Proximity Marketing in 2019 and the market forecast for 2022

Proximity-based marketing isn’t a new concept. It has been around for decades. Whether it’s giving out flyers in the busiest part of the city or hiring a sign spinner to drive sales, it has always relied on location-based marketing.

With the dawn of the World Wide Web, marketers were able to target consumers using their IP address. Along with IP targeting, marketing strategies were also expanded to mobile devices, but location accuracy was a major issue.

The game changed in the 2000s when smartphones took off and GPS, geofencing and geo-targeting came into the picture.

What has changed since the inception of proximity marketing?

In 2013, Apple ventured into beacon technology, introducing the iBeacon protocol. The only limitation? Users need to have the relevant app installed. Google’s competing Eddystone technology that debuted in 2015, can trigger URLs and web pages directly without an app on Android

UPDATE: Nearby Notifications will no longer be supported on Android smartphones after December 6 2018. Please read this blog post to understand how you can continue running proximity marketing campaigns through beacons

NFC and QR codes once thought to be dead have gotten a new lease of life and we have Apple to thank for that. The latest iPhones support third-party NFC tags without an additional app and with the iOS 11 update, all iPhones can natively scan QR codes.

Android smartphones are already compatible with NFC and you can find the complete list here. The latest Android smartphones can also scan QR codes without an app.

Explore NFC and QR code proximity marketing use cases

What is Google’s Eddystone technology and how does it work?*

The Eddystone protocol designed by Google did not need of having an app on Android phones. This is a game changer. Not requiring an app to receive notifications allows marketers to target a much wider audience. All that is needed is an Android phone. There is already an in-built service called Google Nearby that scans for Eddystone signals and displays the message tied to that signal. Apps that are compatible with Physical Web can also do the same. 

*Since Nearby Notification is effectively shutting down, you can switch from Nearby to NearBee in a few simple steps whether you have Beaconstac beacons or not.

So, why should you hop on the proximity marketing bandwagon now in 2018?

1. Hyper-local contextual information with beacon technology

People in stores, on the move who are inside buildings or on the sidewalk and have their data switched off cannot receive any digital advertisements. This segment of people are not being targeted through digital or traditional marketing. Using location based marketing, brands and marketers can show relevant targeted ads. Say, someone walks into a denim store and gets a notification for a 30% discount. Compare that to someone miles away from the store who is not even likely to buy the product. This is backed by Google that reports that 82% of shoppers make purchase decisions in-store. Data from xAD shows that 60% of consumers who research goods and services in-store will buy on location.

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2. In 2018, consumers have evolved to avoid spam

Consumers have become exceedingly aware of marketing tactics. According to research, 69% of people who use text messages reported receiving unwanted spam and text messages. 25% of those people face this issue weekly. Proximity-based marketing takes care of unwanted spam by showing only hyper-local relevant ads to consumers.

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3. People today love personalized recommendations

According to the ‘Trends in Personalisation study,’ 96% of all marketers agree that personalisation advances customer relationships. 88% have reported a measurable rise in business resulting from their personalization campaigns. That is why,proximity marketing is a notch above the rest. Using beacons, QR codes and NFC technology, marketers can show notifications prompting users to get discounts, rewards or even place their usual order at the store they are in.   

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4. Introduction of BLE smart technology and Bluetooth Mesh

Leaving the Bluetooth switched on pre-2010 meant massive battery drainage. With Bluetooth low energy, people are more prone to leaving their Bluetooth on. After every new iOS update, Bluetooth is automatically switched on. Another fact to consider is that millennials are more likely to have their Bluetooth on because of all their devices demanding Bluetooth connectivity. WiFi and beacons can also work in conjunction to provide better services, even prompting users to turn on their Bluetooth.

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5. NFC and QR codes proximity marketing campaigns do not need an app

Since beacons require a compatible app, it can be a hurdle to engage customers walking by the store. That is where NFC and QR codes come in. Most Android and iOS smartphones do not require an additional app to tap or scan NFC and QR codes. Native support for both these technologies has been overwhelming in the past couple of years.

Read more about the kind of campaigns you can run with NFC and QR codes

6. Privacy is a major concern

Given Facebook’s Cambridge Analytica debacle among countless other security breaches, consumers have become more worried about the privacy of their data. Which is why proximity marketing comes out on top. There is no personal identifiable data that is collected from users making it more compliant to laws and regulations globally. NFC, in particular, is excellent as the data is completely encrypted.

Proximity marketing is here to stay and here’s why

There are more mobile devices than people in the world. Proximity marketing makes good use of this fact. Back in 2014, when proximity marketing was in its infancy, only 60% of people owned a mobile phone but only a quarter of these devices were smartphones equipped to handle sophisticated notifications. By 2019, Statista reports suggest that there will be 4.77 billion phones in the market. 

According to the NFC forum, there are over 2 billion NFC enabled smartphones and 2019 is essentially the year of QR codes given how quickly they’ve become popular.

In fact, proximity marketing isn’t just limited to mobile devices. Wearables can also receive beacon notifications. The global wearables market is all set to reach 126.1 million units in 2019.

Some interesting stats and insights about the growth of the proximity marketing market

1. 1. 75% of US retailers have integrated beacon technology into their marketing strategies and seen a 9% increase in profits and 175% ROI.

1. 1. According to Business Insider, by the end of 2018, retailers will have 3.5 million active beacons.

1. 1. As per the report, ‘Market for Proximity Marketing,’ the market worth is expected to be worth USD 52.46 billion by 2022, at a CAGR of 29.8% between 2016 and 2022. During this forecast period, BLE beacon-based proximity marketing is predicted to grow at the highest CAGR.

1. 1. The e-Commerce market growth and growing digitization are boosting the proximity marketing market.    

1. By 2019, beacons are expected to reach 60 million customers, and more than 400 million beacons are to deployed by 2020.  
2. NFC market is expected to be worth $50 billion by 2025, according to the NFC forum
3. According to Statista, over 11 million households will scan a QR code in 2020 in the US alone. In 2018, around 9.76 million QR code scans took place.

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These statistics should come as no surprise given the long battery life(2 years) of the beacons that makes them so cost-effective.  

Retailers aren’t the only ones who are investing in beacons. ProxReport estimates that 84% of global airports will use beacons by the end of 2019. The same report also suggests that 47% of NFL venues, 53% of NBA venues and 93% of MLB venues use beacon technology. Additionally, Beaconstac customers have successfully deployed beacons across restaurants, coffee shops, car dealerships, trade shows among other verticals.

Businesses that are invested in proximity marketing without an app have taken to NFC and QR codes to enhance their products.

Find out the best NFC use cases for 2019 here.

What do you think about the current scenario of proximity marketing? Sound off in the comments below! Buy beacons, NFC and QR codes from Beaconstac and experience the power of proximity marketing technology.  

• Author Details

Author Details

Sneh Ratna Choudhary

Sneh is a Content Marketing Manager at Beaconstac and has a penchant for all things tech and startups that improve human lives. She adores dogs, Radiohead, and Michael Gary Scott.

[email protected]