. As the technology becomes more commonplace, and as hardware improvements come with successive smartphone models, retailers will find more and more uses for the new technology.

Below are just a few examples of stores that have experimented with, or are soon to adopt, microlocation technology.


Apple themselves have of course used the new technology in their own stores for a while, with all 254 US Apple Stores employing iBeacons to interact directly with their customers’ Apple devices. A single store uses any number of iBeacon hardware nodes, located at strategic locations such as the front entrance, different product ranges, or the checkout.

Back in December CMO called the move Apple’s ‘large-scale entrance into the emerging known-location or place-based marketing field’, and has since launched a number of startups looking to use the technology to offer an unparalleled potential for data collection, marketing, and customer experience improvement; the practical upshot of which is the better standing from which bricks-and-mortar stores can compete with the likes of e-commerce giants such as Amazon in the field of customer knowledge and targeting.

Apple Stores’ iBeacon functionality is activated through the Apple Store app installed on iOS devices, and requires the activation of Bluetooth. Users also have to grant the app permission to enable iBeacon. Once these steps are taken care of, the iBeacon nodes throughout the store will begin to push different types of notifications throughout the store; information about nearby products, notifications if an ordered product was ready to pick up, and other marketing or informative purposes.

Apple hopes that the technology can usher in a revolution for services outside commercial stores, saying in a statement that the technology had the potential to give third parties ‘a whole new level of micro-location awareness, such as trail markers in a park, exhibits in a museum, or product displays in stores’.

Ten months on, people are starting to realise the potential of iBeacon technology.

Chatswood Chase

CMO reports that Sydney retail mall Chatswood Chase has wrapped up a pilot program for property-wide integration of iBeacon, finding that geolocation technology has paved the way for real-time targeted communication and greater access to customer data.

The property, owned by Colonial First State, attracts 12.1 million visitors every year, but to date hasn’t had the ability to track customers’ movements or activities while onsite. Chatswood Chase’s Marketing Manager, Emma Giammarco, told the ADMA Global Forum that increased local competition and a desire to examine and improve customer interaction with brands pushed the property to invest in geolocation.

“We know brands who are early adopters of new technology have considerably more engaged customers than brands who are not,” Giammarco told the forum. “Our main goal is to drive traffic and sales for our retailers. We want to use data to drive customers and retailers while connecting with customers in a way they want and that provides competitive advantage.”

iBeacon, Chatswood Chase’s platform of choice, allows the mall to collect data on customer movement around the property, which lets planners examine visitor flow, help form strategies for driving traffic to underperforming areas, and use cross-platform app Passbook to push specials and offers to customers in their 100-person trial.

The Chatswood Chase pilot revealed some interesting statistics: 91 percent of customers were happy to be a part of the mobile trial, and 77 percent were happy with the activation process, despite 68 percent having never used Passbook before.

Chatswood Chase is expanding their use of iBeacons in the coming months, including rolling out the system for Android devices, offering retailer-specific targeted messages, and targeting specific demographics such as age groups, based on data collected from users.

Loads of beacons

Localz has conducted a comparison of competing manufacturers’ iBeacon-ready devices. Image: Localz

John Lewis

Just last month, Melbourne based microlocation startup Localz commenced a research and development agreement with UK retailer John Lewis after winning a JLAB incubator investment to the tune of £100,000 (over $180,000).

Part of their winning proposal was to introduce enhanced services to customers’ smartphones through iBeacon technology, from triggering the fast-tracking of Click & Collect orders as a customer walks into the store, to guiding the customer around different departments according to a digital wish list.

Development of the technology will continue at Localz’ new London facility, with integration into John Lews stores around the city expected to follow. You can read more about Localz’ winning bid here.


Customers haven’t unanimously welcomed the technology, however. A New York trial of beacons placed in 500 pay phone booths throughout Manhattan was shut down by the Mayor’s office after it was found exactly how much data was being harvested from citizens.

The firm that operated the beacons, advertising group Titan, claimed that while the system could be used to push marketing material to passers-by, all it was being used for at the time was maintenance notifications and updates. The beacons were installed in pay phones with no fanfare at all, as Titan made no public announcement of the installations.

“The owner would, in theory at least, have also had to “opt-in” to the service when installing said app — although such permission might just look like the familiar, innocuous-sounding ‘[This app] would like to send you notifications,’” reported The Intercept’s Cora Currier last week.

Once it was enabled, however, the beacons would collect a wide array of data from the device, from browser histories, installed apps, to the frequency and duration of app usage, which it would then use to guesstimate the user’s age, gender, ethnicity, income, interests and where you would spend your time. While the New York activity was shut down, Titan has confirmed that beacons are still operating in other cities; Titan refused to say which ones.

“Stores have been experimenting with methods of tracking customer behaviour via their cellphones’ Bluetooth and Wi-Fi connections, but bringing the kind of shopper surveillance that is common online to the physical world seems to bother people,” wrote Currier, citing other instances of beacon activity being discontinued.

While the level of interaction with customers that micro location technology offers may be exciting for retailers, it’s important to remember not to move too quickly; Titan’s example serves as a reminder that trying to leverage the new technology for publicly undesirable means can very well backfire, especially with regard to fields in which regulation is lagging behind innovation.

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