UNLOCKING VALUE WITH LOCATION INTELLIGENCE - Boston ...
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UNLOCKING VALUE WITH
LOCATION INTELLIGENCE
By Robert Archacki, Kurt Hogan, Michael Fraser, and André Georgi
T oday, many companies are struggling
with multiple challenges. They are
working to provide engaging, more person-
tions, has evolved into much more complex
applications.
alized customer experiences that offer Broadly speaking, we refer to location in-
compelling reasons for customers to come telligence as the use of mapping and geo-
back often and buy more products and spatial data, in combination with a compa-
services. At the same time, companies are ny’s internal customer data, to improve the
seeking higher levels of operational customer experience and underlying busi-
efficiency to maintain profit margins in ness processes. Location intelligence is al-
increasingly competitive markets in ready changing the way businesses oper-
virtually every industry. Accelerating ate. But to what degree?
advances in enabling technologies—
among them, communications, cloud, To answer that question and to explore the
analytics, and mobile—have significantly roles that these programs play today and
amplified the role that mapping and will play in the future, BCG surveyed more
geospatial data play in addressing these than 500 executives in the US, the UK, Sin-
issues. gapore, and India, focusing on companies
in five sectors in which location intelli-
Deeper, data-driven insights into customer gence has significant impact: financial ser-
demographics and preferences, combined vices, retail and e-commerce, logistics and
with mapping and geospatial data, have en- delivery, real estate, and travel and tour-
abled companies to optimize their opera- ism. Google commissioned BCG to conduct
tions to better address their customers’ this study and to subsequently analyze and
needs, including pricing, products, and ser- assess the location intelligence market. In
vice delivery. What began as a few basic conjunction with the survey, BCG inde-
uses of mapping and geospatial data, such pendently interviewed top managers at
as for store listings tailored to user loca- these companies who make purchasing andcollaboration decisions about geospatial geospatial data is nice to have, but now it’s
data and about mapping platform pro- a must-have for a company like ours to
grams and providers. grow revenues and ensure personalized
customer experiences.”
The first thing that stands out in our re-
search is the extent to which these sectors
already depend on mapping and geospatial What Drives Success?
data to enhance business processes. (See Not every company can claim high levels
Exhibit 1.) Of the executives surveyed, 95% of returns from its location intelligence pro-
said that mapping and geospatial data are gram. In our study, we found that certain
important in achieving desired business re- attributes of location intelligence programs
sults today, and 91% said that it will be are more closely correlated with success
even more essential in three to five years. than others. The factors with the highest
correlation to performance included the
As further evidence that location intelli- degree of alignment between mapping and
gence is very important in many business- geospatial data and a company’s core busi-
es, more than 50% of respondents said that ness strategy, the extent to which the com-
their C-level executives participated in the pany employs location intelligence across
decision-making process pertaining to us- its business, the maturity of the company’s
ing mapping service providers. Often, this underlying location intelligence capabili-
required cross-functional participation— ties, and the effectiveness of its efforts to
including IT/digital, strategy, operations, measure value from location intelligence
finance, and marketing—emphasizing the initiatives.
interdisciplinary nature of the opportunity.
In describing the impact of location intelli- Using the respondents’ self-reported matu-
gence programs, the director of digital rity on these factors, we categorized them
product management at a global financial into three location intelligence archetypes
services company said, “If you had asked —followers, challengers, and leaders—
six to seven years ago, I would have said defined as follows:
Exhibit 1 | Already Valuable Today, Location Data Will Drive Even Better Business Results over
the Next Three to Five Years
Importance of location data to business Change in importance of location data to
performance today, by sector business performance in 3 to 5 years, by sector
Respondents who answered “somewhat important” Respondents who answered “somewhat more important”
or “very important” (%) or “substantially more important” (%)
Average
98 96 100 95% 99 Average
94 90 93 91%
89 87 85
58 46
58 71 75 70 51 59
83 59
41 47
31 36 31
27 25 24 26
14
Financial Retail Logistics and Real Travel and Financial Retail Logistics and Real Travel and
services and delivery estate tourism services and delivery estate tourism
e-commerce e-commerce
Substantially Somewhat
Very important Somewhat important
more important more important
Sources: Global BCG Survey on Location Intelligence for Enterprises (n = 520), October 2020; BCG analysis.
