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Beacon Technology: An Unexpected Return from the Past

Dawid Pacholczyk 3622ceab56

05/07/2022 |

10 min read

Dawid Pacholczyk

"Beacon" is Apple's term for a Bluetooth Low Energy system in which tiny transmitters and receivers communicate with each other and nearby smartphones. After a sluggish start following its introduction in 2013, the adoption of iBeacon technology is snowballing. Let's discuss why.

Technology is continuously evolving, and new user-friendly systems are constantly being developed. Think of IoT, which is driving numerous changes beyond AI and machine learning; by connecting the physical and digital worlds, it creates a unique ecosystem that enables devices to interact independently.

One such innovation is the iBeacon, a novel technology – at least in 2013 – that was perfect for supporting on-site sales by providing personalized discounts, real-time offers, and even directions within the store/event, in addition to real-time tracking of consumers' movements (and thus, behavior). It was adopted mainly for improving the in-store conversions in both major retailers' branches and brick-and-mortar stores.

Nonetheless, as the invention of the beacon device isn’t new, it has recently attracted the attention of many, especially in the marketing landscape. But before we discuss "why," let's simply start with "how": how did it work?


Table of contents:

  1. What exactly is beacon technology?
  2. How do the beacons work?
  3. Beacon technology for businesses: use cases
  4. Why did businesses decide to start using beacon technology (right now)?
  5. Beacon technology: conclusion

What is beacon technology?

Beacons are Internet of Things (IoT) devices. They combine proximity technology and Bluetooth/other technologies to detect nearby human activity or mobile devices. Then, they trigger preprogrammed actions to deliver informative, contextual, and personalized experiences. At the same time, beacons can gather data essential to the business such as consumer insights, store visit count and time, preferences; but also temperature or number of items in the stock. In fact, they can measure almost anything that can be detected with a sensor.

Beacon devices are compact, wireless, battery-powered computers. They are used to monitor chosen factors/actions. Hence, beacon signals when their sensors detect the programmed action or its anomaly (being able to detect and measure, i.e., motion, temperature change, no. of items in the storage, dust level, humidity). Because of that, they are typically attached to walls/ceilings or hidden in other objects, with an estimated signal range of up to around 40-70 meters. They could be as small as a sticker or as big as a wi-fi router.

To sum up, keep in mind, that beacon can be activated via a trigger, which instructs it to carry out its predetermined response. The information (such as audio, video, or text) or contextual data delivered can be personalized by user input, time of day, distance to the target, or even for a specific holiday or sale.

In fact, there is no limit to how beacons can be used.

How do the beacons work?

Beacon technology makes location-based marketing and interaction easier and more accurate, enabling you to, for example, send a push notification about a special offer to customers passing by the store's entrance; or even send a coupon related to the selected offer in real-time (i.e. within the new sportswear collection, for a new menu). They're also used in sports arenas, airports, and trade shows to improve navigation. And thanks to the use of BLE technology, a running app does not require to be awakened by the beacon signal.

Beacons can also unlock hotel doors. They are essential in many industries, i.e. notifying the shift manager if a room's temperature (or other monitored factors) has significantly increased or decreased, indicating that the commodity is about to spoil. Alternatively, they may warn museum personnel of an alarming level of sun exposure/humidity in an exhibition hall. Using IoT, they could send the alert to the maintenance team's preferred device, allowing them to resolve the issue faster.

What’s crucial here is that any beacon you install has to be able to communicate with something. This depends on what kind of beacon we have, which could be either:

  • Installed – which is limited to its signal rage. A beacon usually covers a certain area (i.e. a room, a store) and can connect with mobile devices that are in its proximity.
  • Wearable – think of them as remote Wi-Fi hotspots that you can use at any time to access beacon-driven activities (and transfer the data as you run your errands). You can include parent beacon (able to track other beacons) and lightweight beacon stickers here.

So, if you have a smartphone, you probably have a beacon signal receiver in your pocket (or very close by) right now. As a result, if you walk by an area with an indoor positioning system, a built-in beacon may communicate with your device by sending a coded message (via standard push notifications).

This started to raise concerns, as many worried that their devices might be accessed via multiple devices a day without their knowledge. 

Mind your privacy: an issue with smartphones 

A mobile device should not be able to pick up signals sent by a beacon unless it has a special app installed (such as an iBeacon app or an Eddystone app) and has been granted permission by the user. If you have such an app, you can always change the level of interaction (or opt-out) by editing the notification settings. You can also turn off your phone's Bluetooth, but keep in mind that it can still use detailed location data such as GPS, GSM, Wi-Fi, and NFC.

Beacon technology for businesses: use cases

Beacons are used by businesses to track the exact location, status, and contents of objects. 

