With the launch of Apple Watch (along with new iPhones) this week, it’s worth taking a look at what that means for the indoor location market and Apple’s use of iBeacon. Released just over a year ago, Apple’s iBeacon technology opened up a whole new dimension of location-based marketing opportunities (especially indoors where GPS isn’t accurate enough).
Using Bluetooth Low Energy (BLE) hardware (including lights), retailers and other venues can transmit geo-specific data to Bluetooth-enabled smartphones. This microlocation-based information allows operators to receive and send hyper-personalized notifications to smartphones users in range.
The beauty of BLE is its simplicity. Originally designed to track luggage and other items, and now a standard on most wearable devices, the technology sends out small packets of data to smartphones. However, next generation wearable devices can also receive data via the BLE protocol and this is where the Apple Watch may be a game changer for indoor location.
A recent study by Aislelabs, an analytics and solutions provider, which found that iBeacon (Bluetooth LE) battery drain on the iPhone is worse than on Android (and somewhat inconsistent in that sense), illustrated another limitation with Bluetooth LE technology. While many have been quick to crown Bluetooth LE the champion of indoor location technologies (given Apple’s support with iBeacon), there are limitations.
Although the buzz for Bluetooth LE has been around indoor location, that’s not really what the technology was initially designed for. Its primary use case is around connecting things - think about putting a beacon in your luggage at the airport and receiving a notification when your bag pops into the baggage carousel. Or perhaps its biggest use case to date – connecting smart watches and fitness devices.
These types of short usage cases don’t put the battery drain on devices, which could occur in more active indoor location engagements. AisleLabs test found that the Nexus 5 was more energy efficient using Bluetooth LE than the iPhone 5 in sample situations. Furthermore, other tests have shown that smartphones near Bluetooth LE beacons have been prone to toggle between multiple beacons unless an app is coded to listen for a particular one.
Brian Dean of InformationWeek had an interesting piece this week on the idea of Lighting-as-a-Service (LaaS if you will). The piece touches on how Phillips is overcoming the initial cost of retrofitting buildings and facilities with LEDs by allowing customers to skip the upfront cost and pay as you would for a monthly digital or software service. The agreement enables customers to move towards benefitting from the long-term energy savings LEDs provide, without putting themselves in an initial financial hole.
It’s also a sign that further change is afoot in the lighting industry. The basic components of a light (used strictly for illumination) are becoming a commodity. According to the U.S. Energy Information Administration, lighting consumes 461 billion kWH of electricity per year, which means that the transition from mainly fluorescent to mainly LED lighting could save billions of dollars while increasing energy efficiency.
As legacy retailers come to a realization that their storefronts (online and offline) and infrastructures are the final battleground for winning customer engagement we’re reaching a tipping point with technology adoption. Can it be a spark for future growth? What technologies may be next?
The $350M price for Trunk Club also illustrates how important the acquisition is for Nordstrom long-term. WalMart’s acquisition of Luvocracy through WalmartLabs, will bring Pinterest-like recommendations into the retailers social and mobile offerings.
Last week in New York City, executives from across the burgeoning indoor location market met for Place 2014: The Business of Location. Opus Research, which organized the event, predicts the market for indoor location and place-based marketing will surpass $10 Billion by 2018 and will eventually be worth $25-50 Billion annually.
I participated in the event on the Indoor Technology All-Stars panel hosted by Google’s Don Dodge (a ByteLight investor) alongside Nathan Pettyjohn, CEO of aisle411; Chris Godall, CEO of of Trusted Positioning; and Steve Cheney, SVP of Business and Operations at Estimote.
Most of us agreed that indoor location will vastly disrupt and highly impact several areas including network and IT spending, mobile coupon distribution and broader in-store shopper engagement.
However, there was a lively debate over if the Bluetooth Low Energy (BLE) beacon market can scale to meet industry demands in the coming years. While BLE beacons certainly have the momentum behind them - given their connection to iBeacon (both literally and figuratively) - they haven’t been used in large scale deployments - yet. Questions loom on how venues will replace batteries, and who will deploy and maintain what would be an entirely new infrastructure.
Although forecasters are saying there will be 60 million BLE ‘beacons’ shipped by 2019 – that’s certainly not enough hardware if the indoor location market really wants wide adoption among large retail outlets.