Boston Consulting Group X Google 2•• Location Intelligence Followers— Although all types of companies enjoy
companies that are in the early stages some gains from location intelligence appli-
of using location intelligence, with cations, leaders far outshine the others.
limited implementation of mostly basic Leaders reported improvements that were
use cases, typically lagging behind 1.3 to 2.0 times as great as those achieved
peers by followers in three key metric categories:
customer experience, sales performance,
•• Location Intelligence Challengers— and operational efficiency. (See Exhibit 2.)
companies that are seeing early benefits These higher returns did not vary signifi-
from implementing location intelligence cantly by industry, company size, or digital
but can further expand the number and adoption relative to peers.
sophistication of use cases across their
organizations and build stronger
location intelligence capabilities A Broad Spectrum of Location
Intelligence Uses
•• Location Intelligence Leaders— Survey respondents reported that they use
companies that have defined a holistic mapping and geospatial data across eight
location intelligence data strategy, built categories and more than 100 specific ap-
strong in-house location-based capabili- plications. (See Exhibit 3 and the Appen-
ties, and incorporated more advanced dix.) Customer-facing categories include
location-based use cases across multiple geomarketing, digital customer experience
business areas and customer journeys enhancement, on-premises customer expe-
rience enhancement, and zone-based pric-
Only about 15% of the companies we sur- ing. Operations-oriented categories include
veyed qualified as location intelligence route planning and optimization, network
leaders, while the lion’s share (45%) con- and supply chain optimization, workforce
sisted of location intelligence challengers. coverage optimization, and support func-
Examining these categories by sector, we tion optimization.
found that financial services had the high-
est percentage of leaders (21%), with retail On average, the most active companies
and e-commerce (18%) close behind. leverage geospatial data to implement ap-
Exhibit 2 | Location Intelligence Leaders Drive Approximately 1.3 to 2.0 Times as Much Impact
on Key Metrics as Followers
Impact on select metrics related to Impact on select metrics related to Impact on select metrics related to
customer experience (%) sales funnel (%) operational efficiency (%)
~2.0x
~1.4x ~1.3x
16.1 16.4
14.6 13.8
12.3 11.8 11.7 11.1 10.7
9.7 8.8 8.9 8.6
8.5 7.8 8.3 8.2
7.7
Followers Leaders Followers Leaders Followers Leaders
Customer retention Revenue growth Number of support calls
Customer satisfaction Online to offline conversion Average time to fulfill service
Net promoter score Time spent on website Error rate for address entry
Sources: Global BCG Survey on Location Intelligence for Enterprises (n = 520), October 2020; BCG analysis.
Note: The impacts shown in the bar charts are average percentage gains in select metrics for customer experience, sales, and operations.
Boston Consulting Group X Google 3Exhibit 3 | Executives in Multiple Industries Use Location Intelligence in a Wide Array of Use Cases
Respondents employing use cases, by sector (%)
Financial Retail Transport Real Travel and
Use case categories services and and estate tourism
e-commerce logistics
Geomarketing and targeted communications
(e.g., geospatially based promotions for 63 78 53 68 69
products/services)
Digital customer experience enhancement (e.g.,
Customer-facing
location to optimize the online customer experience, 69 65 43 59 73
such as store location or address auto-completion)
On-premises customer experience
enhancement (e.g., location-based information to 36 38 0 48 60
improve the in-store customer experience)
Zone-based pricing (e.g., pricing adjustments for
products, assets, and services based on location)
0 37 28 28 19
Route planning and optimization (e.g., use of
maps and geospatial data to optimize fleet’s driving, 30 53 74 33 10
delivery, and pickup routes)
Network and supply chain optimization (e.g.,
49 60 56 35 24
Operational
use of maps and geospatial data to optimize store,
branch, office, and warehouse placement)
Workforce coverage optimization (e.g., use of
maps and geospatial data to allocate staff and 41 34 31 30 24
salesforce to maximize coverage and efficiency)
Support function optimization (e.g., use of maps
and geospatial data to authenticate users and to detect 41 0 0 0 0
and prevent fraud)
Level of use No use Low Medium High
Sources: Global BCG Survey on Location Intelligence for Enterprises (n = 520), October 2020; BCG analysis.
plications across five to seven categories. cate nearby stores highlighting discounts
(See the sidebar “How Companies Evolve and deals; personalized messaging and of-
from Basic to Advanced Location Intelli- fers linked to where customers shop and
gence Applications.”) what brands they prefer, if they opted in;
and measurement of the incremental im-
Geomarketing, which consists chiefly of pact of these offers and promotions on cus-
location-based promotions and advertising tomer spending.
