LevelUp: Consumers increase spending with iBeacon technology

 
June 24, 2014 | by Will Hernandez

When LevelUp hosted a celebration last month in its new Boston office, the mobile payment and loyalty provider tested Bluetooth Low Energy technology, specifically Apple’s iBeacon. The company's engineers plugged a beacon into a hallway outlet and taped a note on the device warning others not to remove it. An executive at the time revealed the company was testing iBeacon, but did not reveal anything else.

Last week, LevelUp officially launched iBeacon support for its partners interested in using the technology in their stores and revealed some use-case statistics that could boost its standing with merchants.  

LevelUp quietly launched its iBeacon program in early May and claimed that in 30 days, participating businesses saw a 22-percent increase in customers’ spend either through the LevelUp app or apps built on the company’s platform.

Lapsed LevelUp users, those who have not used the app to pay at a merchant for more than 30 days, increased their rate of purchases 63 percent following iBeacon integration.

“By analyzing data from hundreds of our merchant partners, we’ve found customers to typically spend up to 60 percent more than average when they know they’re about to unlock a loyalty reward,” Seth Priebatsch, LevelUp’s CEO, said in a statement. “Building iBeacon support into apps built on the LevelUp platform will help customers stay apprised of their upcoming rewards and help businesses earn more through their loyalty programs.”

Apple introduced iBeacon in an iOS update last year. PayPal announced plans for its Beacon program around the same time. Merchant can use BLE to ping customers’ smartphones within range of a beacon device with notifications for coupons, announcements and other loyalty offers.

LevelUp has installed beacons at 50 merchants and plans to have 1,000 more businesses equipped with the devices by the end of the summer. About 14,000 business locations currently accept LevelUp.

“Brick-and-mortar businesses used to lack the intelligent tools of e-commerce giants like Amazon,” Priebatsch said in a statement. “Mobile payments have enabled local businesses to track customer spend and deliver unique offers to individual customers like never before. Now with iBeacon functionality, businesses using LevelUp can also communicate with customers during their crucial decision-making process.”

LevelUp’s support for iBeacon falls in line with a use case industry observers believe will help boost BLE’s prominence with merchants: loyalty and marketing schemes.

“Is it really about marketing right now? I would say yes,” James Wester, research director of global payments for IDC Financial Insights, told MobilePaymentsToday.com in a recent interview. “The primary use for [BLE] is finding a way to send a message and link to a consumer when they’re within a reasonable distance from the beacon, a point where they are likely to act on something. And that’s a very cool thing.”

Wester and others do not believe BLE should be viewed as a replacement for current emerging technologies such as NFC or EMV. Instead, BLE is intended to act as a complementary tool to the in-store shopping experience.

“BLE should be perceived as an exciting new enabling technology that has the ability to affect many aspects of the retail customer experience,” Erik Vlugt, VeriFone’s vice president of product marketing, wrote in a white paper late last year. “BLE can be the enabler for a number of ways to interact and pay in the store, but it is unlikely to instantly replace any existing technology.”

LevelUp did not reveal in the press release any future plans for BLE outside loyalty and marketing efforts.

Should a BLE payment option emerge with LevelUp, it could look something like what PayPal introduced last year with PayPal Beacon.

“When it comes to payments [and BLE], the idea would be to link that proximity with any number of services that would be payment related,” Wester said. “If you come in right now, we’ll have something ready for you, just pick it up and go. You can also have something for people to make it easy to purchase without thinking about it. That process for pulling cash or pulling a card out of your wallet is a point at which consumers are really thinking about the purchase. And as a merchant, you want that.”

Photo courtesy of Jonathan Nalder


Topics: Customer Service / Experience , Online / Mobile / Social , Systems / Technology


Will Hernandez / Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.
View Will Hernandez's profile on LinkedIn

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