Location-based services could deliver new wave of innovation in mobility sector

Digitalisation is now a force in all areas of people's lives, with Gartner putting the number of devices connected via the internet at over 8.4billion.

This trend offers many opportunities both for private individuals and for enterprises.

Despite this, many businesses are not exploiting the full potential of apps and mobile engagement to make contact and enhance customer loyalty.

Traditional companies in the mobility sector are also discovering how the relevance and added value of a customer app can be heightened with location-based services (LBS).

A recent study by the Location Based Marketing Association (LBMA) shows that German companies see location-based services as a key element of their corporate strategy.

"As a result, they are also investing in these services," says LBMA CEO and region director Carsten Szameitat.

Sometimes consumers barely register this technology outside of marketing campaigns – also because many opportunities are left unexplored.

Opportunities in the legacy mobility sector

Companies investing in LBS are showing it can do a great deal more than reach customers at the right time and place.

"In future, you won't need a ticket for the train anymore. The train can see from the passenger's mobile phone that they have got on board," says German Rail chief executive Richard Lutz to the Bild am Sonntag newspaper.

"The journey is billed automatically, depending on where they get off. The system works with the help of an app that can determine the travellers' position at any time."

Even traditional companies in the mobility sector have recognised the potential of location-based services.

But identifying the traveller's location with a mobile app is only the first step.

A completely new dimension of customer interactions only starts when travellers are offered a bundle of mobile services – each adapted to the individual travel route and means of transport, the current situation, location and customer needs.

Companies can get to know their customers better, optimise the travel experience and so add value for their passengers.

An international pioneer

One pioneer at an international scale is Uber, which demonstrates how an app can be used to continuously expand its range and open up new revenue streams at the same time.

Within the Uber app, content partners send the passenger information during the journey about the current location, entertainment offerings and information about the destination, as well as providing other external mobile services.

Uber sees the marketplace as one of the most important areas for its own business growth – alongside its core business of rides.

Public sector projects 

Projects are also being successfully implemented in the public sector.

One example is Swiss railways, which has offered LBS on its "My Station" app since January 2015.

Indoor navigation and mobile payments are available to passengers using this customer app.

Information about changes to departure or transfer times and local shopping offers are played out to users at their individual location, right onto their phones.

The Dutch public transport system Syntus shows how LBS can be deployed to spread travellers optimally across rush hour traffic, for instance.

In addition to mobile ticketing, Syntus introduced a loyalty program that gives app users points for their journeys.

Customers are given more points for trips outside peak times as an incentive.

Syntus compensates them for delays in the same way and so achieves greater customer loyalty and customer satisfaction.

In addition, the app with integrated LBS enables valuable insights to be gained about customer behaviour.

"LBS is a topic still mostly associated with solutions from start-ups," says Szameitat.

"But there are also established providers that offer innovation in terms of customer loyalty and scalability as well as the necessary expertise.

"Companies should work with the right partners to exploit LBS for themselves and develop intelligent joint applications," he says.

The time for small pilot projects is over, especially in the mobility sector – the key here now is to digitalise across all channels, to meet customer expectations and so to secure market share.