Beacon System

Beacon Technology: The Where, What, Who, How and Why

Beacons have been generating buzz since 2013, when Apple AAPL +0.85% first introduced iBeacon technology. And while it may have appeared for a time that this new way of connecting with customers might be slow to catch on, today it’s catching fire. This year began with BI Intelligence reporting that beacons would be driving $44 billion in retail sales by 2016, up from $4 billion in 2015.

While there’s been a lot of hype around beacons, they haven’t necessarily been very well understood. Here, we would like to offer some “beacon basics” that  will provide a fundamental understanding of the technology and its potential, 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 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 -1.18% 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.