for products and services, is widely used
across all five industry sectors for custom- Companies use geospatial data to enhance
ers who have opted in. At least half and up the digital customer experience across in-
to 78% of respondents say that they have dustry sectors, but especially in travel and
implemented these programs. Retail and tourism, retail and e-commerce, and finan-
e-commerce outfits deploy geomarketing to cial services. (See the sidebar “An Online
the greatest extent, while logistics and de- Bank Uses Geospatial Data to Address an
livery firms are less likely to adopt this Underserved Market.”) Such applications
technique. Geomarketing programs typical- include autocompletion of address infor-
ly include customized marketing messages mation for online checkout and search; vir-
based on a customer’s location; maps to lo- tual tours of sites and locations; map-based
Boston Consulting Group X Google 4HOW COMPANIES EVOLVE FROM BASIC TO ADVANCED
LOCATION INTELLIGENCE APPLICATIONS
Mapping and geospatial data programs and who have opted in, enticing them
are progressing at a rapid pace, enabling to shop by presenting them with
companies that adopt these applications relevant offers
to move quickly from simple offerings to
more complex uses. We looked closely at A growing number of retailers also use
two industries in which location intelli- location intelligence when planning store
gence is increasingly essential, to see locations, taking into account direct
how companies continually enhance the attributes of the particular location (such
scope and impact of their location intelli- as urban versus suburban and level of
gence activities. expected foot traffic), but also under-
standing the surrounding environs at a
Retail and E-Commerce granular level to support better planning
Retailers typically begin using location decisions. This includes leveraging
intelligence to support fairly basic geospatial data on available transporta-
customer-facing activities, such as tion modes, parking facilities, competi-
helping them find store locations or use tors’ store locations and plans, and
an autocomplete utility to simplify nearby retailers and points of interest
online search or address entry. Today, that may have complementary traffic
these are table stakes applications. patterns.
As retailers’ location intelligence As retailers develop their e-commerce
capabilities have advanced, more businesses, some have used location
sophisticated uses involving optimizing intelligence to improve their manage-
the end-to-end customer experience ment and tracking of in-store pickup and
have emerged, including the following: home delivery of products. These
programs aim to ensure that items are
•• Making store-level inventory data available when promised at retail outlets
visible to customers to confirm that a or, if shipped, are picked up by drivers on
product is available before they come routes and schedules that are dynami-
to a store to buy it cally optimized for maximum efficiency
and timely delivery, cutting costs and
•• Scheduling store-specific appoint- keeping customers satisfied. One former
ments and consultations head of online and digital operations at
a chain retailer told us that the company
•• Developing optimized shopping lists “found a 3% to 4% reduction in delivery
and store-level shopping guidance to costs for online orders by better optimiz-
locate products efficiently ing the fleet.”
•• Making in-store recommendations Logistics and Delivery
based on a customer’s past purchas- Initially, logistics companies tend to
es, known preferences, and location focus on fleet optimization and en-
within the store hanced package delivery tracking as
their core location intelligence applica-
•• Optimizing the store experience by tions. Over time, though, some logistics
using location intelligence to predict companies expand their use of location
queuing intelligence to include helping their
largest customers plan their shipping
•• Using geomarketing to communicate locations for maximum efficiency. For
with customers who are near stores instance, helping shippers locate their
Boston Consulting Group X Google 5HOW COMPANIES EVOLVE FROM BASIC TO ADVANCED
LOCATION INTELLIGENCE APPLICATIONS
(continued)
facilities for maximum coordination with distribution center to hold the product
the logistics vendor’s pickup routes and for pickup.
schedules can improve the timeliness of
package pickup, save delivery time, and Logistics company executives who
reduce shipping costs. responded to our survey indicated that
by using dynamic route planning and
Some logistics companies have also optimization they were able to increase
leveraged location intelligence to the number of deliveries per driver by
enhance the end customer’s package 4% to 7%. In addition, using location
delivery experience—for example, by intelligence to provide real-time tracking
offering target time windows for delivery, of vehicles and cargo enabled them to
enabling real-time rescheduling of improve their customer satisfaction
package delivery if no one will be at scores by 6% to 11%.
home to receive it, and using location
intelligence to select the retail store or
search for products and services; and list- To improve operations efficiency and re-
ings of inventory, services, hours, and direc- duce costs, companies use location intelli-
tions for nearby facilities and outlets. gence for network and supply chain optimi-
zation. This is particularly prevalent in
For example, in the real estate sector, com- retail and e-commerce (60%), logistics and
panies often connect the map interface di- delivery (56%), and financial services (49%).
rectly to location-based property data to
give prospective home buyers a multidi- Typically, these businesses use mapping
mensional picture of the neighborhoods, and geospatial data to determine the most
property attributes, commute times, nearby promising sites for stores, branches, offices,
schools, and valuations in the areas they or warehouses, depending on the locations
are considering. According to a project of customers and suppliers and on loca-
manager at one online real estate firm, tion-based cost considerations. For in-
map-based search has become so critical to stance, retailers might combine demo-
customers that the speed at which the map graphic data, proxies for local demand
loads “has a large impact on conversion—a (such as nearby ATMs, gas stations, and
delay of one to two seconds can drive a de- shopping malls), the availability of public
cline in search-to-listing conversion of 10% transportation, and the condition of nearby
to 15%.” road networks to assess the best markets to
enter and the most promising locations
Besides being critical for purely online ex- within each potential market.
