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Whitepaper: Why do smartphone users allow access to location?

For the latest innovations in mobile customer experience to be effective, customers must allow access to location services and Bluetooth. So are customers opting in? And if so, why and when? This whitepaper provides insight from analysis of over one million mobile app users across the UK, USA and Australia. It explains why customers allow access to location and identifies best practices to ensure customers opt-in.

To better understand how customers are adopting and using location services, Localz conducted a survey across 554 smartphone users across the United States, United Kingdom and Australia. From these respondents, 54% had an IOS device and 46% owned an Android device. We then analysed the smartphone settings of over 1 million Localz users, that is people who are using a mobile app which has the Localz SDK installed.

Why location technology is important for mobile apps

In the past couple of years, the number of smartphone owners has increased significantly. At present,1.91 billion people [1] use mobile devices worldwide and Cisco estimates that this number will increase to 50 billion by 2020 [2]. This has pushed businesses to create apps and mobile-friendly websites to reach out to their tech-savvy customers.

Smartphone users are doing everything through apps – chatting with friends and family, shopping online, turning lights on and making coffee remotely. Businesses are looking to location technology to provide an innovative edge to the services they provide via mobile apps.

Location technology enables businesses to understand where a customer is, via their smartphone, in the physical world. Businesses can communicate with their customers, or trigger another action such as alerting staff in a retail store, in real-time based on the customer’s location. This opens up a whole new world of additional services that can be provided to customers. However, to enable these new customer experiences, customers have to enable location services or Bluetooth on their smartphone and allow apps to access them.

Customer value is the key for access to location services

To understand why customers are or are not opting-in to use of location services, we first need to know whether people are aware of the location services and privacy settings on their smartphones. Our research showed that a surprisingly high 91% of survey respondents were aware of these services. This was across both that Android and IOS device owners.

So why then do people choose to allow or disallow access to their location? The answer is in the perceived value to them. When asked if they would allow an app access to location services if it provides them with a better service, 80% were ‘very likely’ or at least ‘somewhat likely’ to allow access. Specifically, people seemed most open to allowing access if it saved them time, money or provided more accurate directions.

As we discovered above, take up of location services differs depending on the use case and the perceived value to the customer. Our research included the following types of apps and use cases across one million devices.

Industry (UK only)        Location enabled use case
Food delivery app Location triggered offers
Luxury car brand app VIP check-ins at onsite arrival
Retailer app Click & Collect remote check-in
Public event app Reminder to use the app onsite
Overall sample size: one million unique device IDs (app installs)

 

What activity provided the highest perceived value?

The activity that had the highest perceived value for allowing access to location, by some margin, was way finding. Searching for businesses nearby and services to improve deliveries, were also perceived as having high value. It seems that the perceived value of allowing access to their location for things like receiving discounts and tagging on social media is much lower.

smartphone users allow access to location services geofence capability

When asked why they might deny access to location services, 75% of the respondents cited concerns about privacy and 61% were concerned about information being misused. Other reasons included concerns around battery life and limiting data usage.

why users deny access to location services. Privacy concerns. Battery Life.

This suggests that providing customers clear information on why you would like to use a customer’s location, such as to save them time when they collect their parcel, is key. It is also important to be clear that you will not share their location with third parties, and make privacy policies clear and easily accessible.

Location Services and Bluetooth

By enabling an app to access the location services on their phone, customers are allowing the app to use GPS based technology, such as geofences. A geofence uses GPS coordinates to define an area in the physical world. Many experiences can be triggered by geofences, such as alerting staff members as a customer approaches a store, based on them entering the geofence. These experiences can be triggered in the background. This means that the app can simply be installed on the phone, the app does not have to be open to trigger the experience.

GPS and geofencing have limitations, however. Geofences work well for sites of several metres to several kilometres radius, such as a store site in an outdoor environment. However, they don’t work for smaller distances or indoors, which is where beacons become a good option.

To provide beacon based experiences, customers need to have Bluetooth switched on, as well as location services. Our research showed that, without well designed coaching, a lower number of people had Bluetooth switched on.

Of the over one million devices analysed, 90% of both Android and IOS users had location services enabled on their devices, and 58% had authorised location services for the app specifically. This means that in more than half of the devices, the app had access to location services that could be used in conjunction with a geofence.

However, only 27.8% of devices had Bluetooth enabled. Beacon technology requires Bluetooth to be switched on. The good news is, in the various real-world trials Localz has done, this number can be increased by providing coaching screens, encouraging customers to switch Bluetooth on, and explaining why. Again, where a customer sees perceived value, there is a higher uptake.

Best practices for getting users to turn on location services

To encourage customer’s to allow access to location services and to switch on Bluetooth, businesses need to clearly communicate the benefits to their customers.

Here are some key tips on how to accomplish this:

  1. Provide well-designed coaching screens for the customer when they are installing and opening the app. These should emphasise the benefits of turning on location services and Bluetooth.
  2. Clearly state what location information is used for – just before the location permission pop up is triggered.
  3. Provide an app banner at the top of the app when it is in the foreground, showing when location services or Bluetooth are off.
  4. Use geofences to remind customer’s to switch on Bluetooth as they move inside a venue. A larger number of customers have location enabled, and this will help to increase Bluetooth usage. Messages can be customized to only be sent to those without Bluetooth on, and you should limit the number of times you remind them.
  5. Advertise the benefits of allowing location services when using the app. Focus on how this saves customers time and money. This is ideally done via a combination of physical, online and mobile branding, with enthusiastic staff encouraging the use of the app in-store.
  6. Demonstrate true value to customers. The real reason customers will opt-in for location services is because they see the value for themselves. Use location technology to save customers time and money, and to provide them with a better service and experience.

Conclusion: Value exchange is the key

We concluded through our research, that customers are happy to share their location if it saves them time and money and gives them a better customer experience. Using location services to provide good value to customers, and clearly communicating that value to them, is key to maximising uptake of location services.

Download Whitepaper: Why do smartphone users allow access to location?

You can read the full results of the Localz Location Survey here.

 

[1] Source: http://www.smsglobal.com/thehub/smartphone-ownership-usage-and-penetration/
[2] Source: http://investor.cisco.com/investor-relations/news-and-events/news/news-details/2015/New-Cisco-Internet-of-Things-IoT-System-Provides-a-Foundation-for-the-Transformation-of-Industries/default.aspx

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