Retailers Testing, But Have Not Yet Embraced, iBeacon

By Christine Kern, contributing writer

Biggest Obstacle Remains Consumers

Earlier this summer, predictions were positive that Apple’s iBeacon would take off.  Venture Beat reported that the ubiquitous iBeacon is Apple’s portable, low-cost transmitter that notifies other iOS 7 devices of its presence, and that it had won raves because of its low power signatures and rapidity of sending push notifications to Apple hardware like the iPhone, iPad, and even iPods.

This is significant, because while Android OS’s can receive adverts from iBeacons, they can’t transmit them. With Apple adding souped-up attribution features in iOS 7.1 recently, the word on the street is that Apple will harness the full spectrum of their power in the mobile ad space.

So, many were primed to see the universal expansion of the iBeacon.  So why hasn’t it happened?

Bloomberg Businessweek explores why Apple’s iBeacon isn’t more widely used.

For the most part, stores have yet to embrace Apple’s technology. “Retailers are just putting their toes in,” says Owen Geddes, chief executive officer of startup Appflare, which sets up iBeacon networks for merchants. He says there have been a lot of announcements by retailers that they are trying out iBeacon networks in a handful of locations, “but the reality is, very few of them have been deployed.” Less than 1 percent of the 3.6 million retail stores in the U.S. make use of iBeacon, says Mark Hung, an analyst at market researcher Gartner.

The main obstacle for retailers is that iBeacon is not independent.  It requires shoppers to download apps such as Epicurious or discount service Shopkick that have incorporated the tracking technology. Many consumers don’t consult shopping aids while they’re in the store, and, according to Adam Silverman, an analyst at Forrester Research), “Those apps are gimmicky.” He adds, “The retailers haven’t yet deciphered what customers want.”

Apple’s design also wasn’t the first indoor location-tracking system available. Many businesses are experimenting with other technologies, including Motorola Solutions and Datzing beacons that use both Bluetooth and Wi-Fi signals. “I wouldn’t say it’s a clear winner at all,” Derek Top, an analyst at Opus Research, says of iBeacon. Shopkick is among the startups that combine Apple’s system with their own ultrasound technology to increase its accuracy.

So although Apple has a number of big names dipping their toes into the iBeacon pool, most have not adopted it completely.  Among the trial runs are Macy’s use of  beacons in two stores that push product recommendations and discounts to Shopkick users; Lord & Taylor campaign in 10 stores with coupon app SnipSnap.; and Starwood Hotels & Resorts, which  is trying out iBeacon in 30 hotels to help concierges greet arrivals by name.

Some obstacles to iBeacon adoption are being removed.  For instance, Google has built more iBeacon functionality into the latest versions of Android, and  GE Lighting has partnered with startup ByteLight to develop light bulbs that can also help track shoppers via iBeacon, eliminating the need for retailers to buy separate hardware. More companies are curious.

 “We have half of Fortune 500 developing with us,” says Steve Cheney, a senior vice president at startup Estimote, which designs hardware and software to work with iBeacon. There is just one major group of holdouts to persuade: shoppers.