Ever since iBeacon made its debut on the iPhone in 2013, it's been heralded as the next big thing for retailers. Using the Bluetooth low energy radio on your smartphone, iBeacon technology can track your location within a few feet of where you are and push you special deals and advertisements onto your phone as you pass by stores. But so far, we've yet to see much uptake with retailers.
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"In the [fast food world], these are big numbers," said Robert Hanczor, the CEO of San Diego-based iBeacon startup Piper, which made the app for McDonald's to send the promotions. “They saw significant statistical change in consumer behavior.”
Based on these initial results, Piper is working on rolling out iBeacon programs to other McDonald's franchises in the southeast for an additional 263 retail locations.
On top of the app, Piper also makes money selling small, waterproof iBeacon boxes with the Bluetooth radios inside loaded with iBeacon firmware. Retailers such as McDonald's need to install these in their stores to start tracking their customers. The hardware goes for about $50 a pop.
iBeacon adoption is still in its infancy for retailers, with less than 1 percent out of the 3.6 million US retailers using the technology,
Ultimately, though, Hanczor hopes to scale the adoption of iBeacons by making the Piper app the central app for any retailers to keep track of their customers.
“Looking ahead, there will be an ecosystem with millions of iBeacons,” said Hanczor. “In that environment, consumers will want to control the notifications that the iBeacons can trigger. Piper will be there to create preferences for proximity-based content.”
And there's a lot more retailers can do besides pushing special promotions onto customers. For example, one other thing Piper's McDonald's app does is ask for customers to fill out a survey. And perhaps more concerning for some, retailers could also collect a lot more information about costumer behavior with iBeacons keeping track of everywhere you go in the store. With this data, retailers could keep track how often certain customers visit the store and spin out automated loyalty programs based on how often they come around.
“We think a coupon is probably the least interesting way for using this technology,” said Hanczor.
While retail is the most obvious place to start for iBeacons, there's plenty of ways the technology can be used outside of retail, such as the smart home and smart cities or even in manufacturing and industrial arenas. One of Piper's biggest rollouts to date is with the city of Columbus, Georgia where iBeacons are used for giving tourists more information about the city.
Even though iBeacon installation is currently small, analysts are projecting iBeacon hardware will grow to 60 million units by 2019, according to ABI Research. And
Piper started back in 2012 building apps for businesses. But once iBeacon came out, the startup shifted gears to developing apps based on proximity. The startup has raised $2.5 million in a Series A round.
“Consumers won't know these small radio devices are responsibly for the content they're receiving,” said Hanczor, “but they'll appreciate retailers are connecting with them with relevant information they can act upon.”
