This ABI Insight provides the latest perspective on the Bluetooth® Electronic Shelf Label (ESL) market, looking back at the major announcements of 2023 and offering key recommendations on how Bluetooth® ESL technology adoption can be accelerated.
The Bluetooth® ESL Standard Celebrates Its First Birthday
In February 2023, the Bluetooth Special Interest Group (SIG) introduced its wireless standard for the Electronic Shelf Label (ESL) market, leveraging key features of the Bluetooth® Core Specification Version 5.4. This included Periodic Advertising with Responses (PAwR), Encrypted Advertising Data, LE GATT Security Levels Characteristic (SLC), and Advertising Coding Selection. In April 2023, the Bluetooth SIG also made available an Electronic Shelf Label Profile Specification that defines how the new features in 5.4 can deliver new interoperable ESL systems based on Bluetooth® technology. The intention was to create an ultra-low power, secure, scalable, and standards-based interoperable ESL solution to further ramp up the ESL market and address some of the hesitations from retailers in adopting ESL technologies. Some of the reasons behind the ESL market not yet reaching its true potential have included a confusing and fragmented technology landscape with proprietary or single vendor solutions, expensive hardware, security concerns, limited functionality, and the lack of holistic, future-proof smart retail strategies that have the potential to expand into multiple use cases to bring compounding benefits. However, nearly 1 year on from these developments, how has the ESL market evolved, and what impact has Bluetooth® ESL made on the market?
The Bluetooth® ESL Ecosystem Is Growing, but Much More Needs to Be Done
The development of the ESL standard in the Bluetooth SIG was led by Qualcomm Technologies and SES-imagotag (now VusionGroup). However, as with all new Bluetooth® technologies, there is typically a delay between the arrival of the specification, chipset availability, product development, and real-world deployments of those products. Nonetheless, there are some encouraging signs around the wider deployment of Bluetooth® ESL solutions.
On the chipset side, in addition to Qualcomm, several other solution providers unveiled ESL solutions in 2023. March 2023 saw Infineon announce that its AIROC CYW20829 Bluetooth® LE System-on-Chip (SoC) would also support the Bluetooth® 5.4 specification. In April 2023, Nordic Semiconductor unveiled its nRF54 Series with support for Bluetooth® 5.4. In June 2023, Silicon Labs announced support of Bluetooth® 5.4 across a range of its Bluetooth® Low Energy (LE) chipsets. In September 2023, CEVA announced that its RivieraWaves Bluetooth® 5.4 Platform was SIG qualified and had already been licensed to several customers, including those addressing the ESL space. Meanwhile, at CES 2024, Packetcraft and Synopsis collaborated to enable a turnkey silicon and software Internet Protocol (IP) solution for Bluetooth® 5.4. The continued availability of Bluetooth® 5.4 solutions will be fundamental to accelerating the rollout of Bluetooth® ESL in the next 12 months.
However, even prior to the arrival of the Bluetooth® ESL standard, certain ESL vendors had already used Bluetooth® technology as part of their ESL product portfolios. In January 2023, ETAG TECH, a Chinese ESL vendor, partnered with Bluetooth® chipset provider Atmosic to enable ultra-low power ESL solutions. In addition to delivering regular pricing updates via Bluetooth® LE-enabled infrastructure, Bluetooth® has also historically been embedded (sometimes optionally) within ESLs to enable direct updates via a smartphone, or to enable proximity beacons to be directly embedded within the shelf label. Companies such as ZKONG, Minew, Century, Displaydata, and others, have been doing this for several years. Increasingly, ABI Research expects Bluetooth® to be leveraged as the primary connectivity solution for all of these functionalities, while support for Bluetooth® 5.4 and the ESL standard will increase over time, as vendors migrate to new technologies. For example, in September 2023, Minew launched its STag58P, leveraging Nordic Semiconductor’s Bluetooth® 5.4 nRF52833 SoC and support for the new ESL standard.
