Apple's Grand Central store is easily one of the most beautiful retail locations you'll ever see. It's also a place where you can now walk in, pick up a boxed Apple TV device, buy it and walk out without ever talking to an Apple salesperson or even visiting a checkout counter. It's possible, I've seen it done.
The process starts with iBeacon, Apple's Bluetooth LE-based technology that is finally starting to pop up in its stores and with partners like the NFL, which used it on SuperBowl Boulevard in New York City and the MLB, which is launching it on its At the Ball Park Bat app this baseball season at more than 20 stadiums.
Apple quietly introduced iBeacon last year during the World Wide Developer Conference that served as the launchpad for iOS 7. Sources tell me that while the feature was little more than a label on one of the many screens shown during the keynote, interest was high. Now, nearly a year later, it looks like iBeacon is poised to change the way iPhone owners interact with stores, parks, venues, museums and more.

At the heart of iBeacon is Bluetooth LE or BLE. This low-energy Bluetooth variant allows two-way communication between devices (when within 30 feet or so of each other) and offers the added benefit of needing very little energy to work (one beacon can reportedly run unattended for up to three years).
Apple's iBeacon relies on that communication technology to help enabled iOS apps communicate with strategically placed beacons so they can alert you to things like "your package is ready for pickup," "that painting you're looking at is by Da Vinci" and "you can buy that Apple TV" right here. Apps are a key component here, since, the beacons will not simply communicate with an iPhone and start delivering unwanted messages.
If you want to use iBeacon in Apple's Grand Central Store, for example, you still have to download and install the Apple Store App and then make sure location services and notifications are turned on. I installed the app on my iPhone 5S and soon my Apple Store App had a whole Grand Central Store dashboard. It included the barcode-based "EasyPay" system, "Get Help" and "Get Support," which would let me schedule a Genius Bar appointment from within the store and alert me with a phone sound and vibration when my Genius was ready for me. It also had a bunch of date/time and context-specific messages and opportunities from the Apple store, including one about buying an iPad Air for my valentine.

Apple has actually placed Bluetooth LE beacons throughout the store. So in addition to the one that noticed I had arrived at the Grand Central Shop, there was another that saw my phone when I walked into the accessories area. A notification (no buzz or sound with this one) asked if I was shopping for accessories and told me I could read product reviews and make purchases through my phone.
This all seemed smart and intuitive, but it could creep people out.
My sources tell me it's important to remember that these iBeacons are not collecting any information from your phones beyond what you choose to share. Their role is to see that you are there and then start delivering helpful information. They are not connected to the Internet.
In fact, the EasyPay purchase we made happened through the phone. We started by using the iPhone to scan the product barcode and then we had to enter our Apple ID, pretty much the way we would for any online Apple purchase. The one key difference was that this transaction ended with a digital receipt, one that we could show to a clerk if anyone stopped us on the way out.
Obviously, Apple is a big company with the wherewithal to install these Bluetooth LE beacons and build the app to make it all work. However, small businesses may be able to take advantage of the technology, as well. Since the iPhone 4S, Apple has been building Bluetooth LE into its devices. The same iPad Airs small businesses are using with Square to conduct transactions can simultaneously be used as Bluetooth LE proximity beacons.
The rise of Bluetooth as a location-aware technology is somewhat surprising since most people see GPS as the location leader and NFC as its heir apparent in the up-close, "I'm here, how can you help me" space. However, the limitations of each technology have left the door wide open for Bluetooth LE.
GPS is accurate to within a few feet, but it does not work indoors. So while your phone can know that you're standing right outside your local Best Buy, it loses track of you as soon as you go inside. NFC works well when two devices are very close to each other, but is useless for larger areas. There's also the fact that iPhones lack an NFC chip. With the emergence of iBeacon, it's unlikely they'll ever get one.
NFC was supposed to be the way we made transactions. Numerous Android and Windows Phones have built-in NFC in anticipation of just such a day. Yet consumers have not warmed to the idea of maintaining all their credit cards inside their phone or inside one consolidated digital credit card and, while it's not uncommon to see someone use their phone as a boarding pass, few consumers are waving their phones over payment machines.
Longtime Apple watcher and industry analyst Tim Bajarin, president of Creative Strategies, thinks BLE is a "real threat to NFC." He told me that BLE and NFC share a number of core features and, "if Apple uses iBeacon for transactions it could have a domino affect on others who could follow their lead."
With iBeacon and Bluetooth LE, Apple may have created a far more palatable and more passive way of paying digitally, especially since it relies on a payment method iOS customers already know. And because Apple has been supporting Bluetooth LE in its devices since iPhone 4S and iOS 7 has, according Apple's App Store analytics, an 80% adoption rate, iBeacon could have almost instant ubiquity, at least for Apple customers.
It's also worth noting that Apple is not the only tech giant supporting Bluetooth LE. Qualcomm developed a line of BLE beacons, including its Gimbal Proximity Beacons, which have been "designed and certified by Qualcomm Retail Solutions, Inc. to meet Apple performance standards," and will work with any iBeacon-enabled apps that arrive on the iPhone, iPad or iPod Touch.
Many Android phones, including the popular Samsung Galaxy S3, the HTC One and and the Samsung Galaxy S4 support Bluetooth LE, as does Android's latests iterations Jelly Bean (4.3) and KitKat. As of November of last year, roughly 50% of Android devices are running Jelly Bean (only 1.8% of current Android device owners are running KitKat, but that version is just a couple of months old). There's no reason to assume Google and Android can't catch up, but if Google wants to deliver its own seamless connection between digital and brick and mortar, it may want to rethink its devotion to NFC.
Will consumers embrace Apple and iBeacon's nearly frictionless in-store buying process and "I'm aware you're there" in-store experience?
Rob Garf, VP of Industry Strategy & Insight for Demandware, a digital commerce company said it depends on what's in it for them. "Consumers will embrace technology if there is material value such as greater convenience, service and personalization," he said. Garf added that though adoption can vary by segment and geographic location, digitization of the sales experience may be inevitable: "Over time much of the checkout will be via virtual point-of-sale on the sales floor.”