Five Points on the Future of Geolocation

I’ve been thinking a lot about geo-location services like Foursquare and Gowalla lately. I’m fascinated by how they are and aren’t catching on, what they mean, and what they will look like in the future.
It’s interesting to watch Facebook, Google, Twitter, and a slew of others integrate geolocation into their products and then see companies like Jimmy Choo and Gap experiment. The press tends to cover geo like it’s the next big thing, but something in my gut is telling me that Foursquare, Gowalla, and all their competitors need to evolve before they make an inherent impact in the consumer process for the mainstream. Below are a few thoughts on the status and potential future of geolocal.

1. It can’t always be about the discounts.

A friend of mine described Foursquare as a service where you “check in to get discounts sometimes.” This is a common perception of geolocation services (for people outside of the social media world) and this has to change unless geolocation wants to succumb to a paltry existence as “the next generation of coupons.”

If Foursquare continues to be perceived as a discount service, not all businesses will want to sign up. If they did then every business would have to have some sort of discounted good, and this is not the future of shopping. As consumers we have become more conscious shoppers, not shoppers who will only accept a deal. If we were only discount shoppers then everything would be discount, and discount would become regular price. Impossible.

Because some people will never choose to discount, some businesses will be wary of geolocal as long as it is perceived as a mobile coupon. This continues the “you may or may not hit a deal while you’re out” trend of services like Foursquare, meaning “sometimes” will become the operable word in my friend’s not so convincing description of what Foursquare does for people.

2. If the niche services don’t innovate, a giant will take over.

Google, Facebook, Twitter. The most common services known for social media are all taking a hack at geolocation. None seem to have earned the same recognition as niche services like Foursquare and Gowalla, but in time the giants will either figure out geolocation or become similar enough to the niche services that people will have no reason to tend to yet another social account. If the niche networks don’t move, the giants will engulf them.

3. Badges are not enough to save geolocation.

Foursquare’s badge system was pretty revolutionary in the beginning. It was an important contribution in the marketer’s mind as a means for applying game theory to the consumer process. There will always be people who chase badges (just like there will always be people who play social games like Farmville), but I think a lot of people are starting to see through the badge. Badges are quick and superficial forms of satisfaction, perhaps only good because of the vanity factor. The badge, in its current form, is not enough to save geolocation.

4. The loyalty factor needs to evolve.

Right now loyalty programs as they relate to geolocation are either mostly meaningless to most people, or technology savvy PR moves. I want to see someone do a study on what mayor-ship and Foursquare did to affect business loyalty. My guess is that the geeky, already existing regular is now the mayor of most of the venues that utilize Foursquare. Sure, some of the regulars competed, but I don’t hear about people fighting to become mayor anymore and I don’t think people start frequenting places often because of Foursquare. Will Foursquare users take suggestions? Yes. Are tips and insight effective on Foursquare? Yes. But a free cup of coffee just doesn’t seem like it’s going to drive business the way it needs to.

Instead, if I were one of these geolocation services looking for an edge, I would be doing everything I could to find a way to create loyalty programs for CVS, Barnes and Noble, and every other business that could benefit by cultivating customers. I would make these digital loyalty plans customizable, measurable, and easier to execute via geolocation than through the old plastic card model. Then I would remix the loyalty system as we see it today, beef it up, and add meaning for both the business and the consumer, and make the whole model executable for any size business.

People could have one loyalty program that keeps track of everything from when they’ll get their next free cat toy from PetSmart to when they’ll get their next coupon from the grocery store.

To top it off and add revenue to geolocation services, I would let businesses pay to deliver highly targeted messages to their consumers that have opted in on push notifications. Businesses could use geolocal to seek feedback, interact, or just remind specific consumers that their next reward is just around the corner.

5. The process of integrating geolocation services with mobile payments could help make geo more prevalent.

Wired Magazine wrote a piece a few months back about the future of money. They envisioned an economy where paper money was obscured by mobile phone payments that are connected directly to your bank account.

It’s one step beyond the credit card, and with a little tweaking geolocal could integrate with social shopping services like Swipely This could reduce the channels that consumers are using (e.g. eliminate checking in on Foursquare, reviewing on Yelp, paying with Square, etc), as well as help make the checking in process more automatic. The data all that delivers would be incredibly rich, and geolocal services could gain incredible insight into consumer behavior.

What do you think?

What role has geolocation played in your life? Do you use and/or like these services? How can they improve, and what’s to come in the future? I’d love to hear your thoughts.

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