Proximity As a Service Market Share & Growth | Forecast 2031

Report Description

The global proximity as a service market size was valued at USD XX Billion in 2022 and is likely to reach USD XX Billion by 2031, expanding at a CAGR of XX% during 2023 – 2031. The market's growth is attributed to the increasing adoption of mobile phones.

Increasing adoption of mobile phones is expected to fuel the growth of Proximity As a service market. Proximity as a service uses location-based mobile advertising such as Bluetooth, Wi-Fi, near-field communications (NFC), and beacon technology to boost sales among various industries. Thus, with an increase in mobile phones, the demand for proximity as a service is projected to boost the market. For instance,

• According to a research report, the number of mobile devices operating across the world was 15 billion in 2021, and the number is expected to reach 18.22 billion by 2025.

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Proximity as a service is a concept that uses location-based wireless technology to deliver highly tailored advertising content to mobile users in specified places. Beacons, Wi-Fi, Bluetooth, NFC, GPS, and RFID are utilized in proximity as a service. This service model is utilized for several purposes such as commercial delivery in shopping malls, data distribution in smart cities, sharing news feeds for office centers and colleges, and personal ads.

Increasing penetration of proximity payments is estimated to fuel the demand for proximity as a service market. Proximity services allow mobile payments where the transaction between payee and payer devices takes place through proximity technology such as NFC, Quick Response (QR) codes, Bluetooth, and Beacons.

The research report finds that the COVID-19 pandemic impeded the demand for proximity as a service. Proximity as a service is widely adopted in retail industries for proximity marketing as it is a wireless distribution of advertising content to consumers for boosting sales. The retail and e-commerce industry showed a drastic downfall around the world due to the increasing COVID-19 infection and preventive measures by the government such as imposition of lockdowns and social distancing, which significantly hampered the demand for proximity as a service. For instance, global retail sales fell by 2.9% during the COVID-19 pandemic.

Impact of Artificial Intelligence (AI) on Proximity as A Service

Artificial Intelligence in proximity marketing is shaping the future of proximity as a service. AI's ability to process massive amounts of data and extract meaningful insights allows companies to fine-tune their content based on customer location. Artificial intelligence in proximity as a service reduces cost by automating the tasks involved in managing advertising campaigns. AI-powered proximity service has an immense future in several industries as location data is a valuable source of information for healthcare, logistics, retail, and other industries.

Proximity as A Service Market Dynamics

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Major drivers

Rising adoption of proximity marketing in the retail industry is projected to boost the demand for proximity as a service. Proximity services include proximity marketing which retailers are widely adopting to increase foot traffic and sales across physical stores by delivering promotional content to consumers based on their location. For instance, companies such as Victoria’s Secret, Gap, and Best Buy have already implemented proximity services into their mobile advertising campaigns to drive in-store traffic.

Increasing focus on customer service is expected to drive the market. Proximity services generate customer insights such as culture, dressing style, and preferences based on their location which allow organizations to offer enhanced customer service by tailoring products to meet specific customer requirements.

Existing Restraints

Lack of awareness regarding the benefits of using proximity as a service hampers the market. Proximity service is majorly used by retailers and other sectors for proximity marketing for advertisement purposes. With the lack of awareness regarding the proximity services, these retail shop owners are estimated to lose their potential customers which leads to hampering the market for proximity as a service.

Emerging Opportunities

Increasing adoption of micro-location technology is expected to create a lucrative opportunity in the market. Proximity services utilize micro-location technology for proximity marketing to pull customers by sending offers, information, or personal messages based on their location. This encourages retail and other industries to adopt proximity services.

Scope of the Proximity as A Service Market Report

The report on the market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Market Segment Insights

Technology Segment Analysis

Based on technology, the proximity as a service market is categorized into Wi-Fi, Bluetooth, near-field communication (NFC), GPS, beacons, and others. The beacons segment held a large market share in 2022, owing to detecting users precisely, even in limited locations such as indoor spaces or underground stations. Beacons allow businesses to track the exact location of a consumer more precisely as they use smartphone's Wi-Fi and Bluetooth technology to produce app-specific and latitude and longitude data. This helps businesses to track and target consumers and deliver applicable advertisements, messages, and discounts instantly, to boost sales. This in turn results in encouraging companies to adopt beacon technology for proximity services. For Instance,

• As per the research report, the beacon technology market was valued at USD 519.6 million in 2016 and is estimated to reach USD 56.6 billion by 2026 at a CAGR of 59.8%.

The near-field communication (NFC) segment is projected to grow at a robust pace during the projected period, due to the growing need for NFC technology for marketing purposes. It enables a seamless exchange of information between consumers and shop owners with just a tap on NFC stickers placed on Out-Of-Home (OOH) displays or products. Proximity marketers are widely utilizing NFC to interact with potential consumers by advertising through app notifications based on their current location, which is expected to boost the demand for NFC in proximity services. For Instance,

• As per the research report, the global Near Field Communication (NFC) market was valued at USD 20.3 billion in 2020 and is projected to reach USD 47.3 billion by 2024.

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Industry Vertical

In terms of industry verticals, the global market is segregated into retail, healthcare, BFSI, entertainment, and others. The retail segment dominated the market in 2022 and is projected to continue its dominance through the projection period, due to the growing adoption of proximity services for marketing purposes. Proximity services help retailers build strong connections with customers by sending personalized and relevant content to customers based on their location. This encourages customers to remain loyal to the brand, which significantly increases sales of brands. Which results in increasing demand for proximity services by the retail industry.

The BFSI segment is estimated to witness a high CAGR growth in the coming years, owing to increasing branch revenue. Banks and financial institutions are utilizing proximity services to increase their revenue by promoting their products through content advertisement, app notifications, and direct messages by targeting potential customers based on specific locations. Moreover, proximity services help consumers find bank branches easily by detecting their current location through GPS technology, which increases foot traffic in the bank, significantly generating more revenue, which is projected to encourage the BFSI sector to adopt proximity services.  

Regional Outlook

Based on region, the proximity as a service market is divided into Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America accounted for a major market share in 2022, due to the presence of established companies such as Alphabet Inc, Zebra Technologies Corp, and Apple Inc. Moreover, retail businesses in the region are adopting proximity services for proximity marketing, to enhance customer experience and significantly increase sales. For Instance,

• Red Bull rolled out beacon technology at convenience stores in Canada. Red Bull deployed Bluetooth beacons at the point of purchase to offer convenience to consumers and enhance customer experience. It used digital signage within the store to inform users about the offers for better purchases.

Asia Pacific is anticipated to grow at a considerable pace during the assessment period, owing to the growing need for proximity services in several industries and the rising penetration of smartphones. The rising penetration of smartphones is estimated to boost the demand for proximity services. Smartphones are required for proximity services as they utilize NFC, Wi-Fi, Bluetooth, and Beacon technology of mobile phones thus, the growing penetration of smartphones is estimated to drive market growth. For Instance,

• As per research report, the penetration rate of smartphones in Asia Pacific reached 76% in 2022 and is estimated to reach 90% by 2030.

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