The explosive growth of daily deal sites, such as Groupon and LivingSocial, provide one recent example. The discount purveyors not only tailor deals to individual cities, but this year introduced real-time deals available in a subscriber’s immediate vacinity.
It’s almost impossible to separate the rise in location-based technologies from the popularity of smartphones. A critical mass of U.S. consumers now tote the Internet-enabled devices, which come embedded with global positioning systems.
“You should just assume that any app on your phone can know where you are or what you’re doing at any point in time,” said John Backus, managing partner at New Atlantic Ventures. “That’s the world we’re moving to.”
In many ways we’re already there. Technology evolves over time and location-based services are no exception. For example, GPS has guided drivers from one point to another for years. “Check-in” services such as Foursquare already attract millions of users.
The question will be how those technologies continue to evolve and the challenges and opportunities they create in the process.
“The idea is these location-based services can’t stand on their own,” said Laura Rich, chief executive of online magazine Street Fight, which covers hyperlocal business. “From the consumer’s perspective, that’s not enough. They need more.”
One locally developed smartphone app, called Sponto, promotes social gatherings by showing when users congregate in large numbers. The StrEats app, also being developed by locals, will track the District’s food trucks.
Jed Williams, program director for social local media at research firm BIA/Kelsey, said advertisers have caught onto the trend as well. Projections show the next five years will bring increased spending on social media and mobile advertising campaigns that target people based on their location.
“You’re going to see a lot more of these ideas fuse together. Are we going to get all the way there in 2012? No. But I think there will be greater understanding of what are the benefits,” he said.
Black Friday festivities offered another glimpse of this trend. Two retail malls, including one in Richmond, tracked shoppers as they moved about the center using their smartphone’s unique signal. It gave retailers a look at where patrons shop and told property managers which stores saw the most foot traffic.
But inherent in these technologies are questions about privacy, particularly when a consumer’s location is tracked by default or without his or her explicit consent. How far can companies go?
Backus predicts a backlash is brewing. His firm has invested in location-based plays, including a daily deal alternative called Scoutmob, but also has entertained pitches from firms with mobile security and privacy products.
“In a mobile environment people don’t want others to know where they are or where they’ve been” without granting permission, he said. “You’re going to see an intersection of privacy and malware awareness that’s going to scare people, and you’re going to see interesting products come out.”