Technology of the Week- NFC vs. BLE


One of the most important trends within B2C e-commerce is its offspring mobile commerce, also known as m-commerce. Only in the U.S. this market has grown with 19% during the last four years.

Within both B2C e-commerce and mobile commerce Near Field Communications (NFC) and Bluetooth low Energy technology (BLE) are trending technologies. Whereas NFC technologies are already in a more mature state, the BLE technology is still in its infancy.

What are NFC and BLE?

Both of them are wireless communication technologies currently installed in a lot of smartphones.

NFC

NFC smartphones communicate with wireless transmitters in very close proximity. They are usually a one on one experience, meaning that one transmitter (the NFC tag) communicates with one phone at a time. The transmitter can be a NFC tag positioned somewhere in a store or other place. Upon tapping your phone onto the tag, the tag recognizes you phone and interacts with it. Possible applications are as follows:

  1. Smart device automation and NFC tags:
    1. Transportation passes
    2. Event ticketing
    3. Access cards
  2. Smart homes
  3. Data sharing (retail marketing)

NFC is also being used as a technology for cardless payment but seems to be slowly replaced by the BLE technology. One of its greatest weakness is the increased power usage of smartphones.

BLE

BLE smartphones communicate via Low Energy Bluetooth in distances up to 100m. It is a one to many experiences, where the phone detects the beacon and triggers an app that then communicates with the user. The Beacon is the size of a matchbox and can also be placed in any position. Contrary to the NFC tag the two devices interacting do not have to touch, thus allowing the user to leave the smartphone in their bag and out of reach while still interacting. Following markets serve as an opportunity:

  1. Retail, B2C marketing:
    1. Indoor positioning system
    2. Contactless payment
    3. Advertising
  2. Smart homes
  3. Industrial applications

The greatest threat of the BLE technology in retail is the threat of “overbeaconing“ the customer. Research has found that 45% of users being beaconed once were interacting with the app. In the contrary, companies that beaconed their users twice during an experience (e.g. one shopping trip) saw a 313% drop in app usage.

An outlook into the future

Gartner

Looking at Gartner’s Hype Cycle, it can be said that the NFC technology is expected to soon reach the plateau of productivity in Gartner’s hype cycle. This will mean within 1 to 4 years the technology will be widely implemented and well known amongst its users (Gartner, 2014). The Beacon technology as a sub-part of the Internet of Things is depicted at the peak of inflated expectations (Gartner). However we believe the technology is still exploring its possibilities and hence is still very much in its infancy (TechCrunch, 2015). Hence beacon technology is yet to reach the through of disillusionment before approaching the plateau of productivity. At this moment early adopters are implementing the Beacon technology. In the near future the focus will shift from the possibilities of the technology to the failures and flaws the technology possesses.

All in all we believe that both applications will establish a market and serve as a great opportunity to make e-commerce more efficient.

Team 14:

Jepma 367048bj, Lei 365616ml, Müller 371369dm, Penot 371082fp, van Rijn 355921ir

LeHong, Hung, and Alfonso Velosa. ‘Hype Cycle For The Internet Of Things, 2014’. Gartner.com. N.p., 2014. Web. 19 Sept. 2015.

Loiwal, Navneet. ‘The Potential Of Beacon Technology’. TechCrunch. N.p., 2015. Web. 19 Sept. 2015.

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