The Beacon Technology

Apple has integrated the power of beacon technology in iOS connecting iPhone users to a network of iBeacons. Beacon technology offers a range of services to mobile users within a particular geographical location. Depending upon their proximity, users can be provided with buying suggestions, relevant information and a lot more. Mobile development is rapidly progressing to enable retailers and marketers to leverage the potential of beacon technology.

Sounds like exactly the right time for a quick primer on beacon technology and what it’s all about. After all, as the Future of Privacy Forum has pointed out, while there’s been a lot of hype around beacons, they haven’t necessarily been very well understood. This week, I’d like to offer some “beacon basics” that I hope will provide a fundamental understanding of the technology and its potential and help more companies of all sizes benefit from it. So without further ado, here’s the where, what, who, how and why of beacons today.

Where: Or perhaps more accurately, where not

Retail is probably the most often cited example of an industry employing beacons, with heavy hitters like Macy’s and Lord & Taylor deploying them in their stores. But retail represents just one of many kinds of businesses that can benefit from beacons. 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. Meanwhile, in the B2B arena, look for beacons to start turning up everywhere from trade show booths to corporate lobbies.

What: Location-based mobile customer communication

Apple explains iBeacon technology to consumers as the enabling technology for Apple devices to alert apps or websites (which the user has opted into) 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. Then — and this is the key part, of course — 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.

Who: Apple, Google GOOGL +0.41% and a growing list of manufacturers

As beacon manufacturer Kontakt has pointed out, Apple isn’t the only game in town when it comes to beacon technology. And in point of fact, Apple doesn’t actually make beacons; rather, it has developed the 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. Check out this list published earlier this year, and expect it to grow as more and more companies look to take advantage of opportunities in this space.