In today’s customer-centric world, businesses and organizations are increasingly harnessing different technologies to optimize operations, improve customer experiences, and drive growth. Location data is particularly valuable in this rapidly changing world, where consumer behavior and market trends can shift rapidly. The geospatial data not only tells us where people are, but also provides insights into their habits, preferences, and needs.
It is estimated that the location intelligence market is forecasted to reach an estimated value of USD 50 billion by 2035 during the forecast period of 2023-2035. With the growing volume of business data across the world, every organization wants to be on top of the game and effectively gain value from their data and make informed decisions.
But, location data intelligence has been playing a vital growing role in recent years in the process of augmenting the existing business use cases. Today, we see location data supporting risk assessment for BFSI, retail expansion, validating addresses for e-commerce companies, etc., and enabling positive outcomes for various business use cases.
In 2023, the significance of location data is only going to increase, as businesses and industries realize the value it brings in terms of consumer insights, decision-making, and operational efficiency.
Making the location data more relevant & effective
By 2035, the Location Intelligence market is estimated to reach USD 50 billion
According to the study conducted by Gartner, it is estimated that poor data quality costs organizations around $12.9 million every year. Aside from the immediate impact on revenue, poor-quality data increases the complexity of data ecosystems and leads to poor decision-making.
The companies who are pushing to accelerate the adoption of digital transformation, it is essential for them to take targeted actions to improve their data quality.
As location data intelligence continues to gain mainstream adoption in 2023, let us look at the top-performing emerging trends driving location data solutions for businesses.
Before that let us understand what exactly is location data and how it can help businesses make informed decisions:
Location data provides and guides information based on consumer behavior to specific geographical locations. By gaining data access to a specific location, businesses can analyze the performance across different regions via affluence, population density, presence of brands, average rental, employment rate, etc. to accelerate marketing activities, retail expansion, risk assessment, and tying down insightful data according to the business needs.
The top 4 emerging trends driving location data solutions of businesses
- Store Placement/Expansion: As a retailer, it is crucial to understand the customer demographics to be able to assess the quality of the location. For instance, if you’re brick and mortar or a retailer, location data intelligence could guide you to open new stores or offices based on the aggregated foot traffic data for stores or market share of competitors and penetration in that specific location, etc. When expanding your business to different locations, location data assures you of the most reliable and accurate location where you can maximize the revenue of your business.
- Risk Assessment: The location data platform provides you with comprehensive insights into view of the economic health(affluence index), behavioral patterns, psychographic, etc. of one particular locality/pin code/address to gain in-depth analysis of a location as well as interpret these data attributes to create a meaningful output according to the business use-case. When location intelligence is integrated with the existing risk assessment model of the lending organization, the results are pretty impressive. Specifically for NTC (new to credit) users with no credit history, location data gives quite an accurate risk score and helps lenders serve this highly underserved segment.
Moreover, the entire turnaround time of onboarding customers is reduced drastically. And, location intelligence allows lenders to make more informed decisions about potential borrowers, which can help them identify high-risk borrowers before they become potential defaulters. - Validating Addresses: The process of breaking down an address into component parts, such as street name, house number, city-state, and pin code is called address parsing. Location data is often used to help e-commerce companies standardize address formats across their platforms. It means that regardless of how a customer inputs their address, the system can parse and verify the address correctly. This helps reduce errors and ensure packages are delivered to the correct location. This is particularly important for e-commerce companies that ship products to customers’ homes. By using location data to verify, the company can reduce the risk of packages being delivered to the wrong address or getting lost in transit. Also, reduce the return to origin which is a crippling problem in e-commerce.
- Out-of-home advertising: Using location data intelligence, you can identify the best spots for OOH advertising based on where the majority of your customers live, work, and commute to and from. As well as determining effective target ICP (Ideal Customer Profile) for on-the-go and those observed in specific areas/locations.
- Geo-marketing: Geo-marketing is a rapidly growing trend that leverages location data and intelligence to launch targeted marketing campaigns for different customer segments. By analyzing location data, organizations and agencies can gain insights into the behavior patterns of their target audiences in each location, which allows them to create customer personas and identify look-alike locations to increase sales conversions. For example, a retailer may use location data to identify the most popular shopping areas in a city and launch a targeted ad campaign for those areas.
- Logistics Management: The logistics industry can be greatly benefitted from location data and intelligence, particularly in the realm of last-mile delivery. Location data can provide valuable insights into variables such as the precise location of customers, enabling businesses to efficiently plan delivery routes and validate the addresses at scale, streamlining operations and reducing costs. In the context of deliverable and non-deliverable locations, location data can prove especially valuable. By identifying non-deliverable locations in advance, logistics companies can proactively adjust their delivery plans and avoid wasting time and resources on unsuccessful deliveries.
Location data has a wide range of use cases across various industries. In the retail industry, for instance, retailers can use location data to gain insights into customer behavior, such as foot traffic patterns, popular shopping times, preferred products, ideal merch mix, and more. This information can be used to optimize store layouts, improve product placement, and increase customer engagement. Retailers who use location data can gain a competitive advantage by understanding their customers’ behavior better than their competitors.
For financial institutions and lending businesses location data helps in identifying the behavior pattern of borrowers from one specific location. Like in the case of one pin code, the characteristics of the user group in one pin code are defined by information like typical rental rates, income level, housing prices, etc., and attributes like these play a vital indicator for understanding the user behavior, purchase intention, etc. thus lending organizations can increase their approval rates of the loans and reduce their default rates as well via onboarding only their target ICP.
Why is location data so important?
It’s because it provides businesses with a wealth of information about their customers. By analyzing location data, companies can gain insights into customer behavior, preferences, and habits, which can be used to develop more effective marketing campaigns, improve retail expansion, and optimize business processes.
In addition, location data can be used to create more personalized and engaging customer experiences.
At GeoIQ, we specialize in providing location data and intelligence services to businesses. We collect and analyze various data points to generate direct and communicable scores that can develop a better understanding of locations and make them available for businesses to use. Also, we train machine learning algorithms using business datasets to identify the level of risk associated with a customer based on their location. Therefore, leveraging location data for better lead conversions and customer acquisition.
Visit our website to know more about us.