Location based services: more than just retail

Ze Germans are coming: And they will continue to expand their technological leadership in location based services. The decisive factor will be to what extent location based service providers can meet the requirements of an innovative German Industry 4.0.

The German industry association for location-based marketing and location based technologies, the Location Based Marketing Association (LBMA), recently announced good news for the branch. A survey has shown that German companies rank second worldwide in the use of location based marketing compared to the previous year.

“Germans in particular are usually timid when it comes to introducing technological innovations. However, our current study shows that German companies in particular see location based technology as an important part of their corporate strategy. As a result, they are also investing in these services,” says Carsten Szameitat, Chairman of the Board & Region Director DACH at LBMA.

In Germany, 86 percent consider LBM to be important or very important. Technologically, German companies (43 percent) rely primarily on the all-rounder Beacons for the implementation of location based services. 37 percent use them, another 15 percent plan to use them as localization tools.  German companies see the greatest advantages of location based marketing in the possibilities of personalization. These include the ability to boost sales at the PoS (44 percent) and the targeting accuracy of the customer approach (49 percent). “Compared to 2016, there is an increase in target accuracy of five percentage points,” says Szameitat. It is understandable that the study focuses on advantages for the retail sector, as the LBMA itself names retail & trade as its focus sectors.

But there is even greater potential in other sectors. If one considers the turnover figures of the various branches of the economy, the retail sector with 513 billion euros in turnover falls extremely short of the industry sector and the manufacturing sector with 2,051,996 billion euros (for 2015). And industry & manufacturing is not only a powerful sector, but also an extremely innovative one overall. The factor “value added in the manufacturing industry” in particular will ensure that Germany was once again among the top 3 in the Bloomberg Innovation Index in 2017. Tesla – for many a byword of innovation – mainly uses robots from the German company Kuka in its production plant in Freemont, for example. But while Tesla has just disappointed the testers with the Model 3, the Augsburg company has just been sold to “the Chinese”. Kuka is one of the industries in which China wants to take a leading role worldwide and therefore purchases the necessary know-how from the best representatives of the guild. In order for Germany to maintain its top position as an innovator in the future, not only Forerunners like Kuka, but all industrial companies must face the challenges and megatrends of digitization and connectivity that are decisive for their competitiveness. And precisely this situation will have an extremely positive impact on the market of German LBS providers.

Beacons, like other existing technologies used in location based services, serve as a localization tool and increasingly as a communicator of additional environmental data such as temperature and humidity. In short, technology does not care whether it locates customer smartphones or machines or production parts. Sensor beacons can also communicate maintenance and safety-relevant information. Either to B2B users such as maintenance personnel or machine operators (such as the Info@need intralogistics app, which feeds new picking orders to users in real time depending on their location), but they can also communicate directly M2M – such as Favendo’s asset tracking system.

iBeacons will be used more and more in the future in the area of industrial production for the identification of workpieces, machines and employees. Especially in the area of Industry 4.0, applications for networking production processes with mobile applications on smartphones and tablets will be realized. This makes it clear that this sector has future potential for location-based services far beyond push news on “consumer information”. It will be this cross-fertilisation of Industry 4.0 and location-based service providers that many industry insiders believe will have an extremely positive impact on the market development and innovation status of both groups of companies.

Thomas