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Summary:

Beacons, the proximity radios that communicate with consumers’s phones when they are near the beacon, are popular with retailers for advertising, but they could do so much more.

iBeacon

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.

Gilbarco.com

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.

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9 Comments

  1. Richard Bagdonas Thursday, June 26, 2014

    Great information base for making decisions on how and where to use beacons. Thank you for the mention.

  2. As a consumer how will I block beacons?

      1. High explosives?

    1. Hi Im Reif. Working on a beacon startup, (that hopefully you wont be bothered by) You will need the actual app the controls the beacon, and then also you will need your bluetooth on.

      So its not automatic spam. Don’t worry.

  3. Michael Teal Tuesday, July 1, 2014

    You are being watched…

    Retailers, crooks, the government, and others shady individuals are tracking your movements. Even when your Wi-Fi is turned off, your phone may be broadcasting information to whomever is in range which can be used both to track repeated visits to as well as your exact movements in an area under surveillance.
    It’s not a big step to couple this to personal information – a retailer for example, could track your trip to the register and correlate with your payment information. Now the tracking hardware and software vendors, the store (or chain) owner, their business partners, they can now all track where you are every time you come into range of one of their systems, and fully profile who you are, what you do, your financials, and your daily patterns!
    That is just one example, but there are many uses for tracking you. Make no mistake, this is happening in the real world today.

    Pry-Fi

    One solution is shutting off Wi-Fi completely (including the background network scanning, a setting most people don’t know about), but you would lose benefits like automatically connecting to known Wi-Fi networks and improved location awareness for your apps. It also does nothing to help the situation for others.
    Pry-Fi will prevent your device from announcing all the networks it knows to the outside world, but it will still allow background scanning and automatically connecting to Wi-Fi networks. While you are not connected to a Wi-Fi network, the MAC address will constantly be pseudo-randomized, following a pattern that still makes the trackers think you are a real person, but they will not encounter your MAC address again. This will slowly poison their tracking database with useless information.
    When you do connect to a Wi-Fi network, unless you specify otherwise, your MAC address will also be randomized – the same MAC address will not be used the next time you connect to this or any other network.

    War!

    Though of course the companies involved with these trackers claim they wouldn’t use the data maliciously, the possibility is there, and we all know that if something can be abused, ultimately it will be. There do not appear to be any laws against these practices yet, nor is it likely Wi-Fi will be redesigned any time soon to get rid of the information leaks.
    But we can make an effort to reduce the usefulness of the tracking data for the exploiters. Pry-Fi comes with a War mode, which when enabled tries to make your Android device appear like dozens of people. Just wandering around an area under Wi-Fi location surveillance for a few minutes can ruin the tracking data for the period of your stay.

    Proof of Concept

    This is proof-of-concept code, and how for it will go in the future depends on interest and how well it works. It has been tested on several devices and seems to work, but it is very young still. The magic the app does to achieve its purpose is ever subject to changing Android security policies and OEM customizations, so even though it works now, there really is no saying if it will still be possible in future firmwares.
    Of course you should also keep in mind that tracking can be done in many ways, and these W-Fi signals are far from the only method in use.

    More…

    Further details, device compatibility information, FAQ, discussion, etc is all available on XDA-Developers.com here:
    http://forum.xda-developers.com/showthread.php?t=2631512