Paul Cresswell: What place has “place” in a digital world? Location Intelligence adding context to online behaviour
19 February 2016

Location Intelligence is all about using geographic information, location analytics and technology to help consumers and organisations to take action and optimise decisions about locations or where location is important. However, if you haven’t spent the last 30 years obsessed with “place” and “location” you can be forgiven for questioning its relevance in a world where, for many of us, our primary interaction with a brand, retailer or service is increasingly online. And to a marketer, why would the location of somebody matter when you can engage with them on any device, anywhere, any time?

The enduring importance of physical presence

Verdict Retail estimates UK online retail expenditure will grow by 4% to £63bn in 2020. Indeed look at any number of forecasts on the march of online retailing and you might dismiss location as largely irrelevant today. But, think this through! Most of us still like to visit physical locations when purchasing certain products like clothes, where getting the right product first time is key. We like to visit stores to “touch and feel”, to leverage staff knowledge or to compare items. We may still buy online, but the importance of the offline channel increasingly influences the digital customer journey and has a key role in building brand awareness, customer engagement and ultimately loyalty.

The online growth numbers often fail to appreciate this interdependency between physical locations and online sales- often referred to as the “online halo” effect. US retailer N Brown reports an online sales uplift of 6% within a catchment following the launch of a new store. Retailers like Argos, John Lewis and Tesco see their physical stores as “multi-channel hubs” and excel at a seamless offline/online experience. Here, physical locations work in tandem with their digital presence through services like “click and collect”.Verdict estimate 68% of online shoppers used click & collect in 2015 and 32% of customers made an additional purchase in store the last time they used click & collect. So, for retailers with an offline and online presence, there is still a huge incentive for them to get customers through the high street door.

From this symbiotic perspective, as online and offline realms come together the role that location plays in the total customer journey is fundamental.Transport for London illustrate why knowledge of location is key to responding to individual customer journeys – quite literally!

But, what about the significance of what I call the “new location intelligence”, where knowledge of location and place can create relevancy in the digital world and where the fusion of geography and consumer behaviour can inform, through digital channels, how businesses engage with consumers or how governments interact with citizens. A few thoughts come to mind:

Location based digital marketing and engagement strategies becoming mainstream
Our online behaviour plays out over our multiple devices – many of which are increasingly “mobile”. It’s no longer as important to know how we interact with our digital devices – but where. In this context, “location” enables brands and organisations to create geo-targeted messaging, usually on a smartphone, to understand particular behaviours. In the world of digital consumer engagement, the relevance of “location” manifests itself in several ways:

Location adds the context to digital engagement. Knowing “where” immediately adds context to digital data – and context drives information and insight. What you buy is predicted by not just who you are, but where you’ve been, enabling online and offline communication with the consumer in the context of their location at that time. By combining location data with consumer data such as demographics, geodemographic segmentations and previous purchase history, location is key to making sure that brands are sending relevant content to customers and enhancing their experience. Indeed, without many of us realising it, the concept of location is fundamental to the usefulness of many of the apps that we use on our smartphones as part of our daily lives.

Whilst location based digital advertising is increasingly common (see here for some interesting examples), government is increasingly using digital to engage with citizens in the context of their location. Look at Torfaen County Borough Council or Barnsley Council who are using location intelligence platforms to generate savings, drive transformation and provide digital services to its citizens.

Geo-fencing. Digital advertisers increasingly use ‘geo- fencing’ to create a virtual radius around a site and, using a customer’s real-time location data, send offers or information direct to their device if they enter this zone. For example, O2 has used its mobile data to offer geo-fencing capabilities to L’Oreal, driving a promotional message to a customer’s device when they walk near a L’Oreal store. Geo-fencing technology, embedded into banking and payment apps, is also being used to identify instances of fraud or to allow ID verification based on comparing patterns of location history for an individual with the real-time location movement of their device.

Location based attribution. Retailers struggle with measuring the impact that their online presence has on in-store sales, but knowing where people interact with their digital device based on what they see on the device is helping to measure this impact. Emerging businesses such as Placed are using “digital device” locations to connect ad exposure to store visits, providing online to offline attribution.

Micro location data. As beacon technology develops, applications of micro “in-store” location data are growing.Beacons are devices placed in a physical location to communicate in real time with an individual’s smartphone to send them ads, coupons product or service information. It provides retailers with invaluable data about their customers’ shopping habits, allowing them to make improvements to store layout by identifying store flow, maintaining service standards and operations that benefit customer and retailer.Tesco, Waitrose, Michael Kors, Ted Baker and House of Fraser are experimenting with ways to apply this technology.

Location playing a fundamental role in the digital big data world

The digital data explosion creates new opportunities for location intelligence to add value.Benner’s Location Intelligence, trilogy describes how the physical world is being linked to the Internet, generating even more data – consider smart meters and the Internet of Things, where location is a fundamental attribute of device identity. Predictive analytics allow us to mine this vast amount of data to build pioneering location based performance and engagement models across all sectors.

Benner describes “location” as a common key for linking increasingly disparate data sets - from siloed databases, mobile devices, wearables or sensors – making it a key tool for harnessing big data to create value. And, once brought together, spatial visualisation helps us to explore data, often enabling discovery of those “golden threads”. The ability to use spatial relationships to filter data relevant to “where I am right now, at this time” and to trigger user-defined events will be crucial in creating relevancy in our personal and work lives.

We are seeing the emergence of “next gen” location intelligence businesses as location aware devices expand and machine learning analytics are applied to find patterns in the billions of location data points being generated. Working at the interface of the physical and digital, businesses such as PlaceIQ and Placed have emerged specifically to extract value from “big location data”.

So, Location Intelligence becomes more important as offline and online worlds increasingly blur. And in a future where data protection regulation will challenge the notion of what is regarded as “personal information”, the aggregation of an individual’s location data to geographies which “anonymise” the consumer but which enable insight from aggregated patterns of behaviour will provide valuable context.

It is incumbent on those who “love location” to champion its place in helping organisations understand the way we interact across the physical and digital, to provide us all with a seamless engagement experience.

Paul Creswell has over 30 years commercial, consulting & analytics experience in the development & application of consumer and location data & analytics in cross channel marketing. Currently Head of Data Strategy for Experian Marketing Services' Targeting division, he has been with Experian for over 9 years where he has had numerous global and UK roles across analytics, data development, product management and strategy.

Any views or opinions presented are solely those of the author and do not necessarily represent those of the MRS Census and Geodemographic Group unless otherwise specifically stated.