Where Does the Smart Label Market Currently Stand?
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Market Overview
- Bluetooth smart labels started seeing early adoption in 2020 and are rapidly scaling. The focus for their growth currently is in the North American and Asia-Pacific regional markets (particularly outside of China currently), but a number of projects also involve European or Middle Eastern companies.
- Many smart label projects are in the early stages and ABI Research expects to see some fallout in 2023, while others start to scale once the Return on Investment (ROI) has been proven.
- Proprietary smart labels have also started seeing a number of initiatives globally. In China, ZiFiSense is a market leader in smart label technology using ZETA technology, with a number of projects dating from 2019/2020. In 2022, in other regions, a number of projects came to light using other proprietary technologies, with many based on Sigfox designs in the latter half of 2022.
- Projects using LoRa technology are still in the early stages, but some vendors are looking to commercialize projects as a next step up from Bluetooth labels.
- Cellular labels, by contrast, are a more technical challenge altogether for smart label market players. Production for critical components, such as the battery, has not yet proven to be reliably replicable at high volumes.
- As the technology and production processes mature, cellular smart labels will present a very valuable opportunity, particularly in addressing a whole new range of use cases (as opposed to addressing existing use cases).
“Connectivity choice is the most important consideration when determining the value of a smart label solution. All connectivity choices have a large addressable market, but serve different use cases.” – Tancred Taylor, Industry Analyst at ABI Research
Key Decision Items
Tear Down the Wall between Supply Chain and Smart Labels
The smart label market currently exists in a technology vacuum, as an add-on technology thought of and implemented separately from other supply chain functions. There is a large untapped value in considering smart labels as a more integrated part of a supply chain solution. This includes considering integrating “smart labels” with paper labels to offer both human and machine-readable formats containing information for multiple stakeholders in the supply chain (e.g., shipper, logistics providers, consignee, customs, consumer, etc.).
A number of companies active in the smart label market are looking at working with traditional and active label printers (e.g., SATO or Toppan) on such projects.
Assess Smart Label Connectivity Developments
As the market for Short-Range Wireless (SRW) smart labels continues to grow, two developments will be key. First, shifting to a license-based model for hardware production (as Wiliot has done, and as Reelables is seeking to do), thus enabling widespread availability and the ability to take advantage of existing incumbents’ large financial reserves to bring the technology to scale.
Second, integration with more Wide Area Network (WAN) tracker device providers will be important, enabling Bluetooth devices to use dedicated fixed Access Points (APs) and gateways, third-party devices as fixed and mobile gateways (telematics devices, WAN trackers, etc.—of which there is a very large ecosystem), and smartphones. If smart label market players integrate with these devices, it will enable targeting a much larger range of use cases.
Related Content: Smart Packaging: Another Technology to “Connect” Industry
Identify the Market Opportunities for WAN-Based Smart Labels
For WAN-based smart labels, the market opportunity in the medium term exists primarily for tracking at the aggregation level. While item-level cellular WAN smart labels are the Holy Grail, this will not be achieved until the price point reaches US$8 to US$10 or below. Meanwhile, there are market opportunities for using WAN smart labels as low-cost trackers to target lower-value assets at an aggregation level (e.g., pallets, crates, and containers), while waiting for the technology to scale to a point when more use cases at an item level become available.
It should be noted that a similar process is happening in the SRW market, with initial uptake for smart labels at the aggregation level, which will pivot further toward the item level as use cases become more complex and technology decreases in price, while increasing in capabilities.
Dial Back the Importance of Location Accuracy
The importance of location accuracy in many smart label use cases is, more or less, irrelevant. Some use cases, such as security applications focused on status notifications, rely minimally on location. And even in other use cases where location is more important, such as inventorying, location accuracy typically does not need to be highly precise. Only for a few use cases does high-accuracy location matter.
This can be an important place to save power on the smart label device. Even with cloud-based location, data transmissions to the cloud are required to perform a geolocation calculation, which requires more regular data transmissions. Device-based location can offer some opportunities in this area to minimize data transmissions, while retaining location capabilities.
Recognize the Promise of E-Ink Displays
E-ink displays are still science experiments within the smart label market, but they promise a lot of opportunities for the market. E-ink displays are currently seeing growing popularity for other supply chain tracking use cases, and are also extremely popular within the other big “labeling” market, namely Electronic Shelf Labels (ESLs). As the technology matures with greater miniaturization and power consumption optimization, it will play an important role in the smart label market, too.
Answer Two Pressing Questions for the Smart Label Market
Two questions are key to solve for the smart label market. First, the question of who pays is important. While there will be value for a lot of parties from data that smart labels will make available, not every party will want to incur the expense and will wait for another party to offer these data as a free or value-added service. Business cases must take into account different types of supply chains and understand the needs of actors at each level of these supply chains.
Second, the question of data sharing is also important. While visibility within an enterprise’s four walls can be optimized with smart label technologies, visibility outside of those four walls can be more challenging. Data sharing agreements will be important in determining a smart label solution architecture and the distribution of value between different parties.
Key Market Players to Watch
Dig Deeper for the Full Picture
To learn more about the current state of the smart label market, download ABI Research’s Smart Labels: Technologies and Market Opportunities Analysis research report.
Not ready for the report yet? Check out our Condition-Based Monitoring: Using Data for Better Asset Maintenance Research Highlight. This content is part of the company’s IoT Markets and Supply Chain Management & Logistics research services.
Related Research
Report | 1Q 2023 | AN-5342
