Location, Location, Location

Do you know where your customers are right now? Get ready for GPS and other emerging location services to change the way businesses view the meaning of location.

Retailers have always known physical store location is critical to success. Simple really: If your customers cannot find you, you’ll have a hard time realizing value.

Think of brands as location, too. Brands are not only associations; they inhabit valuable real estate in our collective minds. The Internet’s early days are often referred to as a land-grab. The objective was to shore up the best “locations” possible, associations between an intuitive, memorable address and cyberspace real estate. In virtual reality games today, a big trend is the development and assignment of value to virtual space. Location matters in physical space, mental space, and cyberspace alike.

Does cyberspace erase the importance of physical location? Does it matter where Amazon.com is physically located? The customer doesn’t care, so long as the goods are delivered reliably and cheaply. But clearly, Amazon’s location in cyberspace does matter. So does its location in the consumer’s mind.

Although business through the ages has been focused on securing prime physical, virtual, and mental real estate, the meaning of location is undergoing fundamental change. Future success will not only depend on sellers securing location but will increasingly be about sellers understanding their customers’ locations.

In a customer-location-centric worldview, physical location matters more than ever to businesses that want to serve 21st-century customers. What matters is not the seller’s physical location, but the customer’s real-time location.

Marketers already use location to select and target customers, you might argue. Impressive-sounding terms such as psychographics and geocoding are part of many direct marketers’ vocabularies. A home address is used to determine what kind of car I might be able to afford. The distance from my home to a store determines whether I receive a notice of an in-store sale.

But “select and target” isn’t what I’m referring to. Rather, it’s the dynamic location of each and every customer at all times.

By late 2004 or early 2005, the physical whereabouts of every new mobile phone in the U.S. must be traceable, enabling 911 operators to pinpoint a call’s location. Nokia will release a sports phone this fall with a GPS clip-on that can accurately record its location within just a few feet. Suunto, Finnish maker of sports watches, now has a location-aware watch based on GPS. And Japanese camera-maker Konica has a digital camera that records the GPS location of every picture.

Handheld GPS device manufacturers, such as Garmin, are expanding with new types of applications, including integration with PDAs that provide location-aware directions. Most luxury cars these days are sold with integrated computer-generated directions. Services such as General Motors’ OnStar come with a personal valet options. In addition to providing directions, OnStar can help find a hotel and theater tickets and make restaurant reservations as well as other useful services, all based on knowing where the user is.

As I wrote in April, Internet search services are also becoming location-aware, allowing us to find products and services associated with a physical location. Bridges connecting virtual and physical space are being built everywhere. Futuristic visions of merged physical and virtual spaces can be found in books such as William Gibson’s classic “Neuromancer” and movies such as “The Matrix” trilogy. These are entertaining and fascinating science fiction. But location-related developments will affect us much sooner than these futuristic scenarios.

A lot changes when the whereabouts of the electronic devices we carry with us and depend on are always known. Caller ID no longer applies just to phone numbers; it also pinpoints a caller’s exact latitudinal and longitudinal coordinates.

As we move around during the day, we’ll leave a trail of bits behind us that pinpoint our location at every moment. Every digital photo we take, every purchase we make (online or off-), every phone conversation we have, every word we type on our laptops, every meal we have… everything we do will be tagged with a location. A phone call from the car on the way home will automatically tell our families how far we are from home. Imagine typing “coffee shop last week” into the search agent on your laptop and finding all the documents you worked on while at a coffee shop a week earlier. Phoning for a taxi will automatically route a car to the location you’re calling from.

It may seem obvious that portable devices, such as mobile phones, PDAs, and cars, become location aware. But the ubiquitous presence of location information will have much broader implications than simply helping people find their way.

New location-based information will emerge, information that presents itself based on where you are and what you’re doing.

Computer operating systems will become aware of location, tagging everything that’s created or modified with physical coordinates. Purchasing from a computer within the physical boundaries of your home will become an additional layer of authentication, increasing transaction security.

Communities based on location are forming. Mobile-phone-based services are already emerging, allowing people with profile matches based on “similar interests” to connect if they’re within physical proximity of each other. How about a service that lets you (anonymously) share your daily location log online, comparing it with others to find those with similar movement and activity patterns. You could share your favorite hikes and walking tours, trip logs from a bike excursion, or simply your commute to find carpoolers who travel on your schedule.

Location has always mattered in commerce, but businesses have had a self-centered view of place. Get ready for customers who demand you know where they are. If you want to have a location in their mental landscape, you’ll be expected to know their location and to be there for them when they need you. Don’t wait for them to know where you are.

Nominations are open for the 2004 ClickZ Marketing Excellence Awards.

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