A decade or so ago, most people would have balked at the idea of carrying around a device in their pocket that could transmit their current location to banks, insurance providers and other businesses. While we rarely think of smartphones in these terms, many of us have become increasingly reliant upon the convenience that geospatial technologies like mapping software and location-based applications offer us.
We use these applications to navigate, find new or existing friends, find a particular product in our area that is on sale, make a reservation at a popular restaurant, arrange for a taxi, and much, much more. We have grown to expect this level of convenience in nearly all aspects of our life—whether it’s with the companies with which we do business or our employers.
Geospatial information systems “used to be a highly-specialized technology, used by only a few individuals for very specific things,” says Clarence Hempfield, director of Product Management for Pitney Bowes. “But, because location and spatially-aware applications have become a larger part of our everyday life through consumer applications, it’s forcing businesses that haven’t spent any time working with GIS technologies to build and support those types of applications.”
In a 2013 study commissioned by Google, the U.K. consulting firm Oxera estimated that geospatial technology services generate between $150 billion and $270 billion in global revenue per year. That would make the sector substantially larger than the video gaming industry, and around one-third of the size of the airline industry. The report also said that geospatial technology is growing by 30 percent per year.
The challenge, Hempfield explains, is that many technology professionals lack experience with geo-location. “IT is now being required to build spatially-aware or enabled applications, without a history of working with these technologies,” he says. “That means organizations like Pitney Bowes have had to deliver these capabilities in such a way that a non-GIS expert can build and deliver spatial applications, without that foundation of years of working with the technology.”
David Sonnen, global analyst for Spatial Information at IDC, echoes the idea that companies “rarely, if ever” have GIS experts in their IT departments. “Each company has its own particular view of the world, and their information systems tend to reflect that view,” Sonnen says. “IT is just now catching up to the fact that location has to be part of how an information system operates.”
Brian Skruch, principal solutions engineer for Location Intelligence Solutions at Pitney Bowes, says that basic geo-location services like mapping are “the price of entry” for businesses developing consumer apps. “You don’t necessarily want to stop at having a map,” he says.
Think about all the applications already available to consumers that rely on geospatial technology. People use their phones to find nearby restaurants, to scan weather forecasts for their current location, to track their running routes, and to find out what movies are playing nearby.
“Really, I think this is just the beginning,” says Skruch. “In the next 10 or 20 years, that will continue to evolve.”
Skruch gives the example of using a shopping mall’s WiFi network to track the location of shoppers. “Because we know you’re in a particular store, and then travel to another store, that tells us something about you and we better understand your interests and needs,” he says. “We can now show you a much more targeted advertisement.”
When Skruch works with clients, he advises them to think about the geospatial data their company possesses, and how they may be able to apply those data to some new solutions or applications that no one else has considered. “Companies that don’t do that are missing opportunities,” he says. “They’re not going to have as much engagement with the customer.”
Geospatial technology has current and potential uses across a number of different fields. It has the ability to help financial firms make decisions about branch and sales staff allocation; to help insurance companies with underwriting decisions and risk management; to assist with maintenance analysis, route optimization, and asset tracking for transportation and logistics operations; to help telecommunications companies better understand market demand and identify trouble spots in their network coverage; to assist with distribution for media outlets; and to aid with crime analysis, emergency response and large-scale planning and development for governments.
Geo-location can help companies in three broad areas: strategic functions, like entry into a new region, and mergers and acquisitions; tactical functions, like determining acceptable risk levels when developing offers for customers; and operational functions, like fraud detection and customer service.
Some of these uses don’t show up in consumer-facing apps, but still affect consumers. One example of this is fraud detection. By tracking the location of a customer’s phone, a bank can better tell whether a series of unusual transactions was likely fraudulent. “Presumably, if your phone was in the same location as those transactions, then I don’t need to make a call to you,” explains Skruch.
Insurance risk assessment is another example of an enterprise use that would be invisible to most customers. Hempfield explains that insurance companies look at the projected path of a hurricane and then use geocoded data to instantly see which of their customers are in the affected area and estimate the company’s potential liability. “The company may want to stop taking in business for a few days before or after a major storm in the affected area,” Hempfield says.
With consumer-facing applications, Hempfield predicts that companies will more frequently use customers’ locations to help better target advertisements – for example, sending a coupon for a store that the customer is just about to pass on the road.
Hempfield acknowledges that this can raise privacy concerns. But he notes that, just as customers have grown accustomed to trading some of their information for convenience, many will likely buy into the idea as long as they see value in it and they feel that the company is not misusing their information.
Eventually, Hempfield says, the rise of Internet-connected devices could yield a scenario like this: Someone’s refrigerator might sense that he or she is running low on milk and it sends that information to the person’s phone, updating their shopping list. The retailer that the shopper frequents, aware of their past purchases and potentially their current shopping list, could then deliver a coupon for a discount on milk at a store near the person’s current location.
“I’ve talked to companies that are really looking hard at the Internet of Things,” says Hempfield. “We’re probably a bit closer to that than some people might think.”
Editor's Note: For more information watch a recent Directions webinar: The Location Imperative - Integrating Spatial Analysis with Major BI Platforms. Pitney Bowes will also present Transforming GIS - Change the Way You Map the World, which introduces MapInfo Professional version 12.5 on Thursday, June 26 – register now or visit http://www.mapinfo.com.