Beacons and Geofences: Why we’re Limiting Proximity “Networks”

I’ve been doing a lot of work lately with beacons and geofences as we ramp up our proximity offerings at ShopAdvisor. There are some very cool things being done by companies such as Skyhook, Urban Airship, and Gimbal. Other companies such as Swirl and Mobiquity are also using micro-location with beacons to record interesting foot traffic patterns in malls and retail stores. Well established players like ShopKick are using beacons to earn in-store rewards, and Starbucks, Apple Stores, and Macy’s have all jumped on the micro-location/beacon bandwagon.

What I’ve discovered with all my research and talking with many of these companies, is that most are still defaulting to simply sending a push notification when a beacon is sighted or a geofenced region is entered. I don’t think this is the intention or the vision of these companies, in fact, many have elaborate scenarios documented on their websites. I think the problem here is with the retailers. I don’t think it is because their vision is short-sighted, more likely, it’s just extremely limited. This certainly isn’t a criticism of retailers, as I know many are quite interested in beacons and micro-location. I think the closed “network” of beacons is what has made truly interesting campaigns difficult, if not impossible.

Beacons themselves aren’t really networked, but I use the term because with the right app, they can and do work together. These devices send a low-energy bluetooth signal several times a second that contains a UUID, and a major and minor identifier. On iOS, you can only listen for 20 UUIDs per app at a time, Android has no such restrictions. But even if you can detect a devices signal, without a mapping, there is little meta data you can extract. This is by design, for security, for privacy…maybe. Companies like Gimbal, Mobiquity, and Swirl require SDKs that communicate with their APIs to determine if your app has “access” to a beacon’s meta data. Depending on the company, the result of a sighting might be something baked in to their system, or it might be up to your app to decide what to do. In many cases your app is just a conduit to cover more ground, and this is where the closed “network” has its most detrimental effect.

Some of the scenarios that these companies outline (check out Urban Airship for a good example) show geofences, in-store beacons, histories, profiles, product affinities, and more all working together to serve up the perfect message at the perfect time to a consumer. The problem is that this ONLY works if the app that the user has (and all the places they visit) are tied together and use the same providers to power their proximity campaigns. For example, if a user has the Bill’s Sporting Goods app and has that connected to their online account, then when they visit the store a series of beacons can alert them with messages to direct them to deals or other offers in the store. But that’s only if they have the Bill’s Sporting Goods app. If they have the Joe’s Bike Shop app, it most likely can’t see (and definitely doesn’t understand) the beacons in Bill’s stores.

This scenario might sound fine for two discrete apps, but what about apps that tie multiple shopping experiences together? What about a coupon app? Wouldn’t it be nice to get a Macy’s coupon when you walk into a Macy’s store, or a special offer on camping equipment when you enter the Outdoor Sports section at Dick’s Sporting Goods? What if I as a retailer want to run campaigns in multiple proximity applications like ShopKick, Coupons.com, and RetailMeNot? Do I have to put three different beacons in my store? YES, you do! Is that a huge deal? It depends. Wouldn’t it be nice to only have to maintain one set of hardware?

As I mentioned earlier, many beacon “network” providers are trying to do this by putting beacons in the stores and then selectively giving publisher apps access to them (with the retailer’s permission, of course). But this doesn’t solve the problem. It creates additional closed “networks” with more barriers and complexity. But what about security? Well, as a retailer, your competitors can draw (and probably already have drawn) geofences around your location. So competitors can monitor when someone is entering and exiting your store. How long they linger in your shoe department might be something worth protecting, but if you’re trying to protect against monitoring store visits and serving up competitive offers, then you might just be kidding yourself.

Closing off a subset of information for the relatively small amount of perceived security seems like a terrible tradeoff. As a retailer, I’d rather have app owners coming to me with interesting and exciting new ways to engage my customers. Perhaps one app’s geofence influences an in-store visit. Maybe another app serves up a promotional coupon when they enter the store. Maybe another app knows my shopping preferences and can direct me to deals in the shoe department. Opening up the network creates more audience, and with that comes more options.

Unfortunately for retailers, this doesn’t yet exist. When (and if) it does, I hope everyone takes advantage, and opens the world up to a true micro-location network. Thats when some truly great things will happen.

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