periences, location intelligence is increas-
ingly involved in efforts to enhance in-store Another relatively mature operations-
shopping by integrating mobile devices and oriented option is route planning and
location data. For instance, grocers may dis- optimization—which, not surprisingly,
play a smartphone map that shows shop- about three-quarters of all logistics and de-
pers where to find each item included on a livery companies employ. (See the sidebar
shopping list that they create online before “Beverage Company Uses Location Intelli-
visiting the store. More advanced retail ap- gence to Fill Drink Orders in Hours.”) These
plications might make product suggestions companies use location intelligence to de-
and point out store locations on the basis termine the most efficient way to route
of past purchasing behavior. packages and deploy vehicles from pickup
Boston Consulting Group X Google 6AN ONLINE BANK USES GEOSPATIAL DATA TO
ADDRESS AN UNDERSERVED MARKET
Current, based in the US, is a mobile week-over-week at one fast-food chain, as
bank that targets customers who live well as an 8% lift in basket size and a
paycheck-to-paycheck—people whom 10% increase in shopping frequency as
traditional banks tend to avoid because part of a multiple-month campaign with
they cannot serve them profitably. another national restaurant chain. A
Current innovatively leverages location similar campaign with a leading pharma-
data primarily to provide real-time points cy chain delivered a 6% gain in average
and cash back to cash-sensitive custom- basket size and a 3% increase in fre-
ers. The company’s location intelligence quency.
applications include the use of geospa-
tial search to connect location to “Location-based transaction attribution
in-person purchases; geofencing-based is central to our rewards platform
targeted marketing to make relevant business model,” Current’s chief
location-based offer recommendations; technology officer Trevor Marshall said.
standardized payment receipts with store “We are able to circumvent traditional
brand images and location to minimize costly attribution models and provide
calls to validate charges; location more granular targeting to our merchant
monitoring to reduce fraud related to partners. By proving the lift of campaigns
credit and debit card use; and parental with high precision, we are able to garner
controls on teen banking accounts to much higher reward amounts for our
block spending at certain vendors on the users. Location-based attribution enables
basis of location or a maximum spend- us to provide real-time rewards for
ing limit. cash-sensitive customers, which they can
use immediately. Not only are we
Current’s most powerful location providing many customers with their first
intelligence application, however, is a card-based rewards program, we’re able
point-based rewards platform for to offer best-in-class reward amounts
customers who use their debit cards at and a superior user experience, allowing
nearby retail sites. By increasing points them to leapfrog existing options that
for targeted retailers during promotional have not been properly serving them.”
periods, Current has seen an uptick in
spending of as much as five times
location to destination. “Optimizing fleet metrics across a similar range—a high
delivery routes through real-time guidance single-digit to low double-digit percentage
resulted in saving about 30 minutes per impact. Here are some examples.
eight-hour shift, which is about 6% in deliv-
ery time and cost,” said the principal for ro- On average, logistics and delivery compa-
botics and operations for a large global nies reported a 5% to 11% reduction in de-
shipper. livery costs and a 6% to 11% increase in
customer satisfaction. This sector primarily
uses location intelligence for dynamic
Use of Location Intelligence by route planning and real-time vehicle and
Sector Differs but Benefits Are cargo tracking.
Similar
Although priority uses for location intelli- Financial services companies included in
gence vary by industry among the sectors our survey reported 8% to 17% more user
we assessed, location intelligence generally time spent in apps that offered location-
had a significant reported impact on key based, tailored experiences. In addition,
Boston Consulting Group X Google 7BEVERAGE COMPANY USES LOCATION INTELLIGENCE
TO FILL ORDERS IN HOURS
Flaschenpost, a German online drinks Flaschenpost’s location intelligence
delivery company, is a relatively young program has improved customer satis-
startup with an ambitious goal: to deliver faction and increased the likelihood that
drinks to households and offices within customers will order again. It also has
two hours of the order, eliminating the enlarged the average number of daily
need for customers to carry heavy deliveries that each driver can complete,
bottles and wait in long lines for bottle thereby reducing delivery costs. “Every
returns. To do this, Flaschenpost relies minute is crucial for us in terms of
on in-house operational capabilities and financial sustainability and customer
location intelligence to manage routing experience,” said Aron Spohr, Flaschen-
optimization for drivers. This includes post’s chief technology officer. “Even
confirming customer locations and small improvements in location data
providing drivers with turn-by-turn accuracy can have significant impacts. By
navigation that takes into account road using better location data we were able
conditions and other location-based to improve estimated delivery time by 2
factors. By automating driver decision minutes, which in turn saved our 1,400
making, the company reduces driving drivers 30 minutes per driver per day.”
time and errors and meets time-based
delivery goals.
such companies have reduced fraudulent A company in the takeout food delivery
transactions and account applications by sector is disrupting traditional business
up to 30% by using geospatial data to verify methods by innovatively using location in-
customers’ addresses and flag possible dis- telligence programs to facilitate customer
honest activity. ordering and to efficiently identify and
route drivers. Customers who use this com-
Retail and e-commerce companies said pany’s app can track delivery progress in
that they increased their average online real time. The manager of marketplace
cart size by 11% to 15% by using location growth for this company estimates that
intelligence to provide more personalized “adding maps into the customer experience
and timely promotions. They also reduced for pickup orders improves the conversion
average delivery costs by 3% to 4% when rate by about 2 percentage points.” The
geospatial data supported last-mile logis- company has also used geospatial data to
tics programs. optimize pricing in response to differences
in local pricing elasticity. That program
In certain sectors, location intelligence is alone is worth “up to 25% of EBITDA,” ac-
enabling companies to develop disruptive cording to the manager.
