Who said that all modern inventions must be complicated to be effective? Simplicity is still the best way to attract the mass consumer segment, which, in most cases, is a guarantee of financial success. This was proven by Apple, who introduced their version of a beacon back in 2013. What is a beacon, and why is it important to modern businesses? Let’s find out!
Never heard of beacons before? Not a Problem!
A beacon is possibly one of the simplest devices in the whole Internet of Things industry, as it only consists of 3 parts – an energy source (commonly batteries), a CPU, and a transmitter. The beacons are incredibly tiny; in fact, they can be the size of a coin. You may also see a beacon designed as a USB drive, which starts working when you plug it in. This type is perfectly suitable for long-term use. Such beacons are better for the environment since they don’t require replacing batteries regularly.
How does a beacon operate? Well, based on its components, you might have already guessed that the whole process is rather simple. The beacon is a one-way transmitter, which starts sending signals to other devices using Bluetooth 4.0 once they enter its operating range. Every beacon has a unique ID, which is shared with the receiving device immediately upon connection. However, properly interpreting the meaning of that ID is impossible without dedicated software. We’ll talk about the technological side of beacons later in the article. Right now, let’s concentrate on the reasons for a wide spread of beacons. Are they really that popular, after all?
Simplicity is the key
Well, if beacons weren’t so widely spread, we probably wouldn’t discuss them. Consider the following numbers: by 2024, the whole beacon technology market is projected to grow over $24 billion in net worth. Quite an achievement for a radio transmitter, isn’t it? In addition, the technology is very young and has yet to prove that it can be applied in multiple industries. We don’t know what the best ways to use them are at this point, so it’s hard to predict where the market of beacons would go in the nearest years. What’s rather clear is that beacons shouldn’t be underestimated by marketers, as these simple devices contain great potential for boosting sales.
Technology behind a beacon
Every beacon on the market exists thanks to the Bluetooth 4.0 technology, as it was the first to allow for one-way signal transmission. Bluetooth Low Energy (or BLE) was the part of this technology that directly influenced the emergence of the beacon market. BLE was introduced back in 2009, while the first version of Bluetooth appeared in 1998.
A beacon is not designed to receive signals; the only thing it can do is send information to a receiver. An owner of the beacon can set a frequency with which it will be broadcasting signals at almost any number. It is generally suggested to set the advertising interval at 100ms, but a typical beacon is capable of transmitting signals up to 9 times slower (e.g. every 900ms). Obviously, the frequency directly affects a beacon’s battery. At 100ms, a standard beacon will probably last for around 2-3 months, while at 900ms, you can expect it to work for 2-3 years.
Beacons are notable due to their inability to receive information. While some people believe it to be a weakness, it is, in fact, what makes the technology stand out. First, to make the whole thing work, you don’t need to pair up your device with a beacon. Whenever you enter the beacon’s operating range, it starts working automatically. Users don’t need to perform any actions to trigger the beacon or somehow connect to it. Second, beacons can’t be used to trace the movement of people. This makes the whole process extremely transparent and protects users from being spied. Hackers can’t get any information out of a beacon since it can’t even save the data! To save information, you should be able to receive some, right? Fortunately, beacons lack this feature. Third, due to their simple construction, beacons consume very little energy. A single battery is enough to power a beacon for approximately 2 years, depending on the frequency of a transmitted signal.
Proper software matters
A beacon is capable of sending a signal to a receiver, but you won’t be able to read that signal without proper software. This is why the installation of beacons must come along with the release of a dedicated application. For instance, a shopping mall application can connect beacons to all clients who enter the store to provide them with coupons or show them different ads. All these features would be impossible without dedicated software, so make sure that you have a well-thought-out plan before installing beacons.
It’s worth noting that a beacon can’t save information in it, so all data about the actions and content that the beacon is programmed to trigger is stored in a cloud. Why choose cloud computing instead of just storing everything within an app? Beacon technology is all about saving space, so hardcoding all the information into the customer’s phone would not go well with this concept. The apps should be light so that the customers wouldn’t want to delete them if the need arises to free up some space on their smartphones.
Furthermore, due to the restrictions imposed by its construction, a beacon is not capable of transmitting things other than its ID, and the latter doesn’t change frequently. What changes, however, is content behind that ID. Saving all the information in a cloud allows you to adjust your content as much as you wish without the need to make any changes in the application itself. If you chose to store all the data within the app, running a new ad campaign will be a disaster since you would need to re-code the whole program.
Why install beacons?
There are quite a few ways beacons can benefit your business if you invest some creativity into the whole thing. In addition, the technology is constantly developing, so no one can predict how beacons would perform along with the introduction of 5G networks and the wide implementation of the Internet of Things. Anyway, here are some most popular reasons to install beacons:
- They help your marketing team evaluate advertisements and improve ad campaigns.
- Beacons are incredibly cheap to install and don’t require much effort to keep them working properly. A single device costs around $20-25 and provides a transmission range of approx. 500ft;
- Through signalizing about every visit to your physical shop, they provide you with a clear picture of the correlation between your online marketing efforts and in-store visits;
- A beacon is capable of triggering events on a user’s phone, so it can show ads or send push notifications whenever the client enters the store;
- Beacons can be used as indoor navigation tools, pointing the user in the right direction in spacious buildings like airports or train stations.
