iBeacon uses low-power Bluetooth to determine your location indoors.
One example of how the technology works is that if you’re standing in front of an Apple Store’s iPhone display, you might get a message asking you to upgrade your iPhone (along with details on your upgrade status). Another example is you might be sent a special deal related to products in the store nearby.
Users first have to give Apple permission for the app to track their whereabouts in the store.
Apple is partnering with other retailers to bring iBeacon to their stores as well.