business models. For example, a European
online challenger bank outpaced brick-and- Some map-enhanced use cases in various
mortar competitors by using address vali- sectors have already been around for sever-
dation to stem fraud in the application pro- al years and have become table stakes as
cess, primarily by screening for people the feature no longer serves as a differenti-
setting up multiple accounts in remote lo- ating element of the experience, but rather
cations. With this security in place, the has become a core customer expectation.
bank could offer customers instant ac- For instance, financial services activities
counts and such additional location-based such as profiling and segmenting custom-
features as logging credit transactions on ers and providing directions to branches
the basis of merchant location to make and ATMs are now table stakes. And in
identification easier. travel and tourism, maps showing possible
Boston Consulting Group X Google 8itinerary and lodging locations are a re- ing location intelligence and using it across
quirement. Still, it is essential for compa- an organization. Most survey respondents
nies to execute these mature uses well. As reported relying on a wide range of met-
the head of data and customer analytics at rics to track the success of their location
a major travel site put it, “As our industry intelligence programs. (See Exhibit 4.) The
becomes much more competitive and the number of metrics employed across all
use of maps is now standard practice, we companies ranged from 6 for on-premises
have focused more on doing the funda- customer experience enhancement to 26
mentals exceedingly well—for example, for network and supply chain optimiza-
keeping the map up-to-date and leading on tion. On average, individual companies re-
consistency and quality of data.” ported using 5 to 11 key metrics to moni-
tor the success of their location programs
Whether it disrupts or serves as table for each use case category.
stakes, location intelligence is an important
capability across industries. Consequently, Whichever metrics a company decides to
companies must use mapping and geospa- use, leaders typically employ four funda-
tial data to continuously innovate and to mental measurement capabilities to evalu-
support more routine uses that remain crit- ate the performance of their location intel-
ical to optimal execution. ligence programs.
First, they model the return on the initial
Measurement—A Key to investment in developing location intelli-
Unlocking Value gence capabilities. This step is important in
A company’s ability to measure value from justifying the decision to implement a
location intelligence programs correlates mapping and geospatial data platform.
positively with realizing greater value from More advanced companies also measure
location intelligence. This finding indicates the program’s actual ROI over time as they
that developing a nuanced understanding deploy the capability, make subsequent in-
of value is important to successfully adopt- vestments, and realize benefits.
Exhibit 4 | Various Metrics Are Employed Across Use Case Categories
Customer-facing use cases Operational use cases
On-premises
Digital customer Workforce
Use case customer Zone-based Route planning Network/supply Support function
Geomarketing experience coverage
category experience pricing and optimization chain optimization optimization
enhancement optimization
enhancement
Top Time spent on Average keystrokes Time spent in app Average delivery Net promoter Customer Customer
Revenue growth
three website to complete time per order score satisfaction score support calls
metrics address
(ranked
by Address entry error
Revenue growth Customer Customer Customer Net promoter Error rate for
number rate App bounce rate
retention rate satisfaction score satisfaction score score address entry
of
men-
tions in Customer Customer Website bounce
App bounce rate Customer Revenue growth Gross profit Fraud incidents
survey) retention rate satisfaction score rate retention rate margin
Total number
of metrics
employed 17 21 6 17 23 26 21 11
across all
respondents
Average
number of 10 11 5 8 9 7 5 7
metrics used
by respondent
Strategic/financial metrics Tactical metrics
Sources: Global BCG Survey on Location Data for Enterprises (n = 520), October 2020; BCG analysis.
Boston Consulting Group X Google 9Second, leaders conduct A/B testing. An es- hand, while increasing supply chain
sential technique for isolating the incre- efficiencies, on the other.
mental impact on business results of incor-
porating mapping and geospatial data in Anticipate new digital business models
use cases, A/B testing involves, among oth- and shifting customer expectations in
er things, showing different customer seg- which mapping and geospatial data play a
ments variants of a customer experience central role in enabling new value proposi-
that uses location intelligence and gauging tions. The COVID-19 pandemic has acceler-
which variant most effectively drives cus- ated digitization and the opportunity for
tomer engagement and revenue gains. technology to play a larger role as an
More advanced companies continuously interface with customers in all settings. In
conduct A/B testing at scale. this environment, companies should
explore innovative uses of location intelli-
Third, they more effectively use customer gence that leverage digital interactions to
research, such as surveys and focus groups, build deeper and more personalized
to identify critical pain points and assess relationships with customers.
