What is Location Intelligence & How to Use It in Your Business

Key takeaways:

• Location intelligence (LI) helps businesses collect, analyze, and use geographic data for informed decision-making.
• Location intelligence benefits multiple industries such as tourism, retail, transportation, real estate, urban planning, healthcare, and emergency services. LI adoption increases productivity, customer understanding, and supply chain efficiency.
• For businesses with unique or complex requirements, building custom LI software offers unlimited customization, data ownership and control, scalability, flexibility, and integration capabilities. Launching LI software as a SaaS product may also create an additional revenue stream.

In today’s data-driven world, you as a business owner need to understand your customers’ needs and desires, focus your marketing efforts, and pay attention to your facility locations. This is where location intelligence comes in handy. LI adoption has grown since the start of the COVID-19 pandemic, as businesses have had to handle supply chain disruptions, optimize delivery routes, and adapt to rapidly changing consumer behavior to ensure operational resilience and continuity.

Location intelligence allows businesses to harness geodata to analyze customer behavior, market trends, and operational efficiency, and improve various aspects of their operations, including resource allocation and decision-making processes.

How can LI benefit your business? And how can you incorporate it? To answer these questions, we take a close look at location intelligence, how it works in different industries, and what benefits it can bring. You’ll also get practical tips for integrating location intelligence into your business, ensuring you can make the most of this powerful tool.

What is location intelligence?

Location intelligence is a powerful method widely adopted in various industries to draw insights from geospatial data – datasets that include geographic data in the form of coordinates, addresses, and attributes linked to specific locations – and make grounded business decisions.

How does location intelligence work?

To understand how LI can be useful for business, you need to understand how it works. We will analyze how location intelligence software processes geodata and turns it into business insights.

Data collection

The first step is gathering geodata through a geographic information system (GIS) and the Global Positioning System (GPS).

• GIS is technology that allows for the collection, storage, analysis, and visualization of geographic data.
• GPS is a utility that provides real-time positioning, navigation, and timing information through a network of satellites.

GIS manages and analyzes geospatial data, while GPS determines precise coordinates. Both are essential for location intelligence, aiding in data collection and analysis for informed decision-making.

GIS and GPS are used for gathering and processing geodata through the following techniques:

• Geocoding is the process of converting addresses or place names into geographic coordinates (latitude and longitude) that can be used for spatial analysis.
• Heat mapping is used to visually represent the density or intensity of data on a map. It helps identify areas of high or low activity or concentration of certain geographic entities (store locations, traffic load, etc.).
• Geo-tagging refers to adding geographical metadata, such as coordinates or location information, to various forms of media, such as photos, videos, or social media posts.
• Geofencing is a location-based service that uses GPS or RFID (radio frequency identification) technology to create virtual boundaries around a geographic area. It can trigger certain actions or notifications when a device or user enters or exits the defined area.
• Remote sensing involves acquiring information about an object or phenomenon from a distance, typically using satellite or aerial imagery. It enables the collection of geospatial data without physical contact.
• Cartography is the art and science of creating maps. It involves designing and producing maps that effectively communicate geographic information.
• Map rendering is the process of generating and displaying map images from location intelligence data. It involves converting raw data into visual map representations that can be viewed and understood by users.

These techniques allow for comprehensive data collection, processing, and representation, helping businesses to get a broad picture for further analysis.

Data preparation

Collected data serves as the basis for further analysis and decision-making. However, this information needs to be prepared to ensure accurate analysis and relevant results.

There are two activities involved in preparing geodata:

• Data integration – combining data from different sources and in different formats to create a unified and comprehensive view
• Data preprocessing, when the collected data undergoes cleaning and transformation to ensure its quality and compatibility

After you have gathered and prepared all data, you can proceed with the next step.

Data analysis

Now, it’s time to analyze the collected information to derive useful insights. You can apply the following techniques for this purpose:

• Spatial analytics involves analyzing and interpreting geospatial data to uncover meaningful insights. It uses various analytical techniques, such as spatial data mining, to explore spatial relationships, identify patterns, and derive actionable intelligence from location-based information.
• Predictive analytics utilizes historical data and statistical modeling techniques to make predictions about future events or outcomes. You can use predictive analytics to forecast trends, customer behavior, demand patterns, and other spatially related factors.

