Why iBeacons fail to deliver robust analytics for retail

Björn Sjölund

iBeacons in retail

It’s been a while since I wrote about the iBeacon technology so I thought now would be a good time to check in on how things have developed. The iBeacon technology was heralded as the next coming for proximity marketing. Those who are more experienced (read: old) might be aware of such experiments happening already in the late 90’s with telecom operators pushing SMS messages to unsuspecting users that are walking past a local coffee shop. 

I remember the first time I got a message that promised me a cheaper cup of coffee if I just showed the SMS promotion I just received. I was more curious about how it worked rather than thinking about the fact that I was just sent a message without having opted in to any kind of marketing service. I did not buy a cheaper cup of coffee that time because I was not in the mood.

iBeacons always require an app to be installed

iBeacons entered the market with a very similar message, with one big difference. The user would have to download an application and approve the sending of proximity based messages. This changes the game and puts the power back in the hands of the user, which is great. The worst thing that could have happened with iBeacons would have been to open up the spam flood gates, by allowing messages to be sent without the user's permission.

The same thing that saves iBeacons from spam is however also the same thing holding it back, namely app adoption. The need for having an app to receive “iBeacon messages” means that you need a large user base in order for your iBeacon channel to have reach. Facebook has taken advantage of their great app install base and launched their own iBeacon service for businesses. At the same time, some industry experts are suggesting we might be living in an app-less world at some point in the future. This would necessitate a different approach for smartphone users to opt in for location based messaging.

At Walkbase we also offer our own Bluetooth beacon platform, Engage. With Engage we focused on building a solid beacon platform with security and infrastructure control as primary differentiators. Our proprietary beacon security technology guarantees our customers have full control of their beacon infrastructure.

Using iBeacons for analytics

Now back to the subject of analytics. As we know from the eCommerce space, the modern approach to digital marketing is always based on robust analytics. It’s not only about measuring the effectiveness or reach of marketing, it’s also about using analytics data for intelligent targeting, personalisation and timing of advertising messages. 

A key question for location based advertising triggered by iBeacons is how to get robust analytics data from e.g. brick-and-mortar stores. In other words, how reliably can you measure in-store customer behaviour using nothing but iBeacons.

As I mentioned before, having a good iBeacon service adoption necessitates a good level of app adoption. Therefore the value iBeacons offer as a source of analytics data is actually still very limited. We have compared the value of Wi-Fi analytics data vs. that of iBeacons and we’ve come to the following conclusions:​

  • The (so far) low adoption numbers of iBeacon applications means that you do not capture a large enough % of the visitors for robust analytics
  • It’s not unusual to see a Wi-Fi penetration of 70% in urban areas, whereas iBeacons apps would represent less than 2% in most cases
  • However, iBeacons are potentially a great source for added granularity in retail analytics data, especially attribution data (i.e. who has seen which message, where and when)
  • iBeacons currently represents the best methods for delivering and measuring the success of tailored proximity messages

We can therefore conclude that iBeacons represent a huge potential for the advertising market, but at the moment it’s no replacement for Wi-Fi as a source for in-store customer behaviour analytics. This is why the Walkbase Analytics solution relies on Wi-Fi, door counters and other in-store technology for gathering analytics data. This combined with a secure beacon platform for messaging represents our view of the best possible way to implement modern in-store marketing.

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Walkbase provides a retail analytics solution for improving the impact of marketing on physical stores and personalising in-store shopping experience.