Beacon technology implementation in non-commercial purposes
To find out how to use these tiny tools, you don’t need to conduct any in-depth research. Just think about the last time you visited an airport. Wasn’t it difficult to find a registration desk, then your favorite shop, and finally, your gate? Beacons are great tools to ease navigation through such a large and complicated building. Consider the following example:
To help lost passengers get to their flights, the airport administration has installed multiple beacons and provided a dedicated application. The latter is available in many languages and can be downloaded by scanning QR codes, which are placed everywhere around the facility. So, upon downloading the application, everything a lost passenger needs to do is open it and let the beacons around him/her do the job. The app would connect to every beacon on the way towards the passenger’s gate to provide them with clear instructions on where to go. And don’t forget about the possibility to show some ads while the traveler will be passing different stores!
Using beacons to boost your sales
Who cares about the non-commercial ways to implement the technology when we can use it to sell stuff to people! Despite its small size and simple installation, a beacon is a really powerful tool when it comes to marketing. Just think of the following examples:
- See how customers move inside your store and use this information. Dedicated applications help business owners track the movement of individuals within the transmitters’ operating area. This data allows showing real-time ads and inform the buyers about ongoing promotions or sales. In addition, the beacons work to target advertisements more precisely by sending movement-related notifications to each client. For example, apparel discounts (as well as all other active sales and promotions) will be shown whenever the customer enters a respective section of the store.
- Indoor navigation provided for commercial purposes. Remember the example with the airport navigation system that uses beacons? Well, this technique is almost the same but aimed at boosting your sales. If you run a large department store, you may know that finding the right section may be rather complicated without proper assistance. With a beacon installed every few meters, your clients will receive precise instructions on where to search for goods they need in the store’s application.
- Beacon technology can persuade customers to consider purchases that they would otherwise miss. Imagine walking by a street café and receiving a notification about a 30% discount on all types of coffee. Isn’t that a pleasant experience? Absolutely! Such deals can stimulate buyers to purchase things that weren’t really interesting to them until they heard of the discount. The same idea works perfectly for apparel stores, especially those selling teams’ merchandise on large sports events. Whether match viewers were searching for that hoodie with a team’s logo on it or not, a 50% discount would persuade them to purchase one!
- Let your clients know about existing discounts and promos. Let’s assume that your store is currently offering a coupon with a decent discount for certain goods. Your frequent buyers, of course, know about the promo because they have an app installed and received notifications with the promo’s details. But how do you attract passersby’s attention? Using beacon technology, of course! Whenever a person would enter the area of a beacon’s reach, they would receive an instant message granting them a coupon you are currently advertising.
- Inform customers about events currently held in your store. Although this example may seem rather similar to the previous one, it is quite different in nature. In this case, we are not speaking about directly advertising stuff; the matters in question here are events like master-classes, public presentations, or any other types of activities that you can hold. While they don’t advertise goods directly, they may act as a way to attract more visitors to your store. And, as you may have already guessed, passersby can be informed about these events through beacons.
- According to the studies, 25% of people who receive targeted advertisements (with beacon technology being involved, of course) eventually buy the advertised product. If your app offers digital shopping lists, the whole thing may turn out to be even more profitable, as you can use smart ads to boost the sales of certain goods. You can link entrees from a client’s shopping list with notifications promoting the products they may be potentially interested in. This approach helps increase in-store conversion and motivates clients to purchase more goods from you.
- Beacon technology is a perfect base for building your loyalty programs. In addition to boosting sales and promoting goods, you can offer personalized discounts to your frequent buyers or advertise these loyalty programs to those who visit your store for the first time. For instance, a social media campaign, which grants every customer who posts a photo of a promoted product with a discount/coupon, is a great way to increase your brand awareness among locals. Such a strategy is made possible thanks to beacons, which will notify customers about the on-going promotion once they enter the store.
Differences Between Beacon Technology and GPS
After going through the advantages of beacons implementation, it’s important to point out what distinguishes it from similar technologies. People often confuse beacons and GPS, which are, in fact, completely different things. While GPS uses satellites to show your geographical position, the beacons connect to your phone using Bluetooth. This means that the beacons will successfully operate underground or inside a building, while GPS fails to do so.
Another popular technology that is often compared with beacons is NFC. However, it is a totally different thing, as NFC works only within 20 cm (roughly 7.87 inches) from a transmitter, while an average operating area of a beacon is significantly larger (around 500ft). In addition, NFC modules can be turned on and off, while beacons operate whenever their CPU is connected to a power source.
Overall, beacons are very beneficial to businesses, mostly due to their availability, huge potential, and multiple applications. They provide a way to design more efficient marketing campaigns by sending personalized offers to customers. Beacons don’t require specific technical knowledge to install and last many years on a single battery charge. So, it’s safe to assume that we will see the rapid growth of the beacon market in the nearest years.