But how can you apply these analytics methods in your specific case? Here are some tools that will come in handy:

• Data visualization software such as Tableau, Power BI, or QlikView help to create interactive and visually engaging dashboards and reports.
• Tools like R, Python (with libraries like NumPy and Pandas), or SPSS can be used to build predictive, descriptive, diagnostic, and prescriptive models to help you perform statistical analysis and derive insights from your geospatial data.
• Geographic information system (GIS) software, such as ArcGIS or QGIS, provides a range of spatial analysis capabilities, including proximity analysis, spatial clustering, hot spot analysis, and spatial interpolation.

Through these techniques and tools, location intelligence makes geographical data work for optimizing your business processes and allocating resources. But there is one more thing worth mentioning: stakeholders’ involvement.

Stakeholders are people and organizations interested in business process improvements and overall business growth. They can include various specialists, from shareholders and investors to sales specialists and data analysts.

In the case of processing location data, it’s crucial to engage with data analysts and data scientists to validate and refine insights. Collaborative discussions and feedback loops can help your team gain different perspectives and ensure the relevance and applicability of derived intelligence.

Ongoing monitoring

It’s important to track geodata systematically and continually. Only in this way can you ensure the relevance of your data, and therefore the business decisions based on it. Here are some crucial activities for the monitoring stage of LI software work:

• Implementing automated tools or systems to regularly collect and process geospatial data. This can include automated data acquisition processes, data pipelines, or integration with data providers or sensors. Tools like FME (Feature Manipulation Engine) or GeoEvent Server can automate data collection and processing workflows.
• Monitoring relevant data sources, sensors, or real-time feeds for keeping geospatial data up-to-date and relevant. This can involve setting up automated data feeds or APIs to capture real-time information. Tools like GeoEvent Server or custom scripting can help in capturing and processing real-time data.
• Maintaining a record of data changes, updates, and modifications using metadata management systems, such as ESRI ArcGIS Metadata or GeoNetwork. These tools provide features for documenting data changes and maintaining metadata records. Metadata can include information about data modifications, versioning, and data quality.

So far, we’ve explored how location intelligence works and described how it can be useful for business in theory. But what about in practice? In the next section, we consider how LI is utilized by various industries and what benefits it gives them.

Location intelligence use cases

This all looks promising in theory, but what about applying location intelligence in practice? In fact, a lot of businesses are already taking advantage of LI. Here are some statistics that will help you see the real benefits that location intelligence can bring to your business:

• Strategic Market Research claims that geo analytics can help businesses increase their productivity by 45%.
• 78% of data strategy leaders surveyed by Forrester named LI adoption as crucial for understanding how user audiences interact with their business.
• According to a report by Strategic Market Research, location analytics solutions are helpful for supply chain management. Such technologies increased suppliers’ and contractors’ efficiency by 35% between 2019 and 2021.

That’s why location intelligence is widely adopted in various industries, from real estate development and property management to fast-moving consumer goods (FMCG), where companies leverage geospatial data for market analysis and location-based targeting.

If your business case is very specific, you can search for inspiration by learning from other businesses that are already utilizing LI.

Tourism and hospitality

Location intelligence is vital in the tourism and hospitality industry, especially for P2P marketplaces like Airbnb.

Airbnb uses LI to suggest relevant listings to travelers based on their preferences and search parameters. Thanks to LI, Airbnb can analyze data on property availability, pricing trends, guest preferences, and competitor locations in various geographic areas. This helps them identify popular destinations, optimize property listing formats, and provide personalized recommendations to users searching for accommodation.

Additionally, Airbnb uses location data to ensure accurate and transparent information about surrounding amenities and other location factors and to provide personalized recommendations, targeted promotions, and real-time location-based services, increasing customer satisfaction and loyalty.

