The market for global location analytics is estimated to grow at a CAGR of 15.6% between 2019-2026, the absolute value rising from $10.8 billion in 2019 to $29.9 billion in 2026. The future is very promising with many tailwinds in attendance. Increasing adoption of future technologies, customers’ engagement with digital and social media, ever rising appreciation and felt need for predictive analytics, increasing adoption of location based applications by internet savvy netizens- in general growing usage of spatial data and analytical tools has created a very benign environment, and the demand for location analytics has deepened and broadened in an integrated manner, But an environment is always full of both promises and pitfalls, opportunities and challenges; tailwinds are obstructed by headwinds. Similar is the case here. Thus, there are issues like high initial expense of buying technology, increasing consciousness about data privacy, varying regulatory norms in different markets etc. Still when we confront drivers with dampeners, on balance the field is ripe for harvesting a rich crop. Precisely the reason why such reputed and adroit companies as SAS Institute, ESRI, Oracle, Pitney Bowers, Cisco, IBM,and a whole lot others have made a plunge in the little fished market, while others were preparing a route map. Let’s undertake a dispassionate analysis: on the driver’s side we have a long list inducing forces on the platter.
First and foremost, is the increasing affinity towards up to the minute and futuristic technologies and innovations.
Latest buzzwords like analytics, cloud computing, connected devices, blockchain, artificial intelligence, robotics, machine learning are facts of life in fully developed form. Their deployment is no more a luxury, it is a necessity for survival and success of an organization. These disruptive technologies are being adopted in double quick time with a view to provide an enlightening customer experience with both efficiency and effectiveness. Second, the companies are turning from being intuition based to being data driven in all departments – decision making, product and service development, and the understanding of the world canvas. The humungous amount of data needs speed and agility as critical capabilities for its collection, collation, analysis, and deployment. Hence, the need for tools like machine learning, artificial intelligence and business analytics.
Second, the need for predictive analytics is growing.
A seller needs to assess customers response and purchase, opportunities to upsell and possibility of cross selling. Predictive models, and analysis through them, enables a business to attract, attend to, sell, retain, and further monetize their profitable accounts. Second, companies can use these models for forecasting and managing their inventory stock of semi finished and finished goods so as to prevent any geographical misallocation and avoid any likelihood of missing out on a sale opportunity. Third, the data can be managed in such a manner decision making takes a leap, return on marketing investment is improved, as also business process are revved up and strengthened.
Third, growing need for spatial data and analytical tool
What is spatial data analysis? Well, it tries to detect patterns as also explores and model relationships between such patterns so as to understand processes that are responsible for such observed patterns. Accordingly, it is used by business to mine new info and decide based on this information. Indeed, it is not merely small and large business, but even not for profit organizations like colleges, NGOs, universities, and even national agencies (like revenue services) and local and state governments are using spatial analysis to their satisfaction. To this spatial analysis is now being added location analytics which includes geographical mapping. It fortifies the business analytics packages by adding mapping, data enrichment, and spatial analysis capabilities to the enterprise systems that otherwise lack such an integrated approach and capabilities.
Finally, the driving force is increasing spread of use of location-based apps
Mobiles are as ubiquitous now as watches, infact more than the time keepers! The overall mobile experience is derived from loaded mobile apps which are used for navigation and travel, retail searches, geo-social networking, and many more. All these experiences are enabled and enhanced when the location data supports them. Reaching from point A to point B, locating friends in the vicinity, finding a place to dine, all these are possible because location-based services grant users’ access to sifted, relevant, up to the minute information about the surroundings. So, the businesses gain because they can provide such updates to their customers, market and advertise on mobiles so as to micro-target their customers at the most buying ready moment, and after advertising/promotional deals to lithering customers. All this converts a user from being satisfied to a delighted one, adding to the dynamic user experience. It also provides both the business and the buyers unprecedented convenience as well as opportunities to profit from such applications of locational data. While on one hand, nearly 90% smartphone owners use their phones for directions, recommendations or other information related to their location, on the other hand business and other location-based services providers have hit a gold mine in catering to these needs of the mobile users. Such services, based on platforms like artificial intelligence and analytics, in turn are likely to drive the market for location analytics.
But our task is to present a balanced picture, and not to make a sales pitch. Hence we must caution you against the likely restraining forces.
Some of these headwinds are:
Now there are multiple data points where consumer information is captured and stored; it is prone to be made publicly available without the owner’s consent. Consumers therefore are becoming cautious about the data leaks and its unauthorized use by unscrupulous users. While high profile and intensely data breaches make the headlines _ like 117 million leaks for LinkedIn, or 110 million customers’ information being compromised in case of US retailer Target _ such illegal data collection and mining is as common as your electronic fingerprinting. If you are on web, your data is available to one, all at a very small price, may be 1 cent.So although the market for big data and analytics is growing exponentially, there is a need to maintain a balance between privacy and profiteering. And where ethics are flouted, regulations seep in. So, under intense pressure from civil and criminal rights activists, governments are stepping in. They are enacting and enforcing privacy (of data) laws restricting unauthorized access to information, thereby curtailing the availability of data. Now that GDPR is being made applicable globally, one has to be conscious and should be able to explain how one sourced the data was it without authorization? Probably the days when anyone could request access to data are likely to get over sooner than later.
Yet, on balance one can surmise that the potential for growth of this market far surpasses the obstacles that may put roadblocks in the path.
The field is ripe for harvesting. Take note.
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Contributed by: Prof. K.K. Srivastava
KKS is an academic, author, writer, researcher, and corporate speaker. He writes regularly on Economics, Management, Technology, and others areas.