Geolocation Beacons Explained


Engagement is the key factor in the success of any business. Given the fact that there is always competition, it is important to keep the precision of targeting sharp. It is a matter of getting the right call at the right time in the right place. 

The emergence of beacon technology, especially  Bluetooth-based, has greatly simplified that challenge. They managed to transform what was previously achieved by thorough marketing campaigns and strategic ad placements, into a matter of a couple of clicks combined with an impulsive reaction.

 And as a result, it brought customer experience to a completely new level, and with that, increased growth prospects for the companies.

In this article, we will explain what beacon technology is, how it works, and how beacons are used in different business operations.

What is beacon technology?

Geolocation beacons are a kind of hardware transmitter fueled either by Wi-Fi or Bluetooth Low Energy technology. Here’s what they do:

  • broadcast one-way signal through a specialized application to nearby mobile devices like smartphones or tablets;
  • trigger notifications with various information ranging from simple statements to special offers and personalized messages. 

In a nutshell, Bluetooth beacons are very similar to lighthouses or loudspeakers. They transmit a signal (known as a universally unique identifier) into the ether and it can be caught by any prepared device in its proximity (i.e. one that has a compatible application).  

Why beacons are good for business?

What makes beacons very attractive for location-based businesses, like retail commerce, is that they provide a simple and cost-efficient solution for delivering relevant information for customers while also engaging them with the brand. 

imely nudges increase the chances of purchase up to 20% through the power of basic reminders

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It is a well-known fact that timely nudges increase the chances of purchase up to 20% through the power of basic reminders. 

Beacons are also a good tool for personalized customer experience on the spot. With additional user data about purchases, beacon application can suggest other relevant products or present customers with discount promo codes and other loyalty benefits. This contributes to strengthening customer loyalty and increases the overall engagement rate with the brand. 

With the help of beacons, you can gather such information as: 

  • how much time a particular customer has spent in a specific area of the store; 
  • which product section was particularly interesting for him;

Later on, this information is figured into advertising targeting that further perpetuates customer experience and improves the precision of product suggestions.

Now let's look at how this thing works.

How does beacon technology work?

The beacon technology framework consists of two components. There are:

  1. Bluetooth beacons themselves; 
  2. The accompanying beacon app that interacts with them known as the indoor navigation app.

Here how the beacons work:

  • The beacons are designed to detect the mobile device presence in its proximity and perform specific pre-set actions. 
  • When the user is near the beacon transmitter, the latter sends a code (UUID) to the device which is then interpreted by an application. 

beacons very attractive for location-based businessesbeacons very attractive for location-based businesses


Here’s what the beacon software does:

  • The application is installed on the device and activated by detecting the beacon transmission.
  • Upon receiving a code, the application interprets it as a notification on the device. 

It should be noted that previously iOS beacon software had an edge in a background mode as Android-based apps had limitations until recent updates.

Types of beacons: iBeacon, AltBeacon, Eddystone

There are 3 major types of beacon technology available on the market. Let’s look at them one by one:

1. Apple iBeacon — the major player of beacon technology. Introduced in 2013, it is one of the most commonly used types of beacons out there. They are compatible with both iOS and Android and are easy to implement in any environment. iBeacon is perfect for the straightforward UUID broadcasting of notifications.

Introduced in 2013, it is one of the most commonly used types of beacons out there

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2. AltBeacon — the original alternative to iBeacon that was introduced in 2014. From a technical viewpoint, AltBeacon and iBeacon are very similar, but AltBeacon takes a more streamlined approach to API which makes it more flexible in terms of operational customization. But at the same time, it is a bit harder to handle because of that. 

AltBeacon — the original alternative to iBeacon that was introduced in 2014

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3. Eddystone is Google’s take on beacon technology which was introduced in 2015. In comparison with iBeacon and AltBeacon, it offers more options to work with. In addition to standard UUID, Eddystone beacons can send URLs (which let you cover those who haven’t installed an application). This feature makes it a better instrument for engaging a new audience. 

Eddystone is Google’s take on beacon technology which was introduced in 2015.

Image source: BlueUp

How beacon technology is used in different industries (USE CASES)

Beacon Technology in Retail - Proximity Marketing

Proximity marketing in retail is the original field of beacon technology use. Retail commerce lives and breathes on giving the customer a reason to buy something. Since the customer is already in the store, beacons can drop a nudge right on the phone and simply suggest something worthwhile. That makes them very convenient tools for delivering a personalized customer experience with minimal resources involved. 

Retail commerce lives and breathes on giving the customer a reason to buy something.

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  • For example, if you have a discount for some product that is in demand by a specific target audience segment — you can broadcast a notification and draw some attention to this fact and eventually increase sales of this product; 
  • Similarly, you can inform about lost and found objects; 
  • In addition to that, beacons can transmit promo codes for certain customers as a reward for loyalty or some other achievement;
  • Or, you can just notify about new entries in the product inventory and other important events like brand giveaways. 