All these make location intelligence indispensable for businesses looking to build a website like Airbnb, as it ensures the platform’s ability to connect hosts and guests and provide satisfactory peer-to-peer rental experiences.

Retail

Location intelligence is extremely useful for the retail industry. By integrating map services into their business, retailers can analyze customer demographics, foot traffic patterns, and competitor locations. By analyzing this valuable information through marketing analytics platforms, retailers are able to make data-driven decisions on store placement, optimize inventory management and location expansion, and personalize marketing campaigns.

Let’s look closer at Starbucks’ example of building a business strategy using location intelligence. Starbucks is a fast-moving consumer goods (FMCG) company that uses LI to determine the strategic placement of its stores. They analyze various factors such as population density, demographics, foot traffic patterns, and competitor locations to identify high-potential areas for store expansion. Starbucks also uses location data to personalize marketing campaigns and promotions based on the preferences and behaviors of customers in specific regions.

LI is also valuable for businesses that work according to the marketplace business model, as it enables personalized recommendations and efficient customer analysis.

For example, Instacart, a popular online grocery delivery platform, uses location intelligence to optimize operations and enhance the shopping experience. By analyzing real-time data on customer preferences, shopping habits, and delivery addresses, Instacart can personalize recommendations and promotions based on geographic region. Leveraging location data, Instacart also optimizes delivery routes, reduces delivery times, and strategically expands its services to new areas. This integrated approach improves efficiency, inventory management, and customer satisfaction, making Instacart a leader in the online grocery delivery segment.

As you can see, location intelligence helps retailers gain a competitive edge and enhance their overall business strategies by enabling them to make informed decisions on store placement, inventory management, and personalized marketing campaigns.

Transportation and logistics

Location intelligence software helps transportation and logistics companies optimize route planning, fleet management, and last-mile delivery, resulting in improved operational efficiency and timely deliveries.

Let’s take Uber as an example in the transportation field. Uber provides on-demand ride-hailing services, connecting passengers with drivers through a mobile app. It also incorporates food delivery (Uber Eats) and freight transportation (Uber Freight). Uber utilizes location intelligence for matching riders with nearby drivers, optimizing route efficiency, estimating fares based on distance and time, and tracking trips in real time.

Let’s consider one more example to demonstrate how LI can be beneficial in the logistics sphere.

UPS is a leading delivery and supply chain management company that offers diverse logistics services such as package and freight delivery, supply chain management, and specialized transportation. To enhance its operations, UPS leverages location intelligence to analyze real-time traffic, weather, and other data for efficient route planning. Accurate delivery time estimates based on location data help customers better plan their day. LI aids UPS in optimizing resource allocation and enhancing last-mile delivery efficiency by identifying areas of high package density. Additionally, location intelligence guides UPS in selecting prime locations for distribution centers and warehouses while identifying potential new markets for service expansion based on demand and demographics.

In summary, the integration of location intelligence in transportation and logistics, as exemplified by Uber and UPS, optimizes operational efficiency and increases timely deliveries. It also provides valuable insights for businesses looking to build an app like Uber by leveraging location data and business intelligence.

Real estate

Integrating location intelligence services into property management software, ERP, and other real estate systems assists companies in identifying high-potential markets, evaluating property, and understanding neighborhood dynamics. This enables informed investment decisions and efficient property management.

Let’s consider the example of Zillow, a real estate business successfully utilizing LI. Zillow is a digital platform that connects buyers, sellers, renters, and real estate professionals, providing services related to property listings, home values, and real estate information.

Zillow uses location intelligence to provide users with comprehensive property information, including estimated property values, neighborhood data, and market trends. Users can access this information through the Zillow platform, allowing them to make informed decisions when buying or selling properties.

The integration of location intelligence software helps businesses like Zillow deliver accurate and relevant real estate insights to their users.

Urban planning and smart cities

UrbanFootprint utilizes location intelligence in the field of urban planning and smart cities. The company enables urban planners to assess various factors such as population density, land use, transportation networks, and environmental conditions to make informed decisions about city development and resource allocation. It provides valuable insights that urban planners, designers, economists, architects, transportation planners, and civil engineers can use in designing sustainable cities, optimizing transportation systems, and improving public services.

