Is It Time for Us to Stop Caring About Real-Time Personalization?

In July, Krista Garcia visited three retail stores hoping to receive real-time, proximity-based messages on her phone. Her aim: to test out beacon technology, the retail marketing advancement that allows stores to deliver real-time offers and content to shoppers’ phones.

Even knowing about beacon technology put Garcia ahead of 70 percent of consumers who, according to a recent First Insight survey, don’t know it exists. She researched which stores offer beacon messages, downloaded various apps and turned her Bluetooth on before venturing out. And yet, despite all that special knowledge and effort, the eMarketer analyst only received one message while visiting three different retailers.

How is beacon-based marketing going with retailers? According to Garcia’s new eMarketer report, “Beacons for Retailers: Beyond the Hype,” not so well. Despite two years passing since the launch of Apple’s iBeacon, “Consumer interest has barely managed to rise above indifference,” she writes, “and most retailers are still in the experimental phase.”

But hold up—Google’s beacon, Eddystone, was just released in July. And both Facebook and Twitter are getting into the beacon game too. Is it simply too soon to say beacon-based marketing is a dud?

The hype gap

The eMarketer report doesn’t cite hype in its title for nothing. Expectations for the impact of beacons on retail marketing have been huge since the launch of iBeacon. In late 2013, estimates anticipated up to 250 million beacon units would be out in the world, communicating with nearby iPhones, by 2014. In reality, reports eMarketer, a conservative estimate showed 64,000 beacons in place in March. “Notably,” writes Garcia, “14.5 percent of the detected beacons were found in Apple stores.”

But that’s not stopping beacon marketing companies like Swirl, a company that helps brands integrate beacon technology into their apps, from keeping their own expectations high. It’s not necessarily that retailers aren’t jumping onto beacons, says Rebecca Schuette, Swirl Networks’s director of marketing, it’s just that it’s too soon to get accurate information about their efforts.

“Retailers are figuring this out, and therefore they are not publicly talking about their deployment,” Schuette says. “We’re working with retailers all the time that have started in a pilot phase.”

The research bears that out to some degree. An eConsultancy and Adobe study found that among five industries, while retail had the lowest usage of geotargeting technology (including beacons) for location-based notifications at 8 percent, the industry had the highest percentages for both having plans to use beacons (27 percent) and actively exploring but not yet implementing the technology (40 percent). In short, everybody’s talking about it. But few are doing it yet.

The entrance of Eddystone

After two years of tepid responses to iBeacon, the big—and unsurprising—challenger to Apple is none other than Google. In classic Apple/Google rivalry fashion, iBeacon has been proprietary and closed, and Eddystone is open source and cross-platform. In the case of beacons, the Google format could be the game changer.

“We’re really viewing this as yet another stamp of approval from a major player in the industry that beacons are here,” says Schuette, “and they are going to continue to impact, not just the retail industry, but general consumer life.”

And that’s just it: Eddystone might be a big deal for beacon technology in general, but perhaps not a direct shot in the arm for retailers. That’s because the more accessible Eddystone is about far more than getting timely toaster deal while standing in the home appliance aisle. It’s technology could allow proximity-based communications to be leveraged in myriad ways, from better public transit info to helping travelers locate their luggage to passively tracking consumer behavior.

“Eddystone’s other big differentiator is that it supports multiple ‘frame types’—basically data payloads—that can perform a variety of functions,” reports Ars Technica. “Previous solutions from Apple (iBeacon) and Google (The Physical Web) have only served one purpose.”

The good news for retailers: These applications will likely make consumers more aware and accustomed to beacon technology and the IoT at large.

The sticking point: consumers and retailers

Today, however, those barriers still exists. And of all the wonders the IoT has to offer, marketing messages from retailers may not be the incentive to scaling them.

“From a consumer standpoint, using beacons is sort of a hassle, when it involves downloading and installing an app that doesn’t relate to the users’ lifestyle,” says Kim Stuart, COO of Atlas Rewards Corp, a mobile wallet marketing services vendor that leverages beacon technology. “Most companies fail to realize that spending the money to create (and then support) an app is a fruitless enterprise on their part [because] they don’t have a user base that’s large enough to make it worthwhile.”

In other words, if consumers have to download an app for every store, that’s a lot to ask.

That’s why Swirl is building a third-party network of mobile apps that consumers are already using—like RetailMeNot—and allowing brands to send real-time messages to those users.

“It’s not realistic to think that a shopper is going to download every single retailers’ app,” Schuette says. “That’s not a scalable solution. So tapping into these third-party mobile app networks is really, I think, how beacon adoption is going to take off.”

Stuart likens beacon technology to the early days of the Internet, websites, and mobile-friendly web pages. “If [retailers] don’t invest in the technology, they’ll be left behind,” she promises.

The promise of Google’s Eddystone and the IoT, as well as investments by Facebook and Twitter investing in beacon technology, does imply that beacons may be coming in a big, paradigm-altering way. It still looks like it will take time, forever, for beacon-based marketing to live up to the hype.