A smartphone's ability to identify its location coordinates and feed this data to thousands of mobile apps is the very reason why location-based services(LBS) are becoming increasingly popular, with various players within the advertising, retail and mobile data services segment, including mobile network operators(MNOs), continuing to invest in this market.
Technavio, a technology research and advisory company said in its new report, the 'global LBS market', that the location-based services (LBS) market is expected to grow at a CAGR of almost 38% from 2015-2019. The high CAGR points to increasing revenues that are expected to roll in over the next 4 years via LBS, especially with the rapid growth in the number of users using LBS applications such as Foursquare and HERE; and also the increase in LBS services offered by MNOs, for example, the Friend Finder service that allows subscribers to receive notifications via SMS on the whereabouts of another phone (use cases include parents tracking the location of their children).
Collectively, LBS offer simple yet essential functionalities including the ability to track important things such as house keys, mobile phones and cars; and the ability to navigate over a specific location. Both services are becoming increasingly popular, with the latter now becoming a must-have feature in many parts of the world in cars, across mobile phones and even connected wearables, both on mobile, Wi-Fi and satellite connectivity. The GPS navigation service, for example, has single-handedly on-boarded millions of users around the globe to the idea of using technology to be more location-aware and to find their way around in new surroundings.
More recently, LBS applications have started to proliferate in the e-commerce segment, helping retailers to push relevant advertisements to people who are in the vicinity of their store locations, providing them with various information as well as offers that help these people find specific stores or receive sale and other promotional information. A lot of future growth in the LBS market, and much of the excitement in this segment is expected to come from its deployment across various e-commerce verticals, and retailers, specifically, will be leveraging LBS in a major way especially in crowded areas such as town centers, making physical signboards and eminent locations - such as the main street or the ground floor of a shopping mall - no longer the only determinants in pulling large crowds.
TechNavio highlighted location-based analytics as another emerging area within LBS. With all the behavioral data that is captured via LBS applications - for example, how users react to an advertisement, the frequency of their store visits and their in-store navigation - advertisers and retailers can gather the crucial information required and perform detailed analysis to evaluate the effectiveness of their push notifications, their store layouts and the overall travel and consumption habits of their customers. For example, a cinema operator may discover that the proximity of a popular food court has been instrumental in driving more customers to the cinema with information on the 'before' and 'after' destinations of their customers showing that more than 70% of its patrons frequenting the food court.
Despite LBS being a location information service, and hence the expectation that it will be provided predominantly by local providers, a number of global names have emerged in the LBS apps space, as listed by TechNavio in its report, including AdNear (Adnear location-based advertising), Alibaba Group Holding Ltd (AutoNavi Vehicle Navigation Service)., Facebook Inc.(Facebook Location-based Ads), Foursquare Labs Inc.(Foursquare local search and discovery service), Groupon (Groupon global e-commerce marketplace), HERE (HERE navigation), Jiepang (Jiepang local search and discovery service), TomTom NV (TomTom navigation and mapping) and Yelp Inc (Yelp local search and discovery) which have merged crowd-based information sources with analytics, Cloud capabilities and winning interfaces to become the apps of choice for up-to-date and real-time information in millions of locations around the world.