Supply chain: beacons vs RFID tags

While both technologies can be used in retail, manufacturing, and logistics for real-time tracking of product movement throughout the supply chain, Bluetooth beacons are more accurate and efficient than RFID tags. Beacons use less power while operating for longer periods on a single battery, which is critical for businesses that require constant supervision. They are also less expensive (and do not require a scanner), more precise, and can send out push notifications if they detect any anomalies, allowing potential issues to be identified before they become costly problems.

Proximity marketing: beacon advertising

Personalized offers are critical in conveying a client's desire to return for more. The more tailored the offer is to the current need, the greater the likelihood of making a purchase. Now, think that we can adjust it the same way in real-time for the in-store customers, while they browse through our products. Beacon marketing works great for the retail industry, combining advanced personalization with customer engagement. It can improve the in-store experience by, i.e: sending targeted coupons based on the client's geo-patterns within the shop's products, providing relevant real-time information about the selected item, or even sending a welcome/welcome back message to customers entering the store. As a result, beacon marketing campaigns allow for more interactive, frictionless, and personalized experiences for consumers.

Banking: real-time feedback collection

Beacons enable branches to communicate with their clients in real time through the banking app. The clients can, for example, determine the purpose of their visit while waiting in line, so they can be directed to the appropriate consultant (or learn the estimated waiting time). After the consultation, they can survey the branch work and receive a tailored offer (and targeted ads) based on their current financial situation. Banks can then compare branch effectiveness by monitoring customer analytics (satisfaction level, habits, and current needs) and comparing them to the banking team's response.

Healthcare: better navigation within the medical facility

Beacons are frequently used in large public spaces like hospitals, airports, shopping malls, and stadiums. They typically communicate with third-party technology to accurately pinpoint and track a person's location indoors and provide users with indoor navigation with an accuracy of up to one meter—which may save some time for public workers, who, according to some, spend up to 4,500 hours yearly on showing patients around. With a beacon network, any owner of a large complex venue can understand how users behave indoors, allowing them to plan the space for a better and safer experience.

Autonomous vehicles: more precise routes

Autonomous vehicles can utilize beacons to navigate warehouse locations. Each beacon would represent a particular aisle or section, guiding the vehicle through what would otherwise be a maze.

Why did businesses decide to start using beacon technology (right now)?

As with other innovations of the early 21st century, beacon technology was somewhat ahead of its time. Although smartphones were already popular, Wi-Fi hotspots were a thing, and people, in general, were becoming more immersed in social media, the market required a bit more maturation.

Everything has changed as a result of modern society's reliance on mobile devices. Smartphones have replaced other devices as our primary method of operation because they can now be used for any activity (socializing, entertainment, budgeting, providing food, etc.). We want to remain in contact at all times, so we carry our phones with us everywhere - and because of our fear of missing out – they are always connected to the Internet. As a result, consumers no longer leaf through fliers looking for coupons and sales. They now prefer to receive information digitally. Within seconds of their request being made.

Since the epidemic, many people have had no choice but to replace even more activities with apps, leading to an unfortunate increase in our reliance on mobile devices. And we are more eager than ever before to download any app (even, if we need it just for a few minutes).

This was a significant step toward widespread adoption, which necessitates widespread access to Internet-enabled personal devices, a willingness to download multiple dedicated apps (allowing the beacons to transmit data to phones), and the skills/habits required to interact with content provided by the Bluetooth technology device.

This is also the era in which we now find ourselves. As a result, your company must use every available method to get that information to consumers in their preferred format. And with the privacy of their data in mind, too. 

Beacon technology: conclusion

Beacon technology has gained traction in the tech world since Apple introduced its Bluetooth iBeacon devices (2013) and Google followed with Eddystone (2015). Experts predict that the IoT will continue to grow, with the estimated value of the beacon technology market exceeding $25 billion by 2024.

Beacon technology is a valuable tool for businesses of all sizes, allowing them to connect with and better understand their customers, monitor various environmental factors that may affect production, and track even the smallest item within the supply chain with pinpoint accuracy. Beacon advertising is already being used to tailor future marketing campaigns, which heavily rely on improving customer journeys by providing valuable information to customers based on their current location, a pattern of behavior, and frequency of store visits.

Furthermore, you don't have to spend a lot of money to integrate beacons into your business; all they need to function properly is the ability to send signals to any mobile device capable of connecting via a dedicated app.

If you'd like to discuss whether beacon technology is a good fit for your company, contact the Codete consulting team, who can help you make your vision a reality.

Rated: 5.0 / 1 opinions
Dawid Pacholczyk 3622ceab56

Dawid Pacholczyk

Consulting Manager at Codete with over 15 years of experience in the IT sector and a strong technical background. Seasoned in working with multinational companies. Ph.D. student and lecturer at Polish-Japanese Academy of IT, focused on software architecture, software development and management.

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