how to apply location intelligence to miti-
gate them. Armed with these insights, com- Systematically prove the value that geospa-
panies can track the impact of their efforts tial data contributes. Use available tools to
through focused measurements. gauge the impact of location intelligence,
including quantifying the initial business
Fourth, advanced companies use multi- case for adoption, tracking ROI, establish-
touch attribution models to tie revenue to ing clear targets for metrics based on
location intelligence programs and tactics. benchmarks, employing systematic testing
These models help analysts assess the rela- and modeling techniques to assess impact,
tive contribution and ROI of various cus- and collecting targeted customer research.
tomer interactions by attributing credit for
a sale to specific customer engagements. Invest in strong data management and
analytics capabilities. These capabilities
should include ingesting geospatial data,
Seven Lessons from Location integrating with other information sources,
Intelligence Leaders building analytical methods to drive
Our numerous eye-opening conversations insights, and enabling more advanced use
with location intelligence leaders yielded cases. For instance, many customer-facing
profiles of companies at the forefront of us- use cases need to be able to link geospatial
ing new types and sources of geospatial data with a customer’s profile and pur-
data and intelligence to enhance their busi- chase history, to support locationally aware
nesses and improve their revenues, profit offers that take into account a customer’s
streams, and customer relationships. (See preferences.
the sidebar “Tales from Location Intelli-
gence Leaders.”) Here are the most import- Consider location intelligence partnerships
ant lessons we gleaned from our discus- carefully and deliberately, focusing on long-
sions with location intelligence leaders. term capabilities and reliability. Develop
these partnerships with companies that
Think broadly and strategically about how have strong reputations and have demon-
to leverage location intelligence to en- strated deep knowledge and expertise in
hance customer experience and improve deploying location intelligence platforms.
operational efficiencies. Look for ways to Respondents to our survey said that the
use mapping and geospatial data holistical- most important factors in selecting a
ly and innovatively, moving beyond a focus location intelligence partner were geospa-
on individual uses to optimize company- tial data accuracy, cost, expected value and
wide synergies across applications—for ROI, freshness and breadth of data, and the
instance, by using geomarketing or custom- location intelligence platform’s compatibil-
er experience personalization, on the one ity with existing technology infrastructure.
Boston Consulting Group X Google 10TALES FROM LOCATION INTELLIGENCE LEADERS
To illustrate how companies in select Retail and E-Commerce: Spencer’s
industries have adopted location intelli- Spencer’s is a large retail chain in India
gence best practices to drive benefits for that sells everything from apparel to
their customers and businesses, we’ve leisure items, groceries, and electronics.
highlighted examples from our discus- The company’s location intelligence
sions with several leaders. programs start with basic location
capabilities that most retailers use—for
Travel and Tourism: A Leading Global instance, online maps and directions for
Hotel Chain customers to locate stores. But Spen-
A UK-based global hotelier was an early cer’s applications go beyond that to
innovator in using location intelligence include uses of location intelligence that
and mapping—including smartphone drive substantial value for the business,
maps—to support hotel search and particularly as the company has moved
booking and to improve guest experienc- into the omnichannel e-commerce
es. Over time, though, similar map-based grocery segment, a rapidly growing
interfaces for looking up hotel locations component of its overall business. For
and amenities have become standard this part of Spencer’s operations, the
throughout the industry. company uses location intelligence appli-
cations for online ordering, including
To improve its location intelligence real-time visibility of store inventory and
program, this company added value- delivery services, which must take into
enhancing data to the map to help account customer distance from the
guests make better booking decisions store to prioritize product-picking
and plan stays. Available types of data sequence and drivers’ schedules.
include travel options, time estimates for
travel between locations, parking One significant business impact that
facilities, local points of interest, dining Spencer’s credits to its location intelli-
options, and directions to onsite ameni- gence platforms is the elimination of
ties or services. The company found that customer orders that could not be
many potential customers—especially fulfilled because the addresses lay
discovery-oriented leisure travelers who outside the company’s service areas. By
don’t mind looking for the right hotel in using location intelligence and mapping
the right location at the right price—want to tell customers up front whether
to see displays of tangible options and nearby stores would deliver to them,
local benefits before reserving rooms. By Spencer’s reduced nonserviceable orders
combining maps with filterable informa- by 98% and enhanced customer rela-
tion about surrounding areas and tions in the process. Spencer’s has also
highlights, the company engaged these used location intelligence applications to
customers more effectively than it had improve its on-time delivery performance
before. An A/B test on the value of which it had previously tried to track
data-enhanced maps showed a 108% with a less reliable manual system. Now
increase in property views and a 12% rise Spencer’s delivers to customers within a
in search conversions to bookings. target four-hour window 96% of the time,
significantly improving customer satis-
“Location is important as a confidence faction and reducing customer calls.
builder for our guests and it can be very
powerful—the hospitality industry has a Spencer’s has risen above the pack of
huge opportunity to use location intelli- traditional retailers by pushing forward
gence better,” said a former head of on some of the more advanced uses of
digital products. location-based information, despite
Boston Consulting Group X Google 11TALES FROM LOCATION INTELLIGENCE LEADERS
(continued)
struggling to implement location-based purchases properties from sellers who
applications with legacy IT systems—a need cash quickly.
problem for many large retailers.
