SUPERMARKET giant Woolworths is quietly trialling beacon technology that will notify selected shoppers of special offers or product updates on their smartphones while they walk through shopping aisles.

The trial is restricted to people who were chosen to participate in the pilot. Customers not in the pilot will not be affected by the technology.

The beacons are small, low-cost location-based devices that use Bluetooth to communicate with other devices. In the retail sector, customers usually opt in for the service. Beacons work within a 100m radius and are usually discretely placed on shelves where they gather and beam information to customers.

Woolworths declined to comment, but it is understood that it recently began testing the technology with ­iPhones at its new store in the eastern Sydney suburb of Double Bay.

It is unclear how many people have participated in the trials but the technology’s potential has ­excited many retailers overseas.

Sweden’s two largest supermarket chains, ICA and Coop, are investigating the technology and British supermarket chain Waitrose has begun trials to offer targeted discounts.

St George Bank was one of the first financial institutions to trial iBeacons at its Sydney branches.

Infosys Australia digital strategist George Eby Mathew said the biggest potential for beacon technology in retail was powerful in-store analytics that can be obtained from customer data.

“(This) is in addition to driving store traffic, enhancing customer service and delivering product-based offers,” Mr Mathew said.

He said the data could ­influence how storefronts were ­designed. Once retailers could determine when customers were walking into their stores and what purchases were being made, they could link the information with demographics and historical data.

“That becomes a rich insight not only to design your storefront but also to decide on what combination of products to stock and when,” he said.

Mr Mathew said the biggest investment from retailers would be in “educating the customer to the new capability and commun­icating the value proposition” of the product benefits or discounts.

He said beacon technology had the ability to help deliver a “killer app” for the retail sector.

“Say I go into a hardware store looking for a particular sized box of screws. If the technology can help me navigate to the correct aisle that would be a big bonus,” Mr Mathew said.

“Giving customers the ability to find the products and services within a store and using that intelligence to design your store — that combination is a killer app.”

The beacon concept isn’t new but was made popular when Apple introduced its iBeacon.

In the past organisations tried using radio-frequency identification tags to achieve similar results but it was a costly exercise. “You wouldn’t want to stick a $3 RFID tag on a $1.50 loaf of bread,” Mr Mathew said. “Now you only need a couple of pieces of hardware along the aisle to track phones.” He said beacon technology could be used for “auto-checkouts”.

“If I buy five items, there could be a prompt on my mobile app that asks if I want to buy an item,” he said. “Saying yes would place the item in the shopping cart.”

Once all five items are done, instead of having to pay or scan each item at checkout, the customer can just pay and leave.

Infosys works with beacon providers Gimbal and Estimote but does not have any active customers in Australia, although Mr Mathew said there was keen ­interest from the financial sector.