Proximity Marketing Spreads as Safeway, Duane Reade Test iBeacon Tech

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Long past are the days when privacy advocates merely worried that GM’s pioneering OnStar service could track your car wherever you traveled using GPS technology. Now, an increasing number of retailers and other brands are using new “beacon” technology to track consumers to within several inches of their locations in stores in order to push promotions and encourage spending. 

There are lots of other potentially disruptive uses to come from Apple’s iBeacon and similar technologies though as brand transparency and consumer privacy become top of mind.

Already, for instance, Safeway has been testing an iBeacon installation that automatically offers discounts to shoppers who have downloaded the supermarket chain’s “just for U” loyalty app and walk into the store—at the exact moment when consumers are ready to shop.

Similarly, Duane Reade, the Walgreen-owned East Coast US pharmacy chain, has launched a program to fit its New York stores with iBeacons that delivery weekly ads and coupons to opted-in smartphones. “iBeacons help remove some of the obstacles of engagement and facilitate customer interaction,” Tim MacCauley, mobile commerce director for Walgreen, told Adweek.[more]

Other potential retail applications would, for instance, allow an iBeacon placed in the cookie aisle of a store to activate a shopping app and display a promotion for Nutter Butters. Many retailers also are eyeing the devices to allow contactless payments in stores. Clothes shoppers could walk by a mannequin and an iBeacon-activated app could immediately tell them more about each piece of clothing on it.

In fact, earlier this year American Eagle Outfitters expanded its partnership with the ShopKick app to roll out iBeacon technology to 100 stores, providing a more personalized shopping experience for its young, mobile-savvy customers. In the UK, retailer John Lewis has tapped Localz, an Australian iBeacon tech firm, as one of its five “future of retail” tech incubator startups to promote in-store digital engagement.

While retail is a natural for iBeacon, the technology has the potential to disrupt other businesses, including travel (where flight status notifications could be delivered instantly to travelers’ smartphones), education, events, sports, and even spur love connections. As Venture Beat speculated, “a venue can use iBeacon to allow patrons to interact for dates, drive homes or buying drinks.”

Of course, there are a number of obstacles in front of the widespread use of iBeacon at this point, including the fact that consumers must opt in to such applications, (a rule that Nordstrom learned after it was caught collecting mobile data from in-store shoppers without permission) limiting the reach of the technology for now to the most loyal—and willing—customers.

As consumers get increasingly concerned about perceived invasions of privacy, however, they could get really touchy about entering a store passively and being actively jangled by a beaconized message—even though at some point in the gauzy past they may have “volunteered” in the fine print for such a future intrusion.

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