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Location Analytics vs. Geofencing

by Simon DellOro | March 25, 2014 | No Comments

Here at Pitney Bowes, we are often asked about the definition and differences between terms like Location Analytics and Geofencing. This was reinforced during our presentation at the recent GeoNext Conference in Sydney, Australia where we received a number of comments from the audience wanting clarity.

Location Analytics, which Forrester last month called ‘The Rebirth of Customer Experience”, refers to the quantitative analysis of consumer behaviour using location as an essential metric. Of course, the use of location as an integral component in any form of analysis is nothing new. It’s been the underlying premise of our MapInfo suite for the past 30 years! But with everyone in the world now carrying smartphones in their pocket – magical devices that capture location, time and connection to services – we now have an unprecedented pool of global location data to draw from. To ensure this location-based Big Data is put to work Location Analytics need to be employed. From there the possibilities are endless:

  • Analyse past behaviour and actions.
  • Track real-time location in the present.
  • Predict future behaviour based on our understanding of past actions.

It’s natural to give thanks to smartphone manufacturers like Apple and Samsung for giving us these ‘mobility sensors’ that provide this data, but special credit should also go to social media pioneers like Facebook and Twitter. They have helped revolutionise Location Intelligence into the mainstream by creating a desire from consumers to share their location and make it public or available to commercial organisations.

Geofencing is a different spatial concept that gained prominence when vehicle-based GPS became common use in the transport industry and exploded in popularity when smart phones became GPS enabled. A virtual perimeter fence is created on a digital map and then live GPS location data is then mapped over it. Any time the perimeter is crossed inside or outside a trigger is activated. Geofencing has hit fever-pitch popularity in the last year, because it can be used to compare phone location data in relation to locations of interest. For example, send a purchase offer to a subscribed customer when they walk by a nominated retail outlet.

Marketing prompts like these are more common uses of Geofencing now. However, actions can also be consumer-initiated, such as setting reminders for bread and milk to be triggered when you’re nearing a supermarket.

The effectiveness and profitability of techniques like Geofencing will always be heavily reliant on Location Analytics. If you don’t recognise your customers’ typical patterns or anticipate their future behaviour, what hope is there in providing a relevant and compelling offer with a positive action? The application potential of Location Intelligence is ballooning by the day. It is not so important to be an expert on these concepts like Location Analytics and Geofencing. The single most important thing to remember is that Location Intelligence provides a unique, yet powerful, insight into our physical-digital connected world.

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