Will iBeacons disrupt the in-store experience?

iOS7 ibeacons

YOU’VE probably heard the buzz around iBeacons by now. Apple has created an alluring technology that they have installed in their own stores, and there are numerous global trials by other brands to digitise the in-store shopping experience. To familiarise yourself with iBeacons read this good summary at ZDNet.

In answer to the burning question “Will iBeacons disrupt the in-store experience?”, I predict they will not.

If the question was reframed as “Will iBeacons enhance the in-store experience?”, then I would say absolutely yes.

Let’s look at some reasons why I think they’re more an enhancer than a disruptor.

There is no doubt that smartphones are now ubiquitous, with 75% of the Australian population owning one (source: The 2014 Telstra Smartphone and Tablet Index). A recent survey by Adobe found that iBeacons and geo-targeting are experiencing strong popularity:

  • 18% of mobile marketers already use iBeacons and the number is expected to double in 2015
  • 33% of mobile users take advantage of mobile assisted in-store shopping.

All good so far…however we should not confuse smartphone usage with disruptive behaviour by consumers. It pays to consider the context of a visit to a shop.

Prior to going shopping, many customers go online to research their purchase, especially in the consumer electronics and home improvement categories (refer this Accenture US study). In this phase, shoppers will usually see information about a sale or new items, watch a product video or be offered a deal if they subscribe to an e-newsletter or join a loyalty club.

Stores do a pretty good job of using point-of-sale (POS) to alert customers to key messages like sales and new ranges. Usually these signs are positioned at the front of the store where every customer will see the message, potentially before an iBeacon can detect the customer’s phone and send a notification.

To benefit from iBeacons, the customer must have downloaded the store’s mobile app and have Bluetooth turned on. Both steps are barriers to use, since there needs to be a compelling reason to have the store app on your phone beyond the iBeacon functionality, PLUS keeping Bluetooth on all the time can be a drain on your phone battery. Not to mention the security concerns some people have of always being connected via their smartphone.

Another potential hurdle for this technology to be truly disruptive is consumer fatigue with smartphone apps and/or their notifications. The more apps people have, the more likely they are to either switch off all but the most important notifications. It’s too easy to simply ignore those that pop up unexpectantly.

An iBeacon has two core functions – notify when in proximity, and enabling payments at POS.  My opinion is that the latter will be the more practical and popular function.

I do however think that they are more likely to be popular at other venues such as events (concerts, exhibitions, etc.), accommodation providers, bars and restaurants, theme parks, cinemas, and other places where proximity is important but personalised service is not so important in the context of the reason a consumer is in the vicinity.

Some practical opportunities for iBeacons at these venues:

  • At a concert the iBeacon notifies ‘members’ who have the venue/act app that exclusive signed merchandise is for sale at a special location after the show
  • Walking through the hotel lobby early in the morning, your hotel app receives a notice that there is a special ‘happy hour’ at the bar tonight and this is your VIP pass to bring a friend
  • A family day at a theme park, where the park’s app has helped plan a path to see all major attractions. At designated spots the iBeacon sends a message, earning points that can be redeemed as a future entry ticket.

beacon_teaser1The opportunity for iBeacons’s to enhance the customer experience are of course limitless. The most important aspect is that they are seen to add value to the relationship, not simply another channel by which marketers push a sales message. That will quickly lead to consumer lethargy about the technology.

What do you think? Will iBeacons shine in stores, or find a stronger purpose outside the shopping mall?


2 thoughts on “Will iBeacons disrupt the in-store experience?

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