The Business Value of “May We Use Your Location?”

Companies that have used geographic information systems (GIS) to derive location intelligence have found value in understanding location-based patterns.

Thu Sep 03 13:13:00 EDT 2015
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Today, mobile phone users don’t think twice in responding affirmatively to the question, "May we use your location to improve the app?" The pop-up request flits by so fast we hardly notice anymore. But what happens to the location-based data that are being collected and who benefits?

Today, your mobile phone can act as a gateway to data, supplying retailers, insurance companies and even your doctor with the latest information about your buying or health habits. If you use a mobile app that asks to determine your location, the data collected may be used to model certain behavior that can be sold to consumer goods manufacturers who want to know if you’ve developed good or bad impressions. Now, you personally may be more concerned with the choice of iPhone or Android, fuchsia or teal phone covers, but for those on the other end "listening" to the bits and bytes streaming from your phone, it's really all about the data.

As global demand for mobile devices continues to explode, location-based data are key to understanding many of the habits consumers exhibit on a regional, local or even a city block level. IDC, the market research firm, expects spending on smartphones and tablets to hit $484 billion in 2015. Even data from just a single individual could prove extremely beneficial, should that person choose to share such information, as the example below illustrates.

A headline from the January 5th issue of the Wall Street Journal asked this question: "Can a Smartphone tell if you’re depressed? The gist of the article suggested that patterns, such as how long an individual talks on the phone, how often texts are sent to friends and how far someone travels each day may indicate mood or sentiment. Diagnosing behavioral patterns can give physicians a heads-up on a patient's needs and a probable path of treatment. Data like this from a broad collective can also give drug manufacturers a picture about product demand, where to advertise, how much of their product should be manufactured and shipped to distribution centers or which doctors should be targeted for free samples. For non-prescription drugs, these data can help retailers more efficiently merchandise stores based on local demand.

Amassing information on consumer habits is nothing new but the data being collected today in quantity and quality, in near real-time and by specific location, are a gold mine. One-to-one marketing is a reality as retailers employ in-store beacon technology to “sense” when a loyal customer enters through their door. Retailers may even present the customer with a promotion related to past buying habits because they know what you bought from that store and when. This marriage of physical and digital commerce is revealing increasingly important insights that can become a competitive advantage, especially as retailers must find new ways to attract brick and mortar customers.

So, what tools make this possible? Companies that have used geographic information systems (GIS) to derive location intelligence have found high value in better understanding location-based patterns. GIS has been used for many years in everything from retailing to banking to telecommunications to pinpointing the customer base.  However, the big data problem created by mobile technology and sensors such as Apple iBeacons, cascading Twitter feeds and other social media puts a strain on analysts. Faster data processing by spatial databases and analytics derived from location-enabled business intelligence solutions support more timely information flow to chief marketing officers. The collision of big data, mobile and analytics, what IDC calls “the 3rd platform,” is causing many corporations to scramble for technology to support better ways of managing and integrating disparate data, both structured and unstructured.

Jeff Jonas, an IBM distinguished engineer, describes this phenomena as "big data; new physics" and suggests that "every time a new question [i.e. data] arrives into a system, the organization just learned something." As such, Jonas believes that organizations must make sense of what they learn, as fast as they learn it, if they truly want the competitive advantage they seek. What this will entail is a systematic overhaul of how enterprises react to the volume and velocity of data from mobile apps and social media along with more conventional data sources.

But one thing is certain. Analysts must become better “spatial thinkers” by discerning patterns not previously revealed by charts, graphs and key performance indicators (KPI). Location technology presents an entirely different perspective. Analysts capable of understanding spatial patterns of social media merged with traditional transaction data from credit cards, for example, are seeing how sentiment relates to purchase behavior. Consumers may say one thing in social media, but their buying habits may say another. Or, perhaps they are showrooming one day; webrooming the next.

Discerning buying trends is more complex today because of mobile technology. Time plus location plus sentiment are now captured by people using Facebook and Twitter, and are leading companies to discern not just what people are buying but “why” and “where.” The companies that succeed will be those that take action on this information … as fast as they learn it. Those using solutions to derive location intelligence will “see” it even faster.

Learn more about location-enabling your business intelligence and improving your customer data for new levels of insight and precision.