This example shows how beneficial LI is for urban planning and smart cities.

Healthcare and emergency services

Healthcare and emergency services organizations leverage location intelligence (LI) in the following ways to enhance their operations and improve patient care:

• Implementing location services. By integrating location services into their systems, healthcare and emergency services organizations can accurately track the real-time location of ambulances and patients. This enables efficient resource allocation and quick response times during emergencies.
• Analyzing location data. Through location-based analytics, organizations can analyze data on disease outbreaks, healthcare utilization patterns, and emergency response times. This enables them to identify trends, predict potential hotspots, and effectively allocate resources.

For example, EMS Ambulance delivers timely and high-quality medical services by implementing location services. Their location intelligence solution allows them to optimize ambulance routing and response times by identifying the nearest available resources. By leveraging location-based analytics, EMS Ambulances can improve their operations and enhance patient care outcomes.

Overall, LI gives healthcare and emergency businesses notable benefits, including improved resource allocation and enhanced emergency response capabilities. All these can lead to better treatment outcomes and higher business efficiency.

These are just a few examples of how location intelligence can improve businesses and bring significant benefits to entrepreneurs. With location analytics and spatial forecasting, businesses can gain actionable intelligence into market trends and user preferences and can optimize their resource allocation and operational strategies accordingly. In this way, they can improve decision-making, increase efficiency, and enhance customer satisfaction.

How to implement location intelligence into your business

When considering implementing location intelligence (LI) in your business, you have several options. Which to choose depends on your business objectives, budget, timelines, and goals. Let’s consider them in detail to find out which option will be most suitable for you.

Integrate map services

Integrating map services into your existing systems is a popular and relatively straightforward approach to enhance location-based marketing, improve logistics and supply chain management, and optimize route planning and navigation. However, you have to be aware of the pitfalls. Some of the challenges of implementing location intelligence include:

1. Poor location data quality. The accuracy, completeness, and consistency of location data can impact the reliability and effectiveness of your LI implementation. Inaccurate or outdated data can lead to erroneous analysis and decision-making. While many reputable map services provide high-quality and reliable data, there can still be instances where inaccuracies or errors occur due to outdated information, incomplete data sources, or technical issues during data processing.

   Solution: Implement data validation and cleansing processes to ensure the quality and accuracy of your location data. This can involve verifying data sources, removing duplicates or inconsistencies, and regularly updating your data.

2. Customization limitations. Map service providers offer predefined functionality and interfaces, which may limit your ability to customize maps according to your specific business needs. This can be a challenge if you require advanced or specialized features.
   
   Solution: Before selecting a map service provider, evaluate compatibility with your existing systems and infrastructure. Consider factors such as data formats, APIs, and scalability to ensure seamless integration.

Integration with an existing map service is suitable when you primarily need basic mapping functionality, such as displaying locations, geocoding, and routing. It is a convenient choice if you want to leverage existing infrastructure and capabilities provided by established map service providers.

Use an existing location intelligence platform

If you have broad needs that cannot be met by integrating a simple map, take a look at ready-made LI platforms like CARTO and Esri ArcGIS Online.

These location intelligence tools offer comprehensive location analytics and spatial intelligence features, such as data visualization, spatial analysis, geospatial data management, and predictive modeling. At the same time, they are affordable and quick to launch.

Despite these opportunities, you may come across challenges as well. Common problems when using a location intelligence platform include:

1. Dependence on a third-party provider. When utilizing an existing LI platform, you rely on the platform provider for updates, maintenance, and support.
   Solution: Choose a reliable and reputable platform provider that offers regular updates, responsive customer support, and ongoing development to meet your evolving needs.
2. Limited functionality. Existing LI platforms have a pre-built set of features, which can limit your ability to meet specific business requirements.
   Solution: Evaluate a platform’s capabilities and consider whether the platform offers all necessary functionality for your use cases.
3. Data compatibility. Different LI platforms may have different data formats and sources. Ensuring compatibility between your existing data and the platform’s data requirements can be a challenge.
   Solution: Assess the platform’s data integration capabilities and verify that the platform can seamlessly handle your data sources.

