Some GPS units can receive sufficient signal strength to determine a location inside a building. However, the resulting location accuracy is generally too poor to be used. Additionally, GPS is unable to locate objects inside multi-story buildings.
Nevertheless, indoor positioning has become the holy grail of location-based marketing because it makes it possible to assist consumers from their home to the shopping center. It helps them find their way inside the building, triggers messages and lets them pay for their purchases using their mobile. A major objective of this new marketing method is to prevent the loss of business to e-commerce sites.
The benefit of indoor location is not limited to marketing. Many airports, railway stations, convention and exhibition centers are now investing in these technologies to help users by providing them with useful information.
Indoor location is a generic term that covers three major types of services:
- Indoor location, a real indoor GPS, helps users find their way, optimize their visit, locate their friends and colleagues, and also provides behavioral analyses to retailers as visitors walk past.
- Micro-location lets travelers, visitors and consumers interact with specific items: a product on a store shelf, a work of art in a museum… The consumer’s presence is only identified when they are near a beacon. Their location is lost when they move away from it.
- Geofencing sends specific information when users enter or exit a predefined area. The most common use cases include geomarketing and customer loyalty programs.
What technologies are used and what services do they offer?
Wi-Fi Positioning System: The Pioneer
Wi-Fi Positioning System (WPS) is used when GPS is not suitable. It makes it possible to locate a device (e.g., a smartphone) through the detection of a Wi-Fi network.
Operating principle
The technique for Wi-Fi access point positioning is based on measuring Received Signal Strength (RSS) and on the method of fingerprinting. A fingerprint consists of the RSS, the SSID of the access point and the MAC address of the router. It is not necessary to be connected to the network. Signal strength can be determined via a simple ping test.
The device then queries a remote database to match the fingerprint with the location. Positioning accuracy depends on the number of locations stored in the database. In order to collect Wi-Fi location data, Google, Apple and Microsoft use smartphones and tablets. The devices periodically check their location by sending their identifier, the GPS location and the Wi-Fi fingerprint.
Applications
WPS is mainly used to determine locations in public places (railway stations, shopping centers, museums).
Conclusion
This location technology is well suited for indoor positioning applications, but it does not provide enough accuracy for geofencing or micro-location applications. This technological limitation makes its use unsuitable for marketing purposes.
Pros:
- With the use of UUIDs, a location’s fingerprint is absolutely unique.
- The fingerprint database is very rich thanks to crowdsourcing.
- Can locate users in most supermarkets, airports, railway stations…
Cons:
- Accuracy.
- Wi-Fi must be enabled on the receiver.
- Requires an internet connection to query the database matching the fingerprint and location.
Near Field Communication: The Burgeoning Mini-Revolution
Near Field Communication (NFC) is a high frequency, short-range, wireless communication technology that allows devices to exchange data at a distance of up to 10 cm. This technology is an extension of contactless cards using radio frequency identification (RFID)
NFC tags can link to information such as web pages, social networks and any other kind of data. Other areas in which NFC is emerging are contactless payments, door access control with secure contactless locks, signing on to computers, etc. All these actions share a common requirement: you must be near the NFC receiver.
Operating principle
To understand how NFC works, we must start by learning a little about RFID.
RFID
This technology makes it possible to identify objects, track their movements and read their properties remotely using a tag that emits radio waves and is attached to or built into the object. RFID technology can read tags that are not in direct line of sight, even through thin layers of materials (paint, snow, etc.).
An RFID tag is made up of a chip linked to an antenna, enclosed in a label. It can be read by a device that captures and transmits the information.
There are three types of RFID tags:
- Read-only tags, which cannot be modified;
- Write once, read many tags: the chip contains a blank memory where a specific number can be written by the end user. Once written, this number can no longer be modified;
- Read/write tags.
Moreover, there are two major families of RFID tags:
- Active tags, which use a built-in energy source (button cell, battery, etc.). These tags offer better ranges, but at a higher cost and with a shorter lifespan.
- Passive tags, which use the energy that is propagated at short distance by the radio signal from the transmitter. These tags are cheaper, usually smaller and their lifespan is virtually unlimited. However, they require a significant amount of energy from the reader.
What about NFC?
NFC uses passive tags with three different operating modes:
Card emulation mode
The mobile terminal behaves like a contactless card. The mobile phone’s SIM card can be used to store and secure encrypted data.
Examples of practical use:
- Contactless payment;
- Management of discount coupons or retail loyalty points.
Reader mode
NFC-enabled smartphones can read tags to display useful information or trigger automatic actions.
Examples of practical use:
- Interactive tours in museums;
- Task automation: changing the phone ringtone or launching an app when in range of the NFC;
- Asking for information in retail stores.
NFC tags can be programmed to send information to devices within range. NFC tags can be purchased online and programmed using mobile apps such as “NFC Task Launcher” (available on the Google Play Store).
