7 proximity trends

These are the proximity and beacon trends you should know about in 2016

December 18, 2015

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Proximity liberated from the application

With the release of iBeacon from Apple it has been a prerequisite to use an app to receive beacon signals, and not all retailers and brands have well functioning app products, limiting the scalability in proximity. When looking at NFC, although not demanding an app, it is only available on Android as of today while the industry waits for Apple to open up NFC beyond Apple Pay. To remedy the app limitations from the iBeacon standard, we see that the so-called “super apps” are growing in importance. These are apps that many have already, and that transcends a specific physical location, like e.g. Shazam.

However, app liberation is on its way, with the recent release of the Eddystone beacon standard from Google.

Opposite iBeacon, Eddystone allows web pages to be opened directly from a beacon interaction, bypassing the app. This feature is currently supported in the Chrome and Opera browserbut expect to see massive increase in adoption of Eddystone in 2016.

Also read: The growth of Eddystone vs iBeacon from Proxbook Report Q3 2015

Proximity as a platform

The typical use case in 2015 has seen the proximity platform and CMS existing outside the core platforms of the clients. This is only natural as one seeks to minimize risk in a early phase of a project, but we se a clear trend of that changing. With the value in proximity being increasingly proven, we see a parallel increase in desire to include sensors and proximity in existing CMS and CRM systems.

For PSPs this means that a competitive edge in 2016 will involve flexible and well-documented API’s that maximizes the effect and minimizes the work when integrating legacy systems with these new functions.

Another clear trend is that the proximity platforms themselves are including more functions, and are in effect becoming full communication platforms, where proximity push and analytics live side-by-side with email, social, SMS and online retargeting. Omni-channel is not longer an empty word.

Also read: The 230 proximity companies in Proxbook and the products they offer

Increased fragmentation in the proximity industry

The proximity industry is already a fragmented one, with over 350 PSPs divided between a substantial amount of geographies and verticals. We expect this trend to only continue due to the (still) low barrier of entry (the cost of hardware is going towards zero), the physical aspect of installing sensors (you simply don’t send 10.000 beacons by post and let your clients install themselves), and the different demands from different verticals.

It is hard to be precise on the amount of PSPs in market at the end of 2016, but we would not be surprised if the number was close to 500.

With over 230 companies already signed up to Proxbook, we will get a pretty accurate final verdict in Proxbook Report Q4 2016.

Download for free: Proxbook Report Q3 2015 for the latest updates from the proximity industry

Focus on quality of proximity data

Not all data is created equal. The potential for a rich understanding of physical behavior and intent is one of the core strengths of using sensor technology like beacons, but that potential is not always maximized. Far from it. As the Backend of Proximity we see first hand the level of sensor and interaction data quality from various partners, and it varies greatly. From no tagging of data at all, to poorly tagging, to wrong tagging. This lack of quality of course limits the ability to find matches with relevant online data, but also restricts more advanced segmentation and analytics in the sensor CMS itself. The more advanced PSP will increase focus on this aspect in 2016, and we will assist them by launching new taxonomy products.

Proximity retargeting as main goal

Historically (if one can use such a word in a new industry) a retailer or brand that invest in sensor technology has done so to focus on in-store communication via push messages and in-store analytics. That is quickly changing.

As both the clients and technology matures, there is an increased sense of the value of the data itself.

By working with over 30 proximity companies and operating Proxbook we have a unique insight into RFP processes around the globe, and close to 50% of them are now primarily or partly focused on the retargeting perspective, and might not even include push notifications at all. This is a trend we expect to see increase in 2016. By connecting these granular and highly contextual data sets to online domains, retailers and brands can greatly increase their effectiveness in online marketing and therefore reduce overall cost. Suddenly a proximity deployment goes from money spent to money saved – and potentially also a future income source.

Increase in proximity use case variety

The applications of sensor technology and proximity deployments are really only limited by the imagination, and besides the increasing amount of use cases revolving around in-store communication and online retargeting, we see new application areas appearing daily.

The proximity industry, if you zoom all the way out, really signifies that the world is “being sensored up”, and just like digital data has formed the basis for millions of digital products, so will physical data.

We have already seen projects helping blind people navigate subways in London, companies that aim to trigger relevant video, audio or written content by precise location and notification apps that let you tell your car to remind you to buy milk as you get in. At Unacast we even built a system that plays the theme song of each of our employees as they come to work in the morning – just for fun. 2016 will be about letting these creative juices flow more freely.

Also read: The many uses cases presented in Proxbook

Proximity security as a demand

With more and bigger proximity projects being deployed, often in locations where secure communication already is the gold standard (like in airports), a high level of security around the chosen sensor technology is necessary. This demand will of course come from the clients directly, but also from within the industry itself as a large-scale security breach would greatly damage the credibility of the fast growing proximity industry. A sufficient level of security typically requires advanced fleet management, rotating sensor ID’s from the cloud and the ability to remotely wipe the systems if tampered with. At the end of the day it is about trust, and 2016 will be all about winning and keeping that trust.

Do you see trends that are not mentioned here? If so, please add to the discussion below.