The concept of Geofencing originates from military-level GPS applications for the US Navy beginning from the 1960s. Today, geofencing has widespread applications in several industries and ‘on-demand apps’ is not an exception. A very common example of geofencing in this modern world is tied with food delivery apps. Right when the order is about to be delivered and the delivery agent has reached the decided proximity on the map, the system automatically alerts the customer to be prepared. It is done via ‘Geofencing technology’.
So, before further ado, let’s know what is geofencing:
What Is Geofencing?
A geofence is a virtual fence or geographical boundary which enables computer algorithms to trigger a response at the time when a particular hardware equipment (GPS sensor, RFID, Wi-Fi) enters the virtual premises. Geofencing can work with RFID, cellular networks, GPS, and Wi-Fi.
Image Source: Wikipedia
How Geofences Work?
From the end-user's perspective, geofencing looks like a simple radius used around a certain point or it can be a parameter drawn around a certain location in the map. Geofencing is widely used in proximity marketing where it is used to target people entering a specific building or area.
What are the different use cases of Geofencing?
We’re surrounded by some very common uses of geofencing starting from customers getting notification from Google about their check-in experiences. Also, the geofencing feature is used in several other use cases such as school apps notifying parents of their children’s arrival, health tech apps alerting the elderly caretakers, or on-demand apps notifying the customer about order delivery.
Geofencing is also used in the public service and defence. In public services such as emergency services, it is used to draw a perimeter around a hazardous location so that the authorities can warn people to use an alternate route for travel.
The mobile apps equipped with a geofencing capability isn’t just limited to some common use cases that we know. There are a variety of business applications where this feature is used. Here are some:
- On-demand business applications: In on-demand delivery businesses, geofencing is used to automatically assign customer orders to nearby delivery agents and to also, to notify customers about their order pickup and delivery status. In the case of on-demand apps business, geofencing is used to assign the service providers dynamically depending on their location.
- Transportation Management: To track the flow of people that are using the public transportation system. Also, used to integrate the public transport system with autonomous vehicles or ride-sharing applications.
- Real Estate: To know the amount of footfall walk by the specific real-estate location.
- Brick and Mortar store: To guide the customers about specific products as soon as they are near to it.
- Network Security: To improve the security of wireless local area networks they use geofencing to limit access to the designated users and devices.
- Inventory Management: To keep the assets secure by restricting the movement of expensive assets into a certain boundary i.e. warehouse or factory boundary.
- Human Resource Management: To monitor the employees, especially working outdoors, by tracking their activities to make sure that they are working in the allotted area.
Real-Time Geofencing Visualisation
An effective geofencing application will always have an easy to manage User Interface (UI). The UI element is critical for the app as it enables the administrators to easily manage the existing geofences or add some new ones in real-time. Adding new geofences might involve a geofence to restrict the boundary for any movable asset.
The app’s admin panel should articulate all the existing geofences with modification capability. It will enable the managers to easily increase or decrease the geofencing parameters depending on several parameters. For example, in case of a taxi-booking on-demand mobile application, the option to adjust the area-wise availability of all the cabs is very critical during peak hours. The admin can easily set availability radius using the geofencing visualisation.
Undoubtedly, the real-time geofencing visualization system will provide the administrator with a bird-eye view to manage the demand and supply.
Let’s take an example
The ability to see things from a bird-eye perspective sounds very fascinating, but a perfect geo-fencing application would require more than just radius-based geofencing. The shortest distance between two locations on the map will differ depending on the mode of transportation.
For healthcare on-demand apps, arranging the house calls of nurse practitioners for parents with sick children can be made possible using the mix of radius-based and zip code based geofencing. The zip code geofencing can be used to define the area of operation for each hospital. Furthermore, the radius-based geofencing should be created for each nurse practitioner to provide them with increased accessibility. Also, it is crucial to integrate routing API with your mobile app to optimise your algorithm. It will help the service providers know the real estimated time to travel.
How Geofencing can benefit your business
The geofencing features are being used for several business outcomes. It can be the need to automate a time-consuming activity or it can be to target new customers, generate data for the business, secure a property or asset, or to prevent affluent mishaps. Building a mobile app requires a significant amount of investment and effort and therefore the ROI roadmap should be clarified even before developing the app. This is for, many on-demand businesses use geofencing as an intrinsic part of their business model.
Amazon Go is using Geofencing
If a large-scale retailer is concerned about competing with Walmart, the concern is valid. Walmart is huge, but even Walmart is concerned about Amazon. According to a citation by Bloomberg, by 2021, Amazon is planning to open up to three thousand cashierless convenience stores named, Amazon Go.
The cashierless convenience stores will make use of Mobile Wallets, Geofencing technology, Loyalty Programs, AI technology for facial recognition, and many more. The company is testing the idea with a store in Seattle.
Application of Geofencing in several domains
The geofencing functionality brings many opportunities for the businesses. The following are the most common uses of geofencing in the modern-day applications.
