Evolution of Location Based Services Technology: The past, present and future

- 12th Apr 2017

Location is essential in making sense of the complex world around us and if its power is harnessed well, it can enable not only people but also companies to uncover a great deal of insights. Using location data is an irresistible trend, driven by the rise of a tech savvy generation and the proliferation of smartphones.

Location Based Services Technology

But before we discuss how location data can create new revenue opportunities for businesses, let’s see how the location based services (LBS) space has evolved.

From GPS to LBS Location services have a long tradition. The genesis of LBS is in the global positioning system (GPS), which was developed and used by the U.S. military in 1970s. But soon after, it was made available for commercial use and what followed was rapid innovation in satellite technology. In 1996, things took an interesting turn when the US government made it mandatory for mobile network operators to find a way to accurately pinpoint the location of emergency callers. This led to the commercialization of LBS, primarily in the form of finder services to locate nearby points of interest. However, it was not as wildly successful as anticipated and therefore, these offerings were phased out for a while.

Then in the year 2005, LBS saw a resurgence. It was a consequence of some favourable factors coming together, the primary ones being the rise of the smartphone, Web 2.0, and 3G broadband services. With the ensuing commercial success rose a new generation of LBS that paved the way for location-based technologies as we know them today.

The Current LBS Scenario

Undoubtedly, the integration of GPS in smartphones was a game-changer. It fundamentally changed the way people travel. But it is the smartphone, which brought about the real revolution. All these factors led to a marked interest in the development of LBS, with positioning and guiding as some of the most prominent use cases. It is estimated that 67% of smartphone owners use their phone for turn by turn navigation while driving.

But indoors is where most people live and work; however, GPS does not work indoors. This implies that outdoor location technology is not of any use in primary spaces such as homes and offices. On an average a citizen spends 87% of his life in enclosed buildings. Most data is also consumed in these indoor spaces. This makes the rise of indoor location technology inevitable.

What is giving more impetus to indoor location services are a couple of factors:

  • 80% of social media activity (driven primarily by platforms such as Facebook, Instagram, and Twitter) happens on the smartphone. These social media platforms allow users to geotag posts, which results in a tremendous amount of location data being generated.

Innovations in location intelligence are driving the development of better user experiences and optimization of processes. Real-time location data is increasingly being used by marketers to target consumers. The data is so detailed and nuanced that it even allows the tracking of consumers from the time they respond to an ad to the actual purchase in a store. This means that store footfall can now be measured effectively. The massive obsession with smartphones is allowing businesses to tap into LBS more and more to capitalize on opportunities and make critical decisions.

ABI Research reports greater growth in retail Wi-Fi location analytics in 2015 than initially anticipated. Wi-Fi location technology installations have gone up by almost 400% Y-o-Y in the retail industry. Startups and access point vendors are driving this growth by adopting new pricing models, technologies, and partnering with platform providers. While the current LBS revolution is focused more on the retail sphere, its utility in the enterprise and corporate arenas is set to explode as well.

While Wi-Fi location platforms have not been always viable because of their prohibitive costs and lack of suitability for engaging customers, newer versions have removed a lot of these hindrances, to the point that customer analytics is now primarily dependent on these platforms. Innovation by technology firms has led to interesting combinations of Wi-Fi and beacon technology to enhance analytics and customer engagement. While retail stores and malls have been early adopters of LBS, there are a lot of other public venues such as stadiums, airports and hospitals where LBS could find application.

Hybrid technologies are facilitating the growth of LBS and analytics more than anything else. As revenues rise, further forays into indoor location services are likely to occur, allowing physical businesses to leverage online channels more effectively and engage customers. These technologies are expanding across a variety of devices, as well as infrastructure-based deployments, across a range of different stores, public buildings, etc., enabling brick and mortar buildings to engage with customers and compete with online sales.

Proximity and in-store analytics services are emerging as leading revenue generators. As indoor physical spaces adopt the use of location based services, they can maximize their marketing revenues, increase basket size, and improve customer engagement.

What does the Future Hold?

In the future, innovative startups and existing independent Wifi analytics vendors will develop their own high accuracy proprietary solutions and help enterprises achieve even better business outcomes. Overall, we can expect to see a big shift towards hybridization (blending of indoor and outdoor location technologies) and increased accuracy.

Also, without a shred of doubt, emerging technologies will keep evolving the LBS space. In fact, we can already see it happening in the retail industry. While Wi-Fi and iBeacons are still increasingly making their presence felt in the retail arena, new-age technologies such as magnetic field and sensor fusion are already beginning to emerge. While optical and location-aware sensors are being extensively used in smartphones, climate and temperature based sensors are set to add to the data points that marketers will have access to when targeting customers. The potent combination of the IoT (Internet of Things) and location-based technologies will completely radicalize the future and maximize business opportunities.

Add to this the rise of AR (augmented reality) and AI (artificial intelligence), and you have the blueprint for a fully digitized advertising strategy being deployed by marketers. What’s also in store is the rise of personal shoppers or concierges that know the customer and can show them in-store items they know they’ll like or offer them discounts on things they know they want to buy. Businesses in all industries can benefit from this, provided they realize the undeniable power of location data!