Peer-to-peer mode
This operation mode lets two NFC-enabled devices exchange information.
Examples of practical use:
- Transferring photos between a tablet and a smartphone;
- Opening car doors.
Applications
Below is a summary of the multiple practical applications of NFC:
- Payment, either via a contactless bank card or by tapping a smartphone against a suitable payment terminal;
- Paperless tickets for transportation or events (shows, conferences, concerts, etc.);
- Discount coupons or loyalty programs;
- Interactive tours in museums, with useful information;
- Keyless access and ignition for rental vehicles;
- Asking for information about products (price, ingredients, allergens, etc.) in retail stores;
- Access control to restricted areas;
- Reading electronic business cards;
- Smart home functionalities;
- Parcel tracking.
Conclusion
The short range of NFC is particularly well suited for micro-location, but not for full-fledged geolocation or geofencing applications.
This is precisely the point of Near Field Communication. Its deliberately short range makes it possible to target a specific payment terminal, information point or connected device. Users must hold their mobile phone over a predefined area, and in return they do not need to unlock it or manipulate its interface.
Pros:
- NFC is instantaneous and requires no effort from the user.
- Risk of data theft is minimized by its short-range operation.
- NFC uses less battery power than Bluetooth or Wi-Fi.
- No internet connection required.
Cons:
- Range is less than 10 cm (not suitable for geolocation and geofencing)
Beacon: A Serious Contender for NFC?
Beacons are small units that use Bluetooth Low Energy technology and periodically broadcast small amounts of data, allowing mobile apps to adjust their behavior.
Operating Principle: Bluetooth Low Energy
Introduced with the Bluetooth 4.0 specification, Bluetooth Low Energy (or Bluetooth LE) is a wireless transmission technology that consumes 10 times less energy than its traditional counterpart, for an equivalent data rate.
It cannot send complex data like, say, a Bluetooth keyboard, but it will provide information such as its identifier, its distance (or more precisely, its signal strength) and much more. The idea is to embed Bluetooth 4.0 in small-size portable units, which often operate on batteries and cannot be recharged: heart rate monitors, connected watches, remote controls, etc.
So What Are Beacons, Then? And What Are They Used For?
Beacon
Beacons are “smart” devices that broadcast a signal using the Bluetooth Low Energy communication protocol. They contain unique identification information:
- proximity UUID
- major
- minor
These are the editable values that make it possible to differentiate beacons. It is also possible to adjust the transmit power, which will define precisely the area covered by the beacon.
A beacon‘s first action is to announce its presence by sending this information. The unit will broadcast these data at regular intervals. Of course, the duration of these intervals will affect the unit’s autonomy and detectability. The goal here is to establish contact with several devices simultaneously, for example to detect a nearby location.
It is worth noting that a receiver can connect to multiple beacons simultaneously.
iBeacon
While it is often used to refer to beacons, the term iBeacon is actually an Apple trademark. Although Apple does not sell iBeacon hardware at this time, they do provide specifications (for are essentially Apple-approved beacons) that must be complied with to obtain the iBeacon certification. In short, the specification has more to do with brand use than with any modification of the Bluetooth LE specification itself. Therefore, any device with Bluetooth 4.0 (e.g., an Android smartphone) will also be able to communicate with an iBeacon.
Properties that are specific to Apple can be used to define whether a unit is an iBeacon.
Applications
A mobile app is required to respond to signals sent by beacons. Bluetooth must also be enabled on the receiving device (often BLE-compatible smartphones). Since iOS 7.1, Apple displays notifications even when the app is not launched (and not even running as a background task).
The key point to understand is that the mobile device will be in charge of detecting the presence of a beacon in the surroundings, but the way we want the user’s phone to respond is solely managed by your app. Basically, the beacon is only intended to announce its presence (via broadcasting) and it does not contain any application data, but only its identifiers.
Example 1: Detecting the proximity of a store
You walk past a retail store; your app is “woken up” when your phone detects the signal broadcast by a known beacon. The application layer then determines what action can be taken, depending on what it knows about you: for example, it can promote the latest pair of shoes, offer an exclusive discount if you enter the store now, etc.
Example 2: Finding lost keys
Many companies have embarked on the adventure of locating everyday objects: Tile, Ticatag, Wistiki, StickNFind… They sell discrete beacons which are also sometimes responsive (vibration, sound, light…), and provide the mobile app that helps you find your lost items (radar, virtual leash…).
Example 3: Using values from an iBeacon
Let’s walk back to our retail store, but this time let’s walk inside, where all beacons with the same UUID have been placed. The app can be set to respond differently depending on major values (e.g., the floor where the client is standing: womenswear, menswear, kidswear) and minor values (e.g., the specific aisle: shoes, shirts, costumes…). Here we can see that the beacon’s sole purpose is to broadcast its identity, and then the application layer figures out the user’s location and responds accordingly.
