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Smartphones have become more advanced — and so has the promise of using them to deploy sophisticated location-based marketing technologies.

Location-based marketing is generally defined as the intersection of people, places and media. In this context, places range from the homes where we wake to the places we pass during our commutes to the offices or other venues where we spend our days — and back again.

One of the most exciting possibilities of location-based marketing is indoor location technology, which brings Internet-style tracking to physical spaces.

New technologies like indoor positioning systems offer not only new customer experiences, but also new analytics measurement tactics that can make marketing strategies all the more valuable.

Follow the Customers

Think of an indoor positioning system (IPS) as an arrangement of digital media displays.

These can locate objects or people inside a building using radio waves, magnetic fields, acoustic signals or other kind of sensors.

The sensors send proximity signals. Mobile devices, usually via apps designed to trigger once the signal is received, intercept the signals.

Retailers are planning indoor positioning systems that use beacons, low-powered, low-cost transmitters triggering various smartphones within range on a retail floor.

Bluetooth, a familiar transporting signal with consumers, is the driver behind beacon adoption. A variation of Bluetooth, BLE (Bluetooth Low Energy), was developed specifically for sensors like beacons to transmit while drawing a minimal amount of power from the consumer’s mobile device.

This development has made beacons attractive among retailers. Business Insider noted that the number of US retailers deploying beacons “is expected to hit 32 percent in 2015 and 85 percent in 2016.“

Organizations outside of retail are also discovering how beacons can enhance customer experience.

Last month, the In-Location Alliance, a consortium aimed at increasing the adoption of indoor positioning and location-based services, announced the winners of its “Best Use Case Contest."

These three real-world deployments comply with the In-Location Alliance System Architecture:

  1. indoo.rs – Airport; a collaboration with San Francisco International Airport for helping the blind and visually impaired to find their way around the Airport at Terminal 2.
  2. InfSoft – Campus Düsseldorf; a collaboration with Vodafone that gives staff and visitors at the new German center a wealth of information and services around the building complex.
  3. Sailstech – iMap; an indoor mobile navigation app for the largest station in Taiwan — Taipei Railway Station, also known as the Taiwan’s largest maze.

Silent Tracking

Beacons are a significant advancement of on-site technology that involves the mobile phone.

Remember QR codes? The square emblems seemed ubiquitous on every product package and advertising flyer just a few years ago. All marketers had to do to use them was to add a URL or a digital media into a QR code builder and issue the media.

But few people imagined a strategic deployment and consumer adoption of QR codes.

The main challenge with QR codes is that for access to the embedded media, consumers must download a QR scanner and activate it each time a QR code is seen.

Many did not, leaving QR codes unscanned — and embedded marketing media ignored.

Beacons eliminate the activation steps consumers must take. They trigger by proximity.

When a consumer with an active smartphone is near beacon-enhanced digital media, a Bluetooth BLE signal between the media and an associated app is established.

Most smartphones have their Bluetooth activated and consumers accept location based services on the downloaded app.

So the consumers’ attention is kept on the value created from a familiar app instead of deciding to opt in at the moment a QR code is seen.

Interest in beacons has also attracted the attention of analytic practitioners. One reason lies in the current movement of incorporating offline data into analytics solutions.

Deploying cookies – text files that enables aggregate data collection – usually meant marketers could understand customer behavior as long as that behavior occurred on a webpage.

The latest analytic solutions have introduced new data protocols that permit sensor-sourced data to become dimensions in analytic dashboards.

There are, however, few analytic solutions dedicated to retail floor response to beacons. YFind, a Singapore based provider, introduced a specific analytics tool in 2013.

Moreover, beacons are meant to measure general customer proximity, so some analysis concerns with regard to customer position can occur.

It was once believed that offline and online retailers would compete against each other for sales supremacy. That competition may intensify as beacons take off. Beacons have blended offline and online customer activity, so that a retailers’ personalization strategy – be it from a brick-and-mortar or an e-commerce site – is real.

Title image courtesy of San Francisco International Airport.