However, there is a catch. 

Before you can transmit all this goodness — you need to convince users to download your brand app that will run all these notifications. 

The key thing for successful beacon technology implementation into the customer experience is awareness of the application combined with clearly articulated benefits of its use.

A good example of proximity marketing in retail done right is Walmart. They use beacons to perpetuate personalized customer experience with reasonable offers, timely reminders, and attractive discounts based on external user data:  

  • customer’s location in the store;
  • the route sequence (from Gap shirts to FCUK shirts, etc); 
  • features of the location. 

This information is combined with an in-app input (most commonly - product searches). Each notification has a set of requirements, such as time spent on location, and the priority of an offer based on an in-app input. If the requirements of certain notifications are met - it is sent to the customer. 

Streamlined Payment Experience

Payments are the next logical step of implementing beacons into the customer experience. The most common two ways of implementing beacon technology to the payment experience are by adding it to the payment terminal and enabling payments via smartphone (currently in use by terminals compatible with Apple Pay and Google Pay services).

 use by terminals compatible with Apple Pay and Google Pay services

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In essence, the beacon-based payment experience is a fine showcase of the advantages of cashless purchases widely adopted by major retailers. Here’s why:

  • Payment proceedings are easier to track and analyze (that’s good for optimization of the supply chain and the analysis of the demand);
  • Fraudulent activity is easier to detect and neutralize (especially, in the case of account hijacking).

At this point, major digital wallet platforms, like Google Pay and Apple Pay, are compatible with beacon payments both via Bluetooth and Wi-Fi.

Event Management

Event management is the other big field where beacons may come in handy and make a huge difference. Managing events on any scale is a considerable challenge.

A simple event application with the account database and event timeline can cover the majority of logistical feats by various notifications and nudges.

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You need to: 

  • know what is going on all the time 
  • inform everybody about everything as soon as possible 
  • navigate people through the event and remind them of scheduled events and changes to the program.

A simple event application with the account database and event timeline can cover the majority of logistical feats by various notifications and nudges. 

Beacons can also be used to deliver complementary content like information about the companies in a certain area or details about present and future events.

Event apps can also send exclusive content during events such as charts and graphs from presentations or special offers. 

Let’s take for example how SXWS festival uses beacons to improve event management. 

In their case, beacons and event app handle:

  1. Registering and identifying the attendees;
  2. Proximity marketing for Event Promotion (for example, “Big product unveil at Hall H in 30 minutes”);
  3. Providing important information (event reschedule or merchandise giveaway)
  4. Location Navigation (map with all relevant events marked down);
  5. Social Networking (like contact exchange, etc);
  6. Exit Surveys

All this allows to avoid as much mess in managing the event as possible, and at the same time gather many more valuable insights about the quality of the event and audience engagement.

Content Delivery

Content delivery via beacon technology is a tricky affair. 

Unlike the use of beacons in retail commerce or event management, in which the application incites the external action i.e. the purchase of the product, in the case of content delivery, it is more a push-notification to go further down the rabbit hole to get something interesting.

In order to do that, you need to hook the user and convince him to proceed. 

How to do that? 

Interesting content is one way, but you need the right kind of environment to operate within to engage the user. 

The perfect way of implementing content delivery to the customer experience is with various hangout platforms like cafes, coffee shops and restaurants, and the likes. Airport or railway waiting rooms are also good spaces for this kind of activity. 

Imagine this as a digital newspaper stand with some additional features that come from customer loyalty (in case of cafes and coffee shops — this might be discounts, special offers, etc).  

It's a two-way deal. 

On the one hand, you diversify the ways you engage with the customer. On the other hand, you form a mutually beneficial relationship between several brands that increases the exposure of both. 

For example, in recent years, major newspapers like the New York Times and  Wall Street Journal have provided certain popular hangout spots in Manhattan and JFK airport with beacon-based content delivery. This included the latest news and some of the most popular articles. These tactics are used to promote the newspaper’s own applications by showing customers the benefits of a full subscription.

Beacon Solutions for Transportation

Transportation, and public transportation, in particular, can benefit from beacon app notifications in the following ways: 

  • inform passengers about the route schedule and current location of the vehicle (Stop AAA, some significant object nearby, etc.),
  • manage ticket deployment in a more streamlined and effortless manner. This approach is now widely used in the New York City public transportation system.
  • provide information such as train/plane changes or delays, and also specify weather conditions on the destination point. This approach is currently in use in the international airports of Frankfurt, London’s Heathrow and New York’s JFK. 

manage  ticket deployment in a more streamlined and effortless manne

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In Conclusion

Beacon technology is one of the many ways the digital realm integrates into the real world and makes it more comfortable. 

Whether it is retail commerce discount offers, cross-brand promotions, or simple weather reports on the road, beacons are a powerful tool to engage the audience and deliver them relevant information on short notice. 

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Volodymyr Bilyk

The App Solutions resident AI advocate