Want to build beacons into your business? Read this first

Apple’s iBeacons have set off a rush of excitement in the retail and advertising industry with promises of being able to pinpoint the consumer at the exact moment they are in a store contemplating a purchase. You can send someone in the shoe aisle a coupon for shoes! Or socks! You could send a coupon to a shopper as they walk by your store (a trope we’ve seen in location-based advertising since 2004 at least).

However, not only would this irritate most consumers, it’s also ignoring both the benefits and challenges of implementing beacons in business settings. Like any enabling tool, beacons can offer a lot more information that mere coupons and understanding how to deploy them properly is way more complicated than the average person imagines.

Bryan Menell, the CEO of Mahana, an Austin, Texas company building business rules software for Beacons, recently shared some of the lessons he and Mahana’s customers have learned in the last year as part of various trials of beacons.

Beacons are chatty: Beacons work by constantly pinging devices around them and sharing information. It’s the equivalent of someone begging on the street. They ask everyone, but may only carry out a few transactions. Still, even a few beacons can generate a lot of data in the form of each ask, Menell said. For example, a two-day conference with only six beacons generated 8,800 separate transactions.

iBeacon demonstration example mobile shopping

Beacons are power hogs: There are both wired beacons and those that are battery operated. But so far, Menell said, the battery-operated Beacons aren’t good for anything except temporary installations because it’s a pain to change out batteries ever few months. I’ve spoken to several chip firms that are trying to offer better components and radios to solve this problem, but for now, Menell thinks wired is the way to go for a permanent installation. Light fixtures are a good place.

ByteLight's light-field communications reader (source: ByteLight)

ByteLight’s light-field communications reader (source: ByteLight)

The notifications aren’t the only value of a beacon: While grabbing data and sending information to a person when they hit a beacon makes sense, businesses can do more. Much like physicists are obsessed with dark matter, businesses should obsess over the information you can glean from a unique individual passing between beacons. “When someone hits a beacon outside your store and later turns up inside the store, understanding how long it took to draw them in or their path to get inside is valuable,” said Menell.

Beacons are vulnerable: Because wireless signals are prone to interference, there’s a learning curve that comes into play when installing beacons. You’ll have to figure out where to place them so you get the best signal strength, but also so they track the right kind of traffic and can’t be interfered with. Many businesses tend to place beacons in ceilings so they can be wired to power and aren’t accessible for employees or passersby to move around or hack.


Qualcomm’s Gimbal beacon.

Beacons need middleware: While many retailers are hot for beacons as a way of offering discounts or advertising to shoppers, Mahana’s customer base in the hospitality industry is more interested in using them to provide a better customer experience. For example, when a known big spender walks into a casino and wanders up to the bar, that could generate a ping on a smart watch or cell phone carried by a floor manager. Then, the manager can pull the customer aside and take them to a VIP area. But to make that possible casinos and hotels have to tie the notifications from beacons into a CRM or business-rules platform.

Mahana has tested beacons in several restaurants and has two big customer trials in the hospitality industry at the moment. The company is promoting using beacons not as some kind of advertisement system, but more as a way to track customers in real time using Bluetooth beacons and opt-in apps. And if businesses want to use beacons like that, there’s a much more complicated path to success. Even alternative real-time people tracking implementations tend to have multiyear deployment schedules, not because the technology is hard, but because understanding how to use a fundamentally new source of information in your business is hard.

Beacons make real-time tracking technology more affordable and accessible to all, but figuring out how to make money or better your operations is still tough. Founded in 2013, Mahana joins the ranks of companies hoping to make that easier.