Conclusion
Beacons do not appear as real contenders for NFC but rather as a complementary technology that can be used where NFC is technically limited (geofencing).
Micro-location seems complicated to set up through beacons. There are currently no plans to implement payment processing through BLE beacons. Contrary to NFC, this technology has no ties with the banking industry. To be able to process payments via beacons, merchants would need to extend their accepted methods of payment (PayPal, iTunes, etc.).
Smart card payments are already very simple, well accepted and deeply rooted. Changing that is going to bring a lot of resistance. A new system will only be accepted if it is as simple as smart card payment and if it brings a real added value.
The most likely scenario we can imagine today is that NFC technology will continue to grow, in particular for payments and uses that have already been deployed, while beacons will complement NFC in areas where it is not relevant: geomarketing, information push, geofencing…
Pros:
- Receiving device battery life is extended thanks to BLE.
- Easy to set up and program.
- The risk of receiving notifications by mistake is close to zero.
- Range is up to 70 meters.
Cons:
- Usually requires an internet connection to match the identifier to information. (In some cases, the information can be stored in a mobile app.)
- Bluetooth must be enabled on the receiver.
- The range of beacons is not suitable for micro-location.
- There are currently no plans to implement payment processing through BLE beacons.
- Requires the installation of a tracking app.
Magnetic Positioning: The Future of Indoor Location?
Another solution that can be used to determine a location when no GPS signal is available is to look at magnetic fields and use them to draw a map of the building. Reinforced concrete and steel structures are but a few of the numerous modern building materials that have a characteristic magnetic fingerprint. Animals, and in particular homing pigeons and lobsters, are able to sense magnetic variations and use them to find their way.
Each building, floor, corridor or elevator shaft produces a distinctive disturbance. By reading these anomalies, the system can generate a map of the location. This is a very interesting technology in that it does not require any external devices and provides an accuracy of 10 cm. The researchers behind this project have founded a company, IndoorAtlas, and published an API for smartphones.
Operating principle
To enable positioning, the first step required is to map the building’s magnetic field using a smartphone with the MapCreator app installed. As the user walks around, the application is going to use the compass to generate a map of the building’s magnetic field.
The app will scan the magnetic fingerprint and determine the position.
The accuracy ranges from 0.1 to 2 meters.
Note: This location method is not limited to indoor positioning. It is possible to determine a position in the middle of the ocean using the International Geomagnetic Reference Field. This method is used by research teams to track fish migrations.
Applications
Magnetic positioning is mainly used to determine locations in public places (airports, railway stations, museums…).
Conclusion
This technology is not widely used at this time and its current applications are usually limited to positioning in public places. But the strength of magnetic positioning lies in the variety of possible uses. Its high accuracy makes it suitable for geolocation as well as geofencing uses, which can prove highly relevant for geomarketing applications.
If this technology keeps developing, it could easily overtake beacons.
Pros:
- No need for Wi-Fi or Bluetooth (standalone receiver)
- Accuracy
- Variety of uses (geolocation and geofencing)
Cons:
- Not widely used (few APIs, limited number of maps at this time)
- Takes longer to set up than beacons
- Usually requires an internet connection to match the fingerprint to the position. (In some cases, the information can be stored in a mobile app.)
Conclusion
So, after reading this overview, what conclusions can we draw?
| Géolocalisation | Geofencing | Micro-location | |
| Wi-Fi Positionning |  Very good, but limited accuracy |
 The accuracy is too limited for this use |
 The location provided by Wi-Fi does not allow any data exchange |
| NFC | The range of NFC is not suitable for geolocation |
 The range of NFC is too short for this use |
 Excellent |
| Beacons | Requires a very large number of beacons |
Beacons remain the most suitable technology for geofencing |
The range of beacons is too high for this use |
| Magnetic Positioning | Accuracy is excellent |
Very good, but not widely used and longer to set up than beacons |
The location provided by the magnetic field does not allow any data exchange |
Wi-Fi Positioning remains the most widely used indoor location method. Yet this technology is not extremely effective and it requires a Wi-Fi-enabled device. Magnetic positioning, which is more accurate and less restrictive, seems able to get the upper hand.
NFC is the great winner when it comes to micro-location and contactless payment. This technology has the advantage of being already well established, and beacons are unlikely to take the crown.
Beacons are currently the most widely adopted solution for geofencing. This technology is particularly well suited to define perimeters and it can be used for a wide range of marketing applications.
Magnetic positioning is a powerful geolocation solution and its high accuracy also makes it suitable for geofencing. It is this double functionality that makes it a highly interesting technology. Although few businesses seem to bet on this technology at this time, it seems to be the most promising one, and the one that covers the most use cases.