Using an LI platform is beneficial when you require advanced features and capabilities beyond basic mapping but have a limited budget or timeline. LI platforms often provide comprehensive location-based analytics, data visualization, and integration with various data sources. They offer pre-built tools and functionalities tailored for location intelligence, making it easier to analyze and extract insights from location data. But note that this option won’t be enough for projects requiring unlimited customization and scaling opportunities. We will consider more suitable options for such cases below.

Develop custom LI software

If your business has unique or complex business requirements that cannot be met by existing map services or LI platforms, you may consider building your own location intelligence software.

This option gives you complete freedom over feature selection, monetization planning, and customization. By developing custom LI software, you can achieve absolute alignment of the software with your business goals and even get an additional source of revenue thanks to the software as a service (SaaS) delivery model. By providing your solution to other businesses, you can earn money through licensing or subscription fees as well as provide extra features for an additional price.

As with map services and third-party location intelligence platforms, there are some challenges associated with this option.

• First, location-based app development requires dedicated resources, expertise in geospatial technology, and relevant development capabilities.
  Solution: It’s essential to have a skilled development team or partner with a software development consulting firm specializing in location intelligence to ensure the successful implementation of your custom solution.
• The second challenge is related to the software development cost and delivery time. Building custom location intelligence software is more time-consuming and costly compared to integrating map services or utilizing existing LI platforms. You and your team will have to go through the entire software development lifecycle, including requirements gathering, design, development, QA, and ongoing maintenance.
  Solution: Adequate planning, project management, and budget allocation are crucial to overcome these challenges.

However, the benefits of developing custom LI software outweigh these disadvantages. This is what you get when you build your own location intelligence tool:

1. Unlimited customization. Custom SaaS application development offers the highest level of customization, allowing you to tailor the solution to your specific needs.
2. Data ownership and control. With a custom location intelligence service, you have complete ownership and control over your location data. This can be crucial for businesses that handle sensitive data and need to maintain full control over its use and security.
3. Scalability and flexibility. Tailored LI software can be designed to scale your business growth and adapt to changing needs. You can integrate additional features, expand functionality, and accommodate larger datasets according to your business needs, being limited only by your budget.
4. Integration capabilities. When you build custom LI software, you can integrate it seamlessly with your existing systems and workflows. You can connect it with other business applications, databases, or data analytics platforms, enabling streamlined processes and comprehensive insights.
5. Additional revenue stream. Developing custom LI software gives you the opportunity to create a SaaS solution. This can be a potential revenue stream if you decide to license or sell your product to other businesses in the future.

By leveraging these benefits, developing custom LI software can empower your organization to have a tailored, scalable, and competitive location intelligence solution that supports your unique business goals and drives informed decision-making.

In any case, consider taking advantage of software development consulting. An experienced discovery team can give you all the necessary information, guidance, and technical expertise in LI integration and development issues. Clockwise Software can help you identify a suitable location data provider, integrate with data analytics platforms, and ensure the successful implementation of your custom LI software solution.

Conclusion

Location intelligence is an indispensable tool for various business areas.

Numerous entrepreneurs from tourism and retail to the real estate and healthcare fields are actively utilizing the benefits of location intelligence by creating geolocation apps to enhance their services, improve customer engagement, and optimize business operations.

You can choose to integrate map services, use an LI platform, or develop a custom solution. Each option has related location intelligence challenges, but you can overcome them using the tips we’ve provided.

When implementing location intelligence, carefully assess your business needs and consider the available options to choose the most suitable approach. Whether you’re integrating map services, using an LI platform, or developing a custom solution, you can address the challenges and leverage the benefits to maximize the value of location intelligence for your business. Software development consulting can provide valuable guidance and expertise throughout the implementation process.

By using the provided insights and tips, you can successfully implement a robust and effective location intelligence solution that drives growth, efficiency, and competitive advantage for your business.