VusionGroup, perhaps unsurprisingly, has led the charge in recent months. In April 2023, the company announced that it was entering a new agreement with Walmart to deploy its latest generation VUSION platform across several hundred Walmart stores in the United States. The first phase will include 60 million shelf labels and will leverage Bluetooth® LE technology. Following this, in December 2023, VusionGroup launched VusionOX, a Bluetooth® LE-based protocol that enables seamless connectivity of multiple in-store use cases, including ESLs, smart rails, and sensors, along with the ability to enable valuable location services such as real-time Three-Dimensional (3D) geolocation, personalized in-store navigation, and guided fulfillment and replenishment, among other benefits. Furthermore, in January 2024, the company announced its EdgeSense solution, a rail-based digital shelf solution that leverages VusionOX to enable pricing automation, location services, Internet of Things (IoT) sensor nodes, centralized communication, and a single power source for multiple devices. Combined, these efforts demonstrate how Bluetooth® LE can be a foundational technology for interoperable, future-proof, multi-functional smart retail deployments that transcend purely ESL applications.
Accelerating the Adoption of Bluetooth® ESL Solutions
The ESL market has seen enormous growth over the last few years, and 2023 marked another strong year for adoption in the retail space. VusionGroup, for example, grew its revenue to over €800 million, showing a 29% increase over 2022. This followed an already enormous increase of 47% in 2022 versus 2021. Similarly, Pricer’s 1H 2023 results showed a 26% increase versus 1H 2022. Favorable market conditions for retail transformation such as rising inflation and labor costs, a competitive retail landscape, increased omnichannel requirements, new entrants to the market, growing demands for better in-store experiences, improvements in label quality and technology, and the availability of new ESL technologies and standards are expected to continue to propel the market forward in the coming years. With tens of billions of labels globally having the potential to be replaced with ESLs, this represents an enormous Total Addressable Market (TAM). However, even with the recent accelerated growth, the ESL market has barely scratched the surface of its true market potential. By 2028, ABI Research forecasts that ESL shipments will reach nearly 560 million annual shipments, while cumulative shipments of ESLs will reach more than 3 billion, driven by deeper penetration in existing regions and organic growth in areas like Asia-Pacific, the United States, the United Kingdom, and other parts of Europe.
However, there are still some challenges that remain. While Bluetooth® ESL solutions exist in the market today, the ESL standard will take more time to reach end products and be deployed in the market. Bluetooth® 5.4 will need to continue to filter to Bluetooth® Integrated Circuit (IC) vendors, hardware vendors, and system integrators, and will need to be adopted on both the ESL side and the Access Point (AP)/gateway infrastructure. In addition, a few leading vendors control a large portion of the existing ESL market, often with their own proprietary solutions. These have reported record revenue and unit growth over the last 12 to 18 months, so there may be limited incentive for them to adopt an alternative technology when performing well. However, ABI Research believes that these solution providers should consider offering Bluetooth® LE-based solutions as part of their product portfolios or risk losing out on a wider share of this rapidly growing market. Furthermore, retailers can benefit from the huge number of Bluetooth® technology vendors, chipset suppliers, software developers, system integrators, and other industry players that continue to grow and evolve. Reaching the addressable market of tens of billions of shelf labels globally is unlikely if retailers are tied to the product portfolios of a few proprietary vendors.
In the next 12 months, ABI Research expects new entrants in the market, and for others to add Bluetooth® LE solutions as part of their product offerings to help compete and address new opportunities across different regions. Multiple ESL vendors are already supporting Bluetooth® technology, particularly in Asia-Pacific; however, this market remains the smallest share of the overall market. This is expected to change over the next 5 years, as countries like China and Japan accelerate adoption. Wider ESL ecosystem consolidation and harmonization, alongside growing retail pressures and awareness of retail IoT, will enable Bluetooth® solution providers to capture a bigger portion of this organic growth. Furthermore, education on and awareness of the ESL market, more broadly, still needs to grow, while education on the Bluetooth® ESL standard is still somewhat in its infancy. By 2028, ABI Research forecasts that annual Bluetooth® ESL device shipments will reach 117 million units, growing from approximately 16 million in 2021. However, depending on how swiftly the vendor ecosystem embraces the technology, this has the potential to accelerate further.
To achieve this, vendors should take advantage of the benefits of standards-based Bluetooth® smart retail solutions on the whole. The ability to lower the cost of deployment and to support multiple use cases, including wireless sensor networks, beacons and proximity services, asset and personnel tracking, and Point of Sale (POS) connectivity, among others, can drastically increase the value of a smart retail deployment’s Return on Investment (ROI), while minimizing the cost and complexity of managing multiple use cases. Holistic smart retail solutions based on future-proof, standards-based infrastructure will lay the foundation for solving additional problems and for creating new services over time, unlocking further value and ROI.