Apple, Bluetooth headphones and the path to beacon uptake in retail

September brings with it a highly anticipated event in the technology calendar – Apple's yearly iPhone launch. Nearly a decade after the technology giant first unveiled the iPhone in 2007, consumers and businesses alike still eagerly await to see what innovative technology Apple is set to reveal with its latest handset, and this week it was the iPhone 7.

Along with a significant upgrade to the camera, better battery life and a new ultra-haptic home button, Apple decided it was time to get rid of the 3.5mm headphone jack. While this wasn't a complete shock – many blogs had been reporting the rumours for months – it has still divided the Apple fanboys, who now have to rely on the device's lightning charging point or wireless technologies to personally listen to audio.

Many argue this drastic measure is all in the name of innovation and the development of technology. And when Apple does something unusual, people still follow the company and buy its devices like a flock of sheep. When it removed the anamorphic design in an operating system upgrade a few years ago, it left customers disgruntled, but a few months later they had forgotten there was ever a problem.

"The colourful iMac (Steve Job’s first major product announcement) was the beginning of the end for the floppy disk drive, cast aside in favour of USB ports. And the 2008 MacBook Air sacrificed the CD drive for a sleeker, lighter design," agrees David Philippson, MD of mobile solutions at real-time digital advertising company, Criteo.

"Apple has a history eliminating ports which, while widely used, are perhaps nearing the end of their lifecycle given technology advancements," he explains. "While change will always bring about mixed consumer sentiment, it’s usually all in the name of progress. The future is increasingly wireless, but connected."

And indeed, the 3.5mm jack is an ancient piece of technology by Apple's standards, as CCS Insight's mobile analyst, Ben Woods, tells Essential Retail.

"We may think Apple's moves are incredibly frustrating, but it will revolutionise headphones because the 3.5mm jack is an old piece of analogue technology."

He points out that Apple is not the only mobile manufacturer to have called time on the jack, Motorola's Moto Z devices switched the technology in favour of a sleeker handset over the summer.

"Inadvertently, and by design, Apple is starting a new chapter in headphones," adds Woods, noting how Apple bought the popular Beats headphone manufacturer back in 2014.

Sympathising, Somo's CTO, Dave Evans, adds:  "Change is often painful but a change is required to move forward."

Bluetooth advancements

While consumers have the option to buy an adapter for their current wired headphones, reports claim it is clunky and unattractive, unsurprising as Apple wants people to buy its £100+ wireless headphones.

So if consumers want to be liberated of wires, they have the choice of Apple's wireless AirPod headphones – which use proprietary connectivity allowing users to seamlessly switch between their Apple devices – or many of the Bluetooth-enabled headphones already on the market.

The iPhone 7 is not even available yet, but a day following the Apple launch, John Lewis reported a 60% week-on-week increase in the sales of wireless headphones.

Katrina Mills, buyer audio and smart home at John Lewis, said: “The announcement will drive the biggest sales in wireless headphones yet. Ahead of the news we had already seen an increased demand for wireless headphones, with noise cancelling functionality and sport models proving popular."

According to the department store retailer, 58% of headphone sales are now wireless, compared to 21% last year. Bose headphones in particularly are flying off the shelves, with an increase in sales of over 260% compared to last year.

The Bluetooth wireless technology standard was first invented in the '90s and was thought to significantly drain a handset's battery, which has seen customers, even today, turning off the function to save power.

But Somo's Evans says this is no longer the case. "Bluetooth LE (Low Energy) is lower power consumption than Wi-Fi, and previous Bluetooth protocols. Bluetooth has become a commodity with little differentiation particularly around the user experience. Apple's strength is in bringing together the complete user journey by controlling hardware and software – and they are doing this in the audio space," he explains.

"People will leave Bluetooth on as more devices communicate via Bluetooth - for example Apple Watch to iPhone to Beacons - so that the end user sees value from enabling it at all times."

But what does this all mean for retail?

So the more devices in a consumer's ecosystem requiring Bluetooth means the standard is likely to be left on as they go about their daily lives – like many do today with Wi-Fi.

Criteo's Philippson believes this could have a positive knock-on effect on retailers deploying in-store beacons. "For retailers considering deploying Bluetooth-powered beacon technology, the high-profile retirement of the traditional headphone connectivity method is a step in the right direction," he says.

"It will mean a brand new consumer ecosystem of users whose accessory choice is built on Bluetooth. While Apple’s own AirPods use a different wireless connectivity method and the 'Lightning to mini-phono-audio adapter' won’t have everyone rushing to ensure their Bluetooth is on just yet, for retailers, this could be just the bolt the industry needs to start thinking seriously about joining online and offline consumer behaviour."

Phillippson says we could be at a turning point when it comes to in-store beacon adoption, which allows retailers to connect to shoppers' devices in order to match on and offline data, as well as adding value to their visit.

"If a particular trip doesn’t result in a converted visit to the checkout, the marketing department has everything it needs to begin online targeting," he explains. "Conversely, with the smartphone sitting at the heart of the modern consumer’s shopping experience, brands can quickly ascertain when online browsing turns to in store buying thanks to Bluetooth powered beacons. This process works both ways. Understanding a user’s online interests and behaviour can be used in combination with location data to drive highly qualified incremental footfall in to physical stores."

But he describes how, until now, barriers to wide-scale beacon usage have been based on concerns around consumer engagement. "With smartphones sitting at the centre of consumer shopping today, Bluetooth is perceived to have a detrimental impact on battery life, restricting its use. However previous concerns around Bluetooth are disappearing fast and Apple’s decision to eliminate the headphone jack is likely to create a new generation of consumers built on Bluetooth connected accessories."

And it is not just the lack of headphone jack which is encouraging customers to switch on Bluetooth.

"Another major announcement from the Apple press conference was the launch of the new Apple watches," concludes Phillippson. "Wearables are doing as much as anything to increase the number of Bluetooth connections out there as the notion of the connected self becomes a reality."

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