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The introduction of beacons technology has revolutionized the adopters’ operations by driving a new level of customer engagement through personalization. The growth prospects can be attributed to the surging eminence of location-based marketing in the retail industry. Combining the benefits of physical shopping experience with digital ecosystem has become important for brick-and-mortar retailers. Moreover, investments in proximity solutions are witnessing an upward swing, thereby reducing their marketing and advertising costs.
The Bluetooth industry has undergone a transformation in the recent years, leading to growth and maturation of the beacons industry. Bluetooth is replacing legacy technologies such as Near Field Communication (NFC) and ZigBee to strengthen beacon solutions. The beacon industry is adapting to accommodate more complex industrial applications. As the initial applications were limited to retail and marketing, the industry is expected to move toward a fragmented market where beacons can specialize in a particular industry vertical.
Furthermore, as beacon solution providers are becoming stable to provide a steady stream of products, several new players are turning toward software solutions, leaving infrastructure and hardware for a relatively smaller group of companies. This industry fragmentation is pivotal to the beacons growth as upcoming beacon products require more nuanced solutions.
The iBeacon technology dominated the industry in 2016. This growth can be attributed to the need for providing location-based alerts and information to nearby smartphones compatible with the iBeacon protocol. The widespread adoption of products, such as iPads and iPhone, is expected to propel the segment growth over the forecast period.
Furthermore, iBeacons facilitate proximity-based marketing to target customers with personalized messages based on their purchase history. The growing prominence of iBeacon has led to the introduction of several new protocols such as Eddystone and AltBeacon. Moreover, unlike iBeacon, the open source framework of these protocols is expected to drive the industry growth over the next few years.
The retail segment captured a revenue share of over 65% in 2016 owing to increasing beacon deployment for enhancing customer experience. Retailers are engaged in improving customer experience by installing in-store beacons to send promotional messages, thereby boosting their sales and efficiency. Bluetooth beacons offer great opportunities for brick-and-mortar retailers as compared to online retailers for increasing their profit margins.
Brick-and-mortar stores are leveraging technologies such as big data and Bluetooth Low Energy (BLE) to achieve higher conversion rates and greater operating efficiency. For example, Carrefour has deployed an extensive network of iBeacons in all its hypermarket chains in Romania, which monitors consumer behavior and keeps them informed about the products from each department.