Report: Beacon Use Growing, Industry on Track to Deploy Nearly 400 Million by 2020

The rise of beacon technology was one of the major news stories of last year, but — as with a lot of new technologies — it can be hard to separate the hype around “what could be” from actual adoption rates and use cases. One of the main knocks on beacons is that they’re not as useful as advertised to many retailers and consumers aren’t really interacting with them. Nonetheless, Business Insider has predicted that beacons could influence as much as $40 billion of retail sales in the U.S. in 2016.

Unacast, which operates a network of beacon and proximity data, says its data indicates that the numbers are all going in the right direction — and that beacons are still very much on track to make a major impact on retail.  The company today released its Q4 Proxbook report, revealing a 52% growth in the number of beacons deployed by members in the past quarter.

“We still see the number of sensors is increasing quarter by quarter,” Unacast co-founder and CEO Thomas Walle told Street Fight. “A lot of companies are still in testing and trialing, but we’re moving out of that phase and into full commercial deployments. There is a lot of work being done in the beacon space and the pace of growth is accelerating.”

According to the report, the number of proximity sensors powered by Proxbook’s members has increased to over 5 million, and nearly 4/5 of those sensors are beacons. And one interesting finding is that Google is starting to eat into Apple’s initial lead  as a provide of beacons.  Although Google only launched Eddystone six months ago, the share of companies that support the technology is growing rapidly, poising it to surpass Apple’s iBeacon shortly as the main beacon standard.

“It’s been very quiet around Eddystone,” Walle said, “but nonetheless a large percentage of beacon companies are now offering Eddystone as part of their stack. … We’ve been surprised that so many companies have adopted them so quickly, but it’s clear that all the beacon companies are trying to lower their barrier to entry.”

Some other key findings pulled from the report’s release:

• The world is being sensored up. 51% of the Proximity Solution Providers (PSPs) in Proxbook are now operating beacon networks i.e. a large number of beacons in multiple locations, which can be accessed by 3rd parties. Also, the average number of sensors per PSP continued to grow, up by 28% from 16,377 in Q3 to 20,916, indicating that proximity projects are moving from pilot to full commercial deployments.
• The market is becoming more competitive. As the number of proximity companies increases, we are starting to see them specialize in industry verticals to differentiate themselves from competitors and optimize their solutions for a specific sector.
• PSPs are increasingly data driven. 75% of proximity companies now offer tools for analytics, up from 60% in Q3. Out of the $310.9 million making up the top 10 investments into proximity companies in 2015, the primary focus is in location analytics and maximizing data.
• Europe is growing fastest: New York still leads the world as the city with the most PSPs, but Europe is growing fastest, with 46% of the industry gathered in Europe, versus 37% in the U.S. 

David Hirschman is a co-founder of Street Fight.

(Due to a miscalculation in the Proxbook report, a previous headline on this story pegged the projected number of beacons at 660 million in 2020 — the headline has been corrected to reflect that the number should be just below 400 million.)