iOS7’s iBeacons: turning content strategy into retail transactions

iOS7 apple iphone 2013 iphone 5SApple might just have quietly shaken up our expectations of the long-discussed internet of things. After the company’s September Keynote, a slow trickle of articles followed noting a feature barely addressed in Tim Cook’s presentation. It’s a technology that has been available in iPhones since the 4s and is, in fact, used in most leading handsets. In short: low energy Bluetooth that enables connectivity over a short range without draining power in your device.

Through a profile called iBeacons, this energy-efficient connectivity can be paired with cheap sensors that enable object-to-device interactions in environments like shops, concert halls and museums. Allied to a native mobile application, iBeacons usher in an opportunity for retailers to push content to shoppers’ devices and to facilitate indoor mapping – allowing, say, Topshop to take a customer on a personal stylist’s journey around the shelves from the comfort of their handset. With such immense potential to connect digital content with the physical world, iBeacons might just be the first brief for departing Burberry boss Angela Ahrendts, Apple’s new SVP for retail and online stores.

If there was any concern that tech commentators were over-reading the significance of iBeacons, Paypal’s recent launch of Beacon – their service that uses the same technology to allow users of the Paypal app to make payments via USB dongles plugged into retailers’ tills – should get our attention.

So what are the drawbacks? Well, it’s not NFC; which will frustrate those that have invested money and energy in that format. But, iBeacons operate in a much broader range (around 150 feet) and do away with the need to bring device and transmitter into close proximity. So they are better placed to steer shopper journeys over greater distances. Despite Paypal’s support though, there remain concerns over the transfer of sensitive financial data at this range. So, we can probably leave wallet-less payment on the NFC feature sheet.

None of this dampens our excitement about the implications of iBeacons for brands and retailers. At the heart of the opportunity, as we see it, is the chance to join up all the investment that the last few years have seen: connecting content strategy with the point-of-purchase to finally prove the effectiveness of all that social media investment, if you will.

We know that shoppers need to create mental alibies to justify purchases. Digital content can deliver these in the way that standard point-of-sale, or even most shop floor staff, cannot. Justifying an expensive jacket by exploring its design and production, for example, and showcasing a compelling production story can suddenly tip the value scales.

Upsell and cross-sell can be achieved with targeted content designed to unlock the purse strings. A supermarket could recommend a nice bottle of red to go with that steak picked up at the meat counter. A fashion retailer could feed-in what garments are trending on social media.

Crucially, retailers need to intercept showrooming behaviours – where in-store shoppers check prices and user reviews on their mobile. Price for the shopper isn’t simply a question of “am I paying too much?” For example, John Lewis’ “never knowingly undersold” promise could become a true price pledge for even the most savvy shoppers. User reviews could be delivered in a seamless manner to build confidence in purchase.

As we have talked about elsewhere, the expectation of mobile influence – not to be confused with m-commerce – is huge, with L2 ThinkTank estimated to influence global sales of $689,000,000,000 by 2016.

The hope is that iBeacons will become a useful ‘always on’ tool for shoppers to dip into as their need state dictates, rather than a flood of uninvited pushy brand intrusion. Discount offers easily become overwhelming. Getting the right content to the right shoppers is the challenge and responsibility that all retailers and brands face. Bombardment will turn us off. Additionally, to simply switch this potential on, the minimum requirement for a brand is an engaged audience using its existing native app.

So, the opportunity is most exciting for those brands that have earned an authentic relationship with their most loyal customers. Take, for example, the Tesco app twinned with the user’s Clubcard account and social media connection to the brand; the data runs deep. With the ability to broadcast to mobile via the app, using push notification, the communication possibilities are that of pinpoint accuracy and relevancy for the shopper.

Finally, the potential to unlock digital content in an in-store environment via object-to-device iBeacon technology means those statements in your social media strategy – conversation, engagement, storytelling – will be even better positioned to create a relationship with customers that leads all the way to the till.

James Poletti (head of digital strategy) and John Viccars (shopper strategist) at marketing communications agency, RPM.

  • Dave Lebbing

    The goal for effective retail strategy with beacons should be to replicate the interaction of the customer with a very good sales associate: be friendly but not hovering, offer information at just the right time, and note where you are in the store but don’t be creepy. That would be a limited but effective level of information exchange with the customer that the retailer could be up front with and still get a lot of benefit from. Really this is nothing new, it’s just being done with technology instead of by smart sales associates.

  • John Viccars

    Thanks for your comment Dave.

    Although I agree in part about technology replacing as you
    describe smart sales associates I think that actually there is something really
    new with this technology in its ability to broadcast a message and in places
    where you don’t have the luxury of smart sales associates or in environments
    like grocery stores where you have complex categories and shoppers don’t trust
    the staff’s advice, preferring to consult their mobile instead.

    I think that perhaps the opportunity in many cases supersedes
    that of the sales associate in that once a relationship is established content
    can also be delivered beyond store. Let’s not forget that the path to purchase
    is not black and white anymore especially when it comes to higher ticket

    To add I think there is potential for manufacturer brands
    who operate within retailers to tap into this type of technology and utilise
    retailer data (as mentioned in the Tesco example) to find innovative solutions
    to grow category and to the benefit of their brands.

    Thanks, John Viccars