Beacons: The Humble, Low-Cost Device That Is Changing How Big Retail Chains Do Business

A beacon, in its simplest form, is a small, low-powered and low-cost piece of hardware that emits Bluetooth low energy (BLE) signals. The BLE that a beacon emits can wake up apps that are installed on smartphones and tablets within a range of about 160 feet.

This is useful because it allows developers working for retailers to engineer apps that act a certain way when they are within range of a beacon - in other words, location-based actions and notifications.

In a new in-depth report on beacons, BI Intelligence finds that these small devices are the fastest-growing in-store technology since mobile credit card readers. The beacon installed base will see triple-digit growth rates over the next few years.

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Here are some of the top insights in the report.

1. Beacons are inexpensive, durable, and offer retailers the chance to communicate with consumers in stores, and collect data on their preferences.

• The beacon installed base will consist of 4.5 million active beacons overall by year end 2018, with 3.5 million of these in use by retailers. The full BI Intelligence report includes the five-year CAGR for beacons. Half of the top 100 retailers in the U.S. are testing beacons this year.

2. Hundreds of million of smartphones are already compatible.

• Globally, we estimate that 570 million Android and Apple smartphones are compatible with Bluetooth low energy (BLE), the signal emitted by beacons to wake up smartphone apps, which translates to roughly one-third of the smartphone installed base.

3. Privacy worries are valid, but as long as beacon programs are optional, consumers aren't resistant.

The Beacons Market Forecast is part of new research from BI Intelligence. The slides above are just a sample of the charts and data contained in the report.

The market forecast is paired with an explainer that sets the story straight about what beacons are, how they work, what Apple is doing with iBeacon.

Here are some of the other trends explored in the full report:

• We look at why Apple is still in the lead, and ahead of Google, when it comes to beacon technology. Apple's iBeacon implementation means that iPhones running the latest version of iOS 7 can scan for beacons in the background, even when the relevant apps are closed. That doesn't yet exist on Android.
• Outline the ways that beacons are currently being used in stores, and other venues.
• Explains why retailers are so excited about beacons and what they hope to accomplish with this new technology.
• Proves that location-based app notifications powered by beacons increases user engagement in apps, and drives more in-store sales.

To access the Beacons Market Forecast Report and BI Intelligence's ongoing coverage on the future of retail, mobile, and e-commerce - including charts, data, and analysis - sign up for a free trial.