Late last month, two of technology's more influential companies, Apple and PayPal/eBay, announced proximity communication products based on the Bluetooth 4.0 specification, also known as Bluetooth Low Energy (BLE) and Bluetooth Smart. These announcements bring both attention and momentum to the technology and set it up as a serious contender for near field communications (NFC).
These Bluetooth "beacons" can communicate with smartphones up to a range of 50 meters, creating both a channel for retailers to send more targeted messages to nearby shoppers and a way to determine shoppers' in-store locations. PayPal's Beacons are also capable of contactless payments through the use of an app.
The messages sent from beacons to shoppers can be product suggestions, special offers or any other kind of content, although current limitations won't directly support the bandwidth intensive delivery of streaming video. They can also send different messages to shoppers who are at different distances from the beacons.
Additionally, as the beacons can help determine shopper locations, they can be used for in-store analytics, such as understanding shopper locations and movement in stores.
Compared to some other proximity communication technologies, beacons have some unique advantages. They are relatively inexpensive. One manufacturer currently sells three for $100. As with most technologies, prices are expected to drop.
As standalone devices, beacons can run on a watch battery for up to two years. These features lower the bar for retailers to test how they might use beacons to drive business.
Beacons, unlike NFC, do not require a shopper be within an inch or two of a tag to communicate. This requirement for NFC puts the burden on the shopper to take a specific and potentially unusual action, and is likely to severely limit how many shoppers will use it.
Also, Apple has not yet embraced NFC, inhibiting its universality. Conversely, all iPhone models since the 4s are equipped with Bluetooth 4.0. Google provided support in Android 4.3 although some manufacturers (Samsung and HTC) have already developed their own SDKs.
There is an increasing number of technologies available to retailers, but they are usually more expensive to deploy and maintain. WiFi triangulation and fingerprinting, for example, has higher setup costs and requires a significant infrastructure to support (including a WiFi network that many do not yet have in place).
A potential hurdle to mass acceptance of beacons is that smartphones will need to be set to accept incoming messages, although t's likely that will become standard operating procedure. And, as always with communication technologies, this one may bring its own set of security concerns that need to be addressed.