What is Beacon Technology?

Beacons have been generating buzz since 2013, when Apple first introduced iBeacon Technology. And while it may have appeared for a time that this new way of connecting with customers might be slow to catch on, today it’s catching fire. According to a report, Beacons would be driving $44 Billion in retail sales by 2016. While there’s been a lot of hype around Beacons, they haven’t necessarily been very well understood.

Retail is probably the most often cited example of an industry employing Beacons, with heavy hitters like Lord and Taylor deploying them in their stores. Starwood Hotels is running a pilot program to replace hotel room keys with Beacons. Major league Baseball is using them to reach out to fans in stadiums to offer them seat upgrades. American Airlines is one of a growing number of airlines leveraging Beacon technology to improve connections with customers in airports.

Apple explains iBeacon Technology to consumers as the enabling technology for Apple devices to alert apps or websites when someone approaches or leaves a location. In other words, retail or other venues that have Beacons in place can detect where a customer is at any given moment. This is the key part as the retailer or other business can push timely messages to that customer promoting products or providing other useful information.

Say someone is walking past a retail store, if they’ve downloaded the retailer’s mobile app, the company can use Beacon messages to capture their attention as they go by, enticing them to enter. Once inside, Beacons can be used to make personalized offers, speed checkout processes and pretty much anything else the retailer can dream up.

Apple doesn’t actually make Beacons, it has developed iBeacon standard around which Beacons can be built. Google has its own Beacon standard, Eddystone. There are a number of players in the Beacon manufacturing space – not only Kontakt, but also BlueSense, Gelo, Estimote and others.

Beacons employs Bluetooth low energy (BLE) wireless technology to pinpoint the location of customers in stores and other places and to deliver messages to their mobile devices. Specifically, a Beacon emits a BLE signal that a retailer’s or other company’s app on a smartphone coming within range of that signal can pick up on. A big differentiator between Beacons and RFID is that Beacons are far more private because it gives users control of the apps that leverage the Beacon. Beacons are authenticated and with user permission, which can ultimately lead to tremendous experience as a result.

Beacon will overcome the major hurdle for companies that want to engage with customers in a more personalized way.