In addition, the company has continued
“Location intelligence plays an important to advance its digital property search
role in Spencer’s online grocery busi- services by introducing new tranches of
ness, but this is only 3% of the overall information to the map (beyond property
business. There’s a huge opportunity to location and multiple listing service
leverage location to improve the conven- data) that are highly relevant to home
tional grocery business as well,” ob- buyers. For instance, the company has
served Jawed Ahmed, Spencer’s general added traffic-pattern-based commute
manager and head of information time data, local school options, a scoring
technology for the grocery business. system that rates the ease of walking to
local shops and venues, and nearby
Real Estate: A Leading Online Real similar home comparisons.
Estate Company
A North America–based online real The company has found that the use of
estate company pioneered map-based maps—even those that are similar to
search for properties, a feature that competitors’ offerings—is critical to the
initially served as a key differentiator but value of customer experiences and must
over time became table stakes as other be executed well. But beyond that,
digital players followed suit. In response, adding specific types of geospatial data
the company significantly expanded the to the map experience has had a
breadth of its location intelligence meaningful impact on business results.
applications by using the most granular A company product manager said, “We
prospective customer data available to used A/B testing to assess the impact of
focus on attracting customers with a new school data on engagement and
high propensity to purchase or rent in found that adding this to the experience
the near term; by using property infor- drove an up to 10-percentage-point
mation, location, and topography to improvement in the conversion of map
model home valuations more accurately; traffic to listing views.”
and by using these valuations to offer a
new service in which the company
Proactively ensure that customers’ geospa- themselves by flawlessly executing the
tial data is protected. Customers are basics, such as map images, geocoding, and
increasingly wary of marketing use of their geospatial data accuracy—as these remain
private data—in particular, their move- core customer expectations and, therefore,
ments and travel patterns. Companies must are critically important to get right.
address customer privacy concerns by
rigorously protecting all data, including
contact data in their profiles, with the Implications for Companies
precautions necessary to build trust. Moving Forward
Our study uncovered a wide array of ap-
Excel at the fundamentals of applications proaches to using location intelligence
based on mapping and geospatial data, across the five sectors we explored. For
including uses that have matured and nearly all companies in these sectors, as in
become table stakes. In those instances, others, location intelligence will be an in-
companies may still be able to differentiate creasingly critical part of their future—an
Boston Consulting Group X Google 12essential aspect of personalizing customer id underlying location-based infrastructure,
engagement online and offline and of opti- capabilities, and partnerships—will be in
mizing complex operations. an advantageous position. As we’ve seen in
our study, location intelligence leaders that
Facing this reality, companies across indus- develop advanced capabilities drive much
tries must take firm steps to improve their higher levels of business performance than
location intelligence capabilities. They location intelligence followers. Companies
must maintain high levels of quality in cur- that become location intelligence leaders
rent location-based uses while also devis- will be able to use geospatial data as an in-
ing new ways to use location intelligence to creasingly important element of personal-
transform customer experiences and busi- izing customer experiences to drive satis-
ness operations. faction and revenue growth and of
optimizing complex operations.
Companies that focus on strategically and
holistically leveraging location intelligence
across their businesses—while building sol-
Boston Consulting Group X Google 13Appendix
Top Use Cases—Financial Services
Customer-facing use cases Operational use cases
On-premises
Digital customer Route planning Network/supply Workforce Support
Use case customer Zone-based
Geomarketing experience and chain coverage function
category experience pricing
enhancement optimization optimization optimization optimization
enhancement
Offer push (3) Provide
(1) Tailor product (5) Provide Optimize routes Redesign Detect/prevent
notification or location
and service directions to for cash delivery territories for staff fraud
service based on optimization
offering location allocation
location
Top use
(2) Profile and Provide Improve branch Predict site/store/ Verify and
cases in
segment information on configuration branch approve loan
ranked
customers service (in-store tracking) performance applications
order
(4) Measure
efficacy of Enrich customer Authenticate
marketing transaction data customer identity
activities and purchase
Improve
onboarding and
responses to
service requests to
enhance customer
experience
Provide virtual
tours of location
Top five use cases for the sector
Sources: Global BCG Survey on Location Data for Enterprises (n = 520), October 2020; BCG analysis.
