Will Apple’s LBS iBeacon burn bright?


TECH CORE Appflare, a provider of Apple's iBeacon technology, helps retailers make the most of the location based services and analytics that this cool piece of kit can supply. To encourage uptake of this new technology that only launched mid 2013, Appflare is setting retailers up with the full kit for free. Smart Chimps chats to Appflare CEO, Owen Geddes, on why he thinks iBeacon's are worth the investment and where they are taking the future of shopping for consumers and retailers alike.

Smart Chimps: Does iBeacon work with all mobile phones, or is it an Apple thing?

Owen Geddes: iBeacons can work with any phone that has Bluetooth Low Energy and an operating system that supports it. Right now that means that Apple iOS handsets and Android (version 4.3 and above) handsets are supported. It equates to nearly 30% of phones in the UK today, but will be the majority by the end of 2015.

SC: What do you think will be iBeacon's biggest markets?

OG: We think this will change over time. Right now it is all about fast moving consumer goods (FMCG) brands, grocery and convenience. There are a lot of brands that have been unable to communicate with customers, and a lot of retailers that want to piece together their mobile strategy. Beacons are very much being seen as a key to solving these puzzles.

Fashion retail will probably start to embrace beacons later this year, which will eventually lead to all areas of the high street. However in the long term we think transport is going to be huge, as are home applications and peer-to-peer. You will almost definitely see payment solutions using beacons in the next few months, that will span multiple sectors with big impact.

We are also seeing some very innovative content based applications which are going to change habits, particularly in the hospitality sector, but more specifically in coffee and fast food.

One thing is for sure, beacons are pulling together some interesting alliances from brands, content owners, venues and retailers that were unthinkable just 12 months ago. It's going to be an exciting year.

SC: How do you plan to develop your iBeacon strategy, in that you are giving it out at the moment for free to retailers?

OG: Right now we have a big focus on the grocery, convenience and newsagent sector, as that is where we see the early adopter brands. To be frank we intend to own that market, and we will be in thousands of UK locations very, very soon. We are very busy installing beacons at the moment.

However we are also working with partners in the background to make significant in-roads into hospitality, entertainment, transport and outdoor media. But we see that very much as channel activity, with our partners adding their own expertise to our capabilities.

SC: Does iBeacon send messages to consumers that have their Bluetooth turned on only?

OG: Yes, that is correct. iPhones (with the latest version of iOS; around 90% of them,) switch Bluetooth on by default. Android however has to have Bluetooth switched on by the user or the app. We think the number of handsets with the right hardware, right operating system and with Bluetooth switched on is around 12% of all UK handsets, this will reach 20% by the end of this year.

SC: Do customers have to download the app first before they receive messages? If so, how do you convince potential users that this is a good idea?

OG: At the moment a consumer has to have a ‘beacon enabled' app on their phone to be able to receive offers. Many retailers we are working with are updating their existing apps, so existing users will automatically get the benefits. In other locations we are placing signs at tills, with a QR code, NFC rage and download URL to encourage downloads. There will be incentive offers for downloads. We will also be sending out a large number of very targeted SMS messages in early September to encourage downloads of certain apps.

SC: Are messages from retailers to consumers via iBeacon led by a permission message first, allowing customers to opt out if they don't want messages?

OG: Absolutely. The consumer chooses whether they want to download the app and on install they are asked permission for notifications to be enabled and for location to be enabled. If at any point the consumer no longer wants to get the notifications they can simply switch them off.

SC: How do you prevent pissing off customers with high numbers of messages?

OG: We also limit the number of messages a consumer can get; if you walk in to the same store five times in a day, you won't get five notifications.

SC: Does iBeacon know what consumers are looking at while instore, ie, online browsing to compare prices, or does it just push out retailer messages?

OG: This very much depends on the retailer, app and how it is being used. In the vast majority of locations the app simply knows that the consumer is in-store, and how long for.

However we are currently working with some grocers in test environments to give a far more detailed view, so we know a consumer is in a particular aisle, or in-front of a particular product category for example. Naturally in these instances the consumer is made aware that this is the case and there is a clear value exchange for this knowledge (ie, the consumer gets something back of value).

SC: Are you going to expand out of the UK, and if so, what are your geographic and strategic plans?

OG: The UK is very much a proving ground for us, and will continue to be for the next few months. However we are already planning entry into two European markets, along with North America and some Asian markets. It has taken us nine months to really zero in on the market needs, and we think we have something unique. The next three months are all about running campaigns and projects that prove this. Then we are ready to scale.

SC: Thanks for talking, Owen!


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