Beacons are still poorly understood within the retail industry and by consumers

This one-page explainer and the accompanying FAQ dispel the most common misconceptions about beacons, Apple's iBeacon system, and the way these work with retail apps. 

Click here to read our market forecast and report on beacons, "THE BEACONS REPORT: Exclusive Market Forecast And Top Strategies As Retailers Race To Adopt Them."

HOW BEACONS WORK

A beacon, in its simplest form, is a small, low-powered and low-cost piece of hardware that emits Bluetooth low energy (BLE) signals. The BLE that a beacon emits can wake up apps that are installed on smartphones and tablets within a range of about 160 feet.

This is useful because it allows developers to engineer apps that act a certain way when they are within range of a beacon — in other words, location-based actions and notifications.  

estimote beaconAll types of mobile apps — from payments and loyalty programs to couponing and shopping apps — can leverage beacons and their BLE to create a location-based experience for users.

A single beacon can emit BLE for up to five years (depending on battery) and cost as little as a few dollars. Usually they are not bidirectional, and they can only transmit signals, not receive them. 

But some vendors are adding more technology to their beacons for enhanced functionality, such as Wi-Fi connections and the ability to send and receive signals. Over time, we suspect beacons will take on many different shapes, sizes, and functionality.

For now, beacons typically send a very small packet of data centered on a unique identifier.

The identifier contains very specific location information, which, unlike most location-based data, is not tied to GPS. Instead it is tied to specific store locations and specific areas within a store. 

The identifier has three basic components — a UUID, which is specific to a beacon vendor, a "major," which is specific to a region such as a store location, and a "minor," which is specific to a subregion such as a department within a store.

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