By Jacob Schlessel
Nowadays, it seems as though everyone has their phone with them at all times, whether it be in their hand or in their pocket. Businesses have begun to cash in on this fact by collecting and analyzing what is known as mobile location data, which has become increasingly important in guiding business decisions and economic strategy.
What is mobile location data?
Mobile location data is information about the geographical location of a particular device, typically a cell phone. Using the GPS receivers built into many modern-day devices, it is possible to collect and store data about where the device has travelled to, how much time it spent at different locations, and the speed at which the device travelled. Dedicated data companies, like placer.ai for example, supply businesses with data about consumer travelling behavior in both local regions and on a national scale. These services are often offered as a subscription-based package with a monthly fee.
So how do data companies get a hold of users’ location data, and what systems are in place to protect users’ safety and privacy? Because mobile location data is highly sensitive, data companies have taken extra care to implement measures that prevent any given data point from being traced back to the person who it was collected from. Data companies do not actually collect their own data, and they must first partner with mobile applications to buy the data collected by their individual applications (think Snapchat, Instagram). These apps only collect data from users who opt-in to enabling location services within that specific app from their device settings, so no data is collected from users who deny apps access to their location. The owners of the application then aggregate the data they collect from all users who opted-in and anonymize it by removing personally identifying information like name, IP addresses, device make and model, and more. Data companies like placer.ai then purchase anonymized data and extrapolate to identify larger populations and overall patterns. This way, it is impossible to trace back the exact source of any data point, thus protecting the user’s identity.
How can businesses and economic developers use mobile location data?
Businesses are not interested in the travelling habits of any particular individual, rather they want to analyze the behavior of consumers in aggregate to identify trends and patterns. Foot traffic of an area is one key metric that businesses may use to compare prospective properties for investment. Imagine you are the owner of a shoe store and you are deciding between opening a new location in one of two empty storefronts in different malls. By analyzing mobile location data, you realize that one mall has had a twenty percent decline in foot traffic over the past five years, while the other has seen an increase in foot traffic of thirty percent over the same period. Based on insights provided by location data, you can choose to strategically open your new location in the mall with growing popularity to expand your customer base as much as possible.
Businesses can also identify trends in common routes travelled by consumers. Data is collected on the start and end points of consumer journeys, like from Costco to Walmart or from Mystic Aquarium to Applebee’s. This type of data can also be measured in more broad categories, like traffic going from superstores to gas stations. Businesses may analyze these patterns to make strategic decisions about where to invest in building new locations and may target properties along popular routes with little existing competition in their respective spaces. Consumer routes can also advise in advertising spending, as routes with more traffic from a specific demographic of customers may result in higher returns on investment.
The takeaway
Economic developers cannot afford to ignore the value that location data brings to businesses in all types of industries. By analyzing location data, one can understand consumer behavior in ways that would be otherwise impossible through older, more traditional methods such as surveys and polls. As a result, any investments in community businesses and infrastructure will likely bring greater returns for the region, since the insights provided by location data enable a more detailed understanding of the area’s economic needs. All business advising firms and economic development agencies should stress the importance of mobile location data to their clients and include analyses of this data in their research. By providing clients access to location data through providers like placer.ai, Echo Analytics, Veraset, or other reputable location data providers, economic developers can deliver greater value to local businesses through data-driven growth strategies.