Hari Gottipati, an independent tech consultant, saw the future of shopping in 2013. In its annual update to the software for its mobile devices, Apple had just made it possible for its phones to allow super-precise location services, and that would be a major coup for the staid world of coupons.
While the global positioning system on your phone could reveal a particular store's location closest to you, this new technology would go much deeper. Advertisers would be able to determine exactly which aisle you are in. A merchant would need only beacons capable of communicating with the Bluetooth Low Energy technology on an iPhone, and shoppers would almost magically receive cereal coupons for the very boxes they happened to be viewing at that moment.
Consultant Gottipati advised retailers to get on board. Two years later, it doesn't look as if many stores took his advice.
"I go to a lot of malls, but I don't see as many beacons as I expected," he said. "It's very disappointing."
As holiday shopping officially kicks off, many people who shared Gottipati's enthusiasm two years ago echo his disappointment. A survey conducted by Forrester earlier this year found that only 3 percent of retailers use beacons; just 16 percent had plans to try the technology in the foreseeable future. When Reveal Mobile, an analytics company, did a census of beacons in U.S. retail stores this spring, it found that Apple's own stores accounted for about 15 percent of the existing beacons.
Companies that sell beacons and related services to retailers struggle to point to big success stories, even as boosters insist that the technology is on the verge of success. For the people who run start-ups such as Shopkick, InMarket, or Estimote, which are based on bets that beacons will soon be everywhere, the issue is more expectations than results. Sure, the start-ups admit, it's been slow going, so far. But over the summer, both Facebook and Google announced new programs for their own beacons, joining Apple as tech giants behind the technology.
"They're not ubiquitous yet, but they will be ubiquitous in a couple of years," said Todd DiPaola, chief executive of InMarket. "Facebook shows this isn't a fad."
Part of the problem, in fact, might stem from Apple's association with the public introduction of beacons. Steve Cheney, co-founder of Estimote, would prefer that everyone see Apple's iBeacon effort as a mere developer protocol, not a finished product to transform shopping. "People associating it with Apple expected it to work out of the box, so to speak," he said. "It is happening about the pace we expected."