Spamming mobile users with text messages is not going to win
customers' hearts and minds, but location-based services can
generate profit if you pinpoint what they need. Daniel Thomas
reports
Imagine walking past a Starbucks coffee shop and being told that
your favourite brand of coffee is on offer via a message received
on your mobile phone. Although this idea is not tremendously
appealing to most people - considering that you can read it on the
chalkboard - this is the type of line that has been wheeled out by
companies offering location-based services for the past couple of
years, to a largely apathetic response.
However, there are increasing signs that location-based services
will be a way for retailers and other service providers to
capitalise on the massive popularity of mobile phones in the UK
and, in doing so, increase their revenues and improve customer
service.
Larry Delaney, general manager of the location-based services
business unit at MapInfo, an organisation which specialises in
these platforms and applications, says location-based services are
ready to move beyond the conceptual stage.
"We are at the point where location-based services are starting to
happen," he says. "All we need is the first real application to
kick the market off - something that will really move into the
consumer's conscience."
Delaney says services such as targeted special offers do not really
showcase the real advantages of location-based services, and would
not reflect well on the third-party company involved.
"You don't want to be walking down the high street getting a text
message every time you walk past a store," he says. "Something like
a branded store locator has far more potential.
"For example, a brewer could form a partnership with a 'night
guide' provider so that every time a consumer requests information
on the nearest bar they are pointed to one of its outlets," Delaney
says.
Analysts agree that all location-based services need is some real
applications. "Our research has shown that consumers are willing to
pay for relevant location-based services, especially when they are
accessing the information via their mobiles," says Adam Daum, chief
analyst at research group GartnerG2. "However, they have to be
customised and specialised - information on child-friendly
restaurants in the area, for example."
Jeremy Green, research director for wireless at analyst firm Ovum,
says technical constraints have not been an issue. "Location-based
services have been held up by the lack of a business model, rather
than by the technology," he says.
There has, in fact, been some movement on the application front,
with the mobile operators - frantically searching for ways to
increase revenue - keen to push commercial location-based
services.
In July, Vodafone became the first UK mobile phone operator to
enable third parties to launch commercial location-based services,
with all the other operators except an as yet unnamed provider
expected to follow suit by the end of the year.
The first service, launched in conjunction with location-based
service provider Mobile Commerce, was for celebrity gossip Web site
Peoplenews.com. Vodafone users are able to text words such as "eat"
or "bar" to short-code service 80400 and receive an SMS reply
informing them of nearby celebrity haunts.
The deal changed the landscape for location-based services,
believes Steve Page, chief executive of Mobile Commerce. "This is
the first time an operator has released a location data feed to a
company like us," he says. "Until now, these services have been
proprietary to one network, but all the operators are interested
[in this], with only one holding back."
Having services that are proprietary to one network has long been a
problem within the mobile industry and this has, to some extent,
stifled the progress of location-based services, admits
Delaney.
"The roaming agreements [which allowed users to call mobiles on
other networks] that the mobile operators agreed are a good example
of where we want to be with location-based services," he says. "A
good sign is the [legislative] pressure we at MapInfo have come
under to offer a pan-European solution."
In an ideal world a mobile phone user would be able to go to a
foreign country and use a "mobile concierge" to find the nearest
hotels, restaurants and bars and so forth, says Delaney. But this
is unlikely to happen anytime soon, he admits. "There are just too
many localised operators which want to keep the technology to
themselves," he says.
Of course, receiving directions to the nearest bar that is
frequented by your favourite soap star is an example of the "sexy"
side of location-based services, but there is plenty of scope for
corporate use and opportunities to cut costs, Delaney says.
"The most significant business-to-business application would be a
simple tracking device, keeping track of your employees [to the
nearest cell] via their existing [Wap-enabled] mobile," he says.
"This has always required investment in GPS [global positioning
systems] until now."
This investment has put many companies off from implementing
employee tracking, Green says. "A number of telematics companies
have been offering these services for some time, but take-up has
been minuscule," he says.
Location-based services can also be used in more sophisticated
ways, by, for example, integrating with mobile management or
existing customer relationship management systems (CRM), Delaney
says.
"It would allow a more dynamic use of, say, a field salesman's
diary by, for example, guiding them to the most relevant customer
in their location," he says. "The link to the CRM system could just
be the simple address."
Third-generation mobile services, as and when they finally arrive,
will provide a massive boost to location-based services, says
Delaney. "That is when you will see the mobile phone really
challenging the laptop and the desktop as an information source,"
he says. "At the moment, the only advantage a mobile has is
location, but when you add high quality images to that you are
really going places."
Whether that is a map directing a reveller to the nearest bar or
guiding an employee to the best customers in the area or, indeed, a
high quality image of a large café latte, it is clear that
location-based services will be an issue many IT directors will
have to address sooner rather than later.
What can location-based services do?
- Tracking employees, without having to invest in expensive
global positioning systems
- Giving employees information, such as directions or, by linking
with CRM systems, the location of the best customers
- Telling consumers the nearest outlets of interest, such as bars
or hotels. This can be utilised as a branding tool by third
parties, such as brewers
- "Buddy finders" could be used by parents to track their
children.