1. For On-demand Apps
The on-demand businesses make use of geofence technology to match the customers with service providers. This technique is very crucial for every customer request for on-demand apps. The on-demand app retrieves geolocation data from the user’s device to determine which geofence the user is located in and provides them with suitable services.
A recent newsletter from Uber announced that the company has partnered with San Francisco-based Marin Transit to share its on-demand platform as software as a service. The public transport company will leverage Uber's platform capabilities to increase their customer convenience. The Uber platform’s geofencing capabilities will help the transporter to streamline its demand-response transport services the same way as it helps the on-demand businesses.
The on-demand applications that rely on real-time geolocation tracking can also be benefited with geofence technology. The geofences will help them automatically deliver important updates to the customers, for example, by triggering an automated transactional notification to the customer when the driver reaches the area nearby (geofence boundary).
This application of geofencing technology is the most widespread among all the use cases. In recent years, businesses have been using tactics to use geofence technology to target customers based on their geographic location. Since the early days of geotargeting, Starbucks has been running marketing campaigns based on the user's location. They used geofencing technology to send push notifications to the users about the nearby stores, sales promotions, even interest-based offers like discounts of favourite drinks. This resulted in a powerful way to increase footfall in the stores and promote customer engagement.
Geofence-based marketing campaigns can boost the effectiveness of rich notifications that are inclined towards promoting requests for feedback or social sharing. Even some brands have started using geofence-based marketing to win the competition. Such competitive marketing techniques use geofencing technology to build geofences around the competitor’s locations and push incentivised offers to the customers who enter those geofences.
Sending promotional content to the users based on their geographic location is a proven way of promoting user engagement. However, it has its own set of limitations too. This approach is very much sales-oriented and may not be more beneficial in the terms of long-term success. The usage of mobile apps is growing with each passing day, which means that our notification tab is always loaded with alerts or messages from apps that are very demanding and desperate to snag the user's attention.
Most of the information users receive on their mobile phones are nonessential and does more harm than good, eventually encouraging the users to disable notifications for the particular app. Still, as discussed in the Starbucks example, if used with a proper strategy, geofencing technology can bring fortunes to a business.
The Internet of Things technology is always fancy to talk about. It is making homes smarter and workplaces more efficient and safe. From a consumer point of view, even the seemingly mundane day-to-day activities of making a cup of coffee or ordering groceries gets a small thrill when done via the smart devices.
The ability to remotely monitor and control electronic devices in your home or workplace is always handy. Amazon's Alexa is taking the use of geofences to the next level. After permitting the Alexa app to access their location data, a user can preset routines which are location-based and that only kick in when the user crosses the geofence.
For example, the user can ask Alexa to turn on the thermostat when they are on their way back to home, even play music at the arrival, or turn off the lights and HVAC system as soon as the user leaves. The on-demand apps can even remind the user about specific activity based on their location: “Alexa, remind me to send the proposal as soon as I get to work.”
4. Limiting Device Usage
Restricting the usage of devices based on the location is a great use case of geofencing technology, especially in the security domain.
In 2015, an unknown drone flew above the White House property. Later, the authorities found out that the drone was operated by a civilian. Right after this incident, the need for drone regulations arose. The US government proposed a law which requires every drone manufacturer to integrate geofencing restraints into the unmanned aerial vehicle navigation system which can override the actions of anyone who attempts to enter the restricted airspace.
Later in 2018, the similar law was proposed in the United Kingdom right after the Gatwick airport drone incident which happened in December 2018. The incident took place when drones were seen close to the runway, resulting in over 1,000 flights being delayed.
5. GPS asset tracking
Many warehouses and manufacturing plants use geofencing technology to keep their assets safe. It is a very common use of geofence in several industries. To prevent assets from theft or misplacement the warehouse or plant can set a geofence in relation to the vehicle. If required, the geofence can be integrated into the security system to alert the security staff about the issue.
Not just to track assets, Geofencing can also be used to keep track of people. The geofencing technology is common in child location services, where parents can set up geofences around their home and the system will notify them when their child arrives or leaves the home. The same type of system works for pet tracking as well.
The law enforcement services use geofencing technology into their offender monitoring systems. It is used to track the offenders who are confined to a specific area. The geofences make sure that anytime when the offender tries to leave the area, the authorities are instantly notified in real-time.
How do you want to use Geofencing?
Throughout the article, we’ve talked about many ways in which the geofencing technology can be used for the betterment of several industry verticals. The on-demand apps are the largest benefactors of this technology currently.
After you’ve been reading this article, you are probably a lot more interested in implementing the geofencing technology. Let us know in the comment box how you want to use this technology and ask any questions that you may have. You can also reach out to us at firstname.lastname@example.org.
Madhukar is marketing communication specialist at Nimble AppGenie. A writer by day and reader by night, he specializes in technical blogging. Throughout the time, he has been helping businesses by writing valuable business guides and articles. Nimble AppGenie is a renounced fintech and healthtech development service provider that is helping small-large scale enterprises.