Emerging

Waiting in line: why it's all push and tap for NFC and Beacons

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Ben McCabe

Written on 14/11/2014 | Posted 3 years 3 months 7 days ago

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They are endlessly hyped as the perfect tools for connecting with consumers, so why haven't NFC and beacons taken off as expected?

While both NFC and beacons have obvious benefits for retailers, it will be up to the technology giants to force through its adoption While both NFC and beacons have obvious benefits for retailers, it will be up to the technology giants to force through its adoption

The much-anticipated launch of the iPhone 6 had been seen by many NFC advocates as the perfect opportunity for the much-hyped technology to break through as a universally accepted audience engagement tool. While devotees will have been initially disappointed by Apple's closed-shop incorporation of the device, there are signs that it remains far from dead in the water.

In the short-term, NFC will be used solely for the company's Apple Pay platform, yet its inclusion has been heralded as a success, with the iPhone following in the footsteps of most Android and Windows phones and giving NFC almost blanket penetration within the smartphone market.

While both NFC and beacons can be used for similar ends, the means are incomparable.

While one of the main aims for NFC is to create a platform for driving smartphone interaction with other digital devices, this role is also fulfilled by another Apple- and Android-backed technology in the form of beacons. While both systems offer a means for retailers, organisations and advertisers to engage with audiences, both methods are markedly distinct in how they communicate with users – and therefore how they are seen by the general public. 

NFC principally works in much the same was as RFID (the dominant technology in the UK for small cash payments), being a radio standard for transferring small amounts of data over short spaces. Unlike RFID, however, NFC is a two-way communication tool, which allows for much deeper interaction between devices. 

 

Two halves of the same advertising coin

There are obvious uses for NFC beyond simply being used as a payment tool. For ticketing, it could be used to replace unsightly QR-codes, while redeeming coupons and promotional offers or receiving receipts could be completely digitised using the technology. For digital signage providers, NFC offers an easy way to link an advertisement to an immediately redeemable offer, an approach that has been trialled at Westfield in London, among other major shopping destinations, although it has yet to see wide-scale adoption across the UK, either as a complement to digital advertising or as a payment method.

Beacon technology has tended to go under the radar compared to NFC, despite having enjoyed the support of major phone manufacturers for longer and a swathe of interesting implementations: Pebble has added iBeacon functionality to its smartwatch so it can be used to locate an iPhone, while Starbucks pushes a notification to an Apple device when a customer is in one of its beacon-enabled coffee shops, prompting the viewer to access or download the app.

The technology is also considered to have a future in integrated home systems, allowing a mobile phone to be used as a controller of devices, whether that is managing heating levels or sending reminders that it is time to put the rubbish out. It has also been mooted as a replacement for conventional signage or audio guides in museums and areas where multiple language translation might be required.

Despite this, the app-based nature of beacons means that it requires a further level of opt-in than NFC, potentially making it unwieldy in the eyes of some consumers. This layer of confirmation is a necessary barrier to prevent the platform from appearing to be spamming users, yet it nonetheless adds an extra complication in busy retail locations, where consumers demand simplicity and ease of use.

That said, the projected figures for both interaction platforms remain buoyant. According to research firm IHS Technology, global shipments of NFC-enabled phones will reach 1.2 billion units by 2018, raising NFC penetration to 64 percent. ABI, meanwhile, predicts that Beacon technology will form a 60 million-unit market by 2019, driven by the anticipated rise in interconnected technology, commonly referred to by the vile moniker Internet of Things.

 

Bitter rivals, or fast friends?

Is it necessarily that one technology will outweigh the other? While both NFC and beacons can be used for similar ends, the means are incomparable: one sits on your phone and acts essentially as a touch point, the other is location-specific and pushes notifications to a consumer. It isn't a case of VHS versus Betamax: the diversity of the two mediums means that it is entirely possible that both will survive and coexist without issue.

The main barrier to global adoption is likely to be Apple, Google and the other major phone vendors. While Apple refuses to open up NFC on iPhones, a large amount of the consumer audience is unable to tap into the possibilities of NFC. Likewise, the US company's iBeacon system is currently the best-known version of the technology; Apple's failure to mention it at its recent product launches will not have done it any favours in terms of encouraging wider acceptance. Unless on or more of Android, Apple or Windows make a concerted effort to push for a wide-spread take-up of NFC and Beacons, we might be waiting a long time for a train that isn't likely to come.

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