A few weeks ago, we shared how retailers are tracking customers’ routes in their bricks and mortar stores with the mention that Apple would soon launch its new iBeacon shopping technology.
On Friday, December 6, Apple finally released iBeacon message and location services to 254 U.S. retail stores – just in time to catch those shoppers still hunting for the perfect holiday gift. The Los Angeles Times reported that Apple’s New York City flagship store is equipped with 20 iBeacon devices throughout its facility.
Through iBeacon, shoppers can receive different notifications on their smartphones or tablets depending on where they are in the Apple store. For instance, they may get information on a particular product they pass, be asked if they’d like to see if they’re eligible for an upgrade when they walk by iPhones, or get a notice when their order is ready for pickup.
The problem for a retailer like Apple is that customers must configure their iOS devices to receive notifications, pushed out by iBeacon through a Bluetooth connection. This includes downloading the latest Apple Store app. According to TechCrunch, “Every iOS device since the iPhone 4S and iPad 3rd gen is already capable of being either an iBeacon receive or transmitter, as long as it’s properly configured.” It went on to say that almost 250 million iPhones and iPads could be enabled by the end of 2013.
Why iBeacon is not as robust as it could be
The idea behind technology like iBeacon is that it could generate additional sales for a retailer by cross-selling, offering deals and promotions, and luring customers into its store. iBeacon works well for Apple by greeting customers and sharing additional information on products, but at this point, it likely won’t drive greater sales, especially if customers see no value in it.
Wrote Gary Allen of Forbes, “Before the roll-out, one of the most-promoted capabilities of iBeacon was the ability to offer coupons, rebates or price reductions to specific store visitors, based on their location within the store. A shopper in the shoe department might be reminded to buy socks, or would even receive a 10 percent off coupon for socks. At a grocery store, a shopper in the pasta aisle would be directed to the location of spaghetti sauce or French bread, both discounted.”
The problem with this feature for Apple customers is that the company doesn’t offer discounts on its products. The iBeacon can suggest a phone charger or phone cover when someone buys an iPhone, but there’s no additional incentive for the customer to make the purchase. While iBeacon technology could drive more sales at say, a Macy’s or a Best Buy, at Apple, the customer doesn’t get to enjoy the added benefit. And without an incentive, customers are less likely to enable their phones or welcome notifications.
At this point, many retailers have instituted technology-driven shopping tools, such as QR codes and iPad displays. However, Apple is setting the standard by connecting the information directly to customers instead of customers having to be active in the experience. But the iBeacon may have more legs in other retail stores that put an emphasis on sales and promotions.