Top Use Cases—Retail and E-commerce
Customer-facing use cases Operational use cases
On-premises Network/supply
Digital customer Route planning Workforce Support
Use case customer Zone-based
Geomarketing experience and chain coverage function
category experience pricing
enhancement optimization optimization optimization optimization
enhancement
Customize Optimize (4) Optimize
(1) Profile and (5) Provide Improve store
pricing for delivery routes Geofence
segment information on configuration network
individual store for online delivery zones
customers service (in-store tracking) locations
locations orders
Top use Offer push Optimize Offer comprehen-
cases in (2) Tailor product Provide visibility sive logistical info Redesign
notification or real-time vehicle
ranked and service on available stock to third-party territories for
service based on tracking/
order offering in stores logisitcs vendors staff allocation
location dispatching
(3) Measure
efficacy of Provide real-time Reallocate
marketing delivery/pickup inventory
activities status
Improve online Predict
checkout site/store/branch
experience performance
Provide direction
to location
Provide virtual Top five use cases for the sector
tours of location
Sources: Global BCG Survey on Location Data for Enterprises (n = 520), October 2020; BCG analysis.
Boston Consulting Group X Google 14Top Use Cases—Transport and Logistics
Customer-facing use cases Operational use cases
On-premises
Digital customer Route planning Network/supply Workforce Support
Use case Geomarketing customer Zone-based
experience and chain coverage function
category experience pricing
enhancement optimization optimization optimization optimization
enhancement
Use dynamic (1) Use dynamic
(4) Tailor product Provide real-time Dynamically
location-specific route planning (3) Optimize
and service delivery/in-store allocate workforce
price estimates for and network locations
offering pickup tracking for rides/deliveries
ride/delivery optimization
Top use (2) Use real-time
Measure efficacy Provide directions Geofence delivery
cases in vehicle/cargo Reallocate
of marketing to location zones by customer
ranked tracking and inventory
activities location
order dispatch
Simplify entry for (5) Optimize
Profile and
pickup and delivery routes
segment
dropoff with for online
customers
autocomplete orders
Leverage
hyperlocal data for
navigation and
delivery/pickup
Top five use cases for the sector
Sources: Global BCG Survey on Location Data for Enterprises (n = 520), October 2020; BCG analysis.
Top Use Cases—Real Estate
Customer-facing use cases Operational use cases
On-premises
Digital customer Route planning Network/supply Workforce Support
Use case Geomarketing customer Zone-based
experience and chain coverage function
category experience pricing
enhancement optimization optimization optimization optimization
enhancement
(1) Measure (4) Provide Improve Predict long-term Provide real-time
(5) Optimize Redesign
efficacy of information on on-premises trend or estimated arrival
network territories for
marketing property/ location development of time for searched
locations staff allocation
activities neighborhood configuration property prices property
Top use Employ property Offer push Optimize pricing Assess potential
cases in (2) Profile and for commercial for housing
search based on notification or
ranked segment property development;
accessibility/point service based on
order customers (footfall/traffic) optimize
of interest location
investment
(3) Tailor product Provide virtual
and service tours of location,
offering etc.
Provide
information on
service
Improve search
experience with
address
autocomplete
Provide directions
Top five use cases for the sector
to the most
accessible location
Sources: Global BCG Survey on Location Data for Enterprises (n = 520), October 2020; BCG analysis.
Boston Consulting Group X Google 15Top Use Cases—Travel and Tourism
Customer-facing use cases Operational use cases
On-premises
Digital customer Route planning Network/supply Workforce Support
Use case customer Zone-based
Geomarketing experience and chain coverage function
category experience pricing
enhancement optimization optimization optimization optimization
enhancement
(3) Help customers Provide Optimize room Optimize
(1) Tailor product Optimize Redesign
with itinerary tours/additional pricing based on light route
and service network territories for
building/ info on current location and demo and schedule
offering locations staff allocation
optimization location, using data planning
Top use Provide augmented reality
(2) Offer trip info Predict
cases in information on Offer push
and deals based site/store/branch
ranked location/travel notification or
on location data performance
order destination service based on
(4) Measure Improve search location
efficacy of booking
marketing experience with Customize in-flight
activities autocomplete entertainment
(5) Profile and
Provide virtual
segment
tours of location
customers
Top five use cases for the sector
Sources: Global BCG Survey on Location Data for Enterprises (n = 520), October 2020; BCG analysis.
Boston Consulting Group X Google 16About the Authors
Robert Archacki is a partner and associate director in the Austin office of Boston Consulting Group. He
leads the B2B marketing topic globally. You may contact him by email at archacki.robert@bcg.com.
Kurt Hogan is a managing director and partner in the firm’s Bay Area office. He is a core member of the
Technology, Media & Telecommunications and Technology Advantage practices, specializing in digital
transformation. You may contact him by email at hogan.kurt@bcg.com.
Michael Fraser is a managing director and partner in BCG’s Los Angeles office. His work focuses on digi-
tal, technology, and data topics across industries. You may contact him by email at fraser.michael@bcg.
com.
André Georgi is a project leader in the firm’s Bay Area office. His work focuses on digital transformation
and software development across industries in the US and Greater China. You may contact him by email
at georgi.andre@bcg.com.
Boston Consulting Group partners with leaders in business and society to tackle their most important
challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was
founded in 1963. Today, we help clients with total transformation—inspiring complex change, enabling or-
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