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Bluetooth 5 Finally Makes Beacons Appealing

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by Barry Manz

Whether you’ve been periodically annoyed by Bluetooth’s inability to pair with a device, you still have to admit that it’s a terrific technology. It’s Bluetooth’s ability to simply function transparently that makes those “blips” annoying: we just assume it will work. However, there’s one Bluetooth’s feature that most people probably don’t even know exists: beacons. In fact, First Insight last year found that 70% of us don’t even know what a Bluetooth beacon is.

Frankly, I didn’t either until recently when I researching an article for Mouser about Bluetooth 5, when information about Bluetooth beacons nearly knocked me over with 472,000 references from Google. Once I dug into this technology I realized their huge potential for organizations that want to track what its customers do in their stores while bombarding them with coupons and other incentives. They’re an underexploited goldmine not just for retailers but for many other organizations as well, or could be if people used or even knew about them and if so liked them, and therein lies the rub.

The Beacon Bonanza

The Bluetooth Special Interest Group (SIG) made beacons possible when it introduced Bluetooth 4.0 Low Energy in 2010, which focuses on reducing power consumption by reducing data rates and other modifications. It also added one-way transmission capability to Bluetooth for the first time, tailored made for beacons that simply transmit signals but don’t receive anything in return, which also means they don’t have to pair with a device. Consequently, Bluetooth Low Energy devices consumer very little power.

As they typically operate from a coin cell, are so small as to be practically invisible, and inexpensive, retailers can install lots of them within a store: at each product display, at checkouts, and many more depending on the entity employing them. The more beacons they install the more detailed the information they can gather.

The reason most of us don’t know about Bluetooth beacons is that they require a smartphone app to function, and not just one but one for each company that you’re interested in. For example, to use them you must have your smartphone turned on, have downloaded the required app and configured it to allow the company to send you push notifications via beacons, and most important of all, have Bluetooth enabled on your phone. Note that the app need not even be running to be awakened by a beacon signal. After gathering the data for its survey, First Insight figures about 40% of people in North America enable Bluetooth, a percentage that drops precipitously elsewhere. However, as the use of wearables and Bluetooth in vehicles increases so will the percentage of people who enable Bluetooth on their phones.

So, if all these criteria are met and you’re the consummate shopper, you could be receiving notifications en masse as you stroll through a mall, which you may very well find a distraction, or worse. Apps also consume power and memory, so there’s that to consider. I don’t know about you, but I get enough notifications as it is, from text messages to emails and news alerts, to name a few. But I’m not the consummate shopper.

Not the least bit surprising is that more and more malls, retailers, hotels, airlines, supermarkets and food companies, assorted other organizations, and even London’s legendary Regent Street high-end shopping area are working hard to drive the adoption of beacons. Apple was arguably the first with its iBeacon protocol introduced in 2013 and today makes its own iBeacons, which cost a meager $17 (others are even less expensive). Not to be outdone, Google also has a beacon profile and platform called Eddystone. There are literally hundreds of companies that either have Bluetooth Beacon apps for IoS or Android or are testing them, with more undoubtedly to come.

The projections for the Bluetooth beacon market are wildly enthusiastic. Business Insider Intelligence last year noted that coupon app company RetailMetNot associated $3.5 billion in sales way back in 2013, that beacons influenced $4 billion in retail sales in 2015, and projected this would increase tenfold in 2016 (yet to be verified). ResarchandMarkets forecasts growth of nearly 223% per year through 2020. These are formidable numbers for sure, but considering the advantages of beacons (soon to be enhanced next year with the release of Bluetooth 5), which Harvard Business Review calls “the missing piece in the whole mobile-shopping puzzle”, chances are we’ll all know a lot more about them, soon.

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