Wed, 26 Feb 2020

Geofencing Market is forecast to reach $2.3 billion by 2025, after growing at a CAGR of 22.4% during 2020-2025. The rising growth of spatial data requirements as well as solutions to expand applications of spatial data have led to increased demand for geofencing in recent years Growing public interest towards media and marketing programs utilizing geofencing solutions and products will further enhance the overall market demand for geofencing during the forecast period. These programs will use virtual perimeter solutions to implement geofencing location-aware solutions. These location-based services will be used particularly for promotional programs and other such applications. This will drive the positive Geofencing industry outlook during the forecast period.

Key Takeaways

• North America dominates the geofencing market owing to increasing demand from SMEs as well as the significant growth in digitalization adoption by major companies.

• The growing popularity of new age spatial data solutions, such as the location analytics and geofencing, will aid in the market growth of geofencing solutions

• Increasingadoption of location based services, implementation of stringent government regulations related to fleet and freight management will increase the market demand for geofencing in the near future, especially for the Transportation sector.

• Increasing concerns regarding location data tracking, particularly in U.S and European countries will create hurdles for the geofencing market

By Application- Segment Analysis

Asset Management segment heldthe largest share in the Geofencing market in 2019. Rising usage of geofencing for tracking employees, particularly with regards to entry to particular zones will drive the adoption of geofencing for asset management solutions.The significant adoption of Real Time Location System (RTLS) solutions based on RFID for employee tracking, particularly in healthcare in the U.S. and Europe is anticipated to be the major market driver. There is also rising demand for spatial data based APIs and tools access management geofence services for device data communication and interaction, and security services. This is a major driving factor for rising adoption of geofencing. However,increasing concerns of employees and customers regarding location data tracking will limit the market growth in U.S and Europe for Customer Tracking in Retail and Asset Management in healthcare sectors.

End Use Industry- Segment Analysis

Transportation and logistics sector has been the primary market for geofencing for many years. Due to increase in the Logistics tracking requirements over the past couple of decades in the U.S and European markets,the usage of geofencing has always been considerably high in transportation and logistics applications in comparison toother applications. Growing R&D investments in new geofencing solutions and technologies using these solutions including driver monitoring and other ADAS systems will boost the market for geofencing in transportation applications in the coming years.

Japan is APAC's largestadopter of Geofencing solutions, and the world's fourth-largest consumer after the U.S. U.K and Germany. Japan has significant adoption in the transportation sector but major share of the growth in recent years has been from media and entertainment. The success of applications such as Pokemon Go have raised awareness of Geofencing usage in Retail and Media applications which has led to significant growth in recent years. Using this information, digital marketers have far more targeting capabilities, especially when geofencing is used in correlation with Demand Side Platforms (DSPs). Digital advertisers have started utilizing these geofencing solutions for targeted ads as well

Geography- Segment Analysis

North America dominated the geofencing market with a share of more than 30%, followed by North America and Europe. The economy of APAC is mainly influenced by the economic dynamics of countries such as China and India, but with growing foreign direct investment for economic development of South East Asia, the current scenario is changing.Countries in South East Asia are witnessing high growth in the aviation and automotive industries According to OICA, APAC automotive sales witnessed a growth of over 6.52% during 2012-2018, with South East Asian countries having huge potential to grow.

Drivers –Geofencing Market

• Rise of Proximity Marketing

Today's consumers increasingly leverage mobile phones as a de facto portal to the world in many cases, make purchasing decisions based on mobile marketing. Marketing strategies that acknowledge and capitalize on this phenomenon will almost certainly outperform marketing strategies that don't. Proximity marketing where users are detected near a location (location based services/location aware services) and coupons for items or product sales etc. are beamed to the user's device. This detection through usage of RFID and GPS solutions will be driven by improving detection technology and increased customer understanding. With increased marketing and understanding customer interests based on historical information, this proximity marketing can be used as a major tool for improving customer reception. Retailers have even started displaying proximity marketing in digital signage where customers can be actively targeted instead of generic advertisements. Adding interactivity to digital signage and implementation of proximity marketing will lead to increased customer reception. Thus, proximity marketing is witnessing significant adoption, especially in the retail sector.

• Implementation of Virtual Perimeter Fencing in Transportation and Logistics Using Geofencing

Transportation and fleet companies globally are focusing on improving management of logistical vehicles and have started using virtual perimeter fencing solutions as an additional security and management measure. In this way it is possible to react immediately if, for example, the vehicle is moved across a national border without authorization. Fines for driving through areas closed to trucks can also be avoided. For valuable or time-critical freight, fleet managers can use geofencing to track the exact route of a vehicle and ensure that it does not deviate from the predefined route. The virtual border is continuously monitored. If the driver deviates from this, the fleet manager can contact him immediately and instruct the appropriate measures. This level of control is appealing to logistics companies in order to ensure proper procedure is followed and to prevent fines and extra fees. This is set to drive geofencing market as it becomes a more defined part of fleet management solutions.

Challenges – Geofencing Market

• GDPR Implementation and Effect on Geofencing

With the implementation of GDPR, the collection of location data and its usage is becoming an increasingly discussed topic. This data is collected in a number of ways, typically via IP address or mobile device ID through public Wi-Fi or willingly entered your or zip codes by the user. This historical location data is then used by websites and companies (retail, banking etc.) to provide location-specific advertisements as well as location-based blocking of information. With location data being considered personal data by GDPR regulations, the large scale collection and usage of location data has become significantly more difficult and could have potential legal implications depending on usage. Thus many companies are switching to either using anonymous data or asking user permissions for collecting data. This has resulted in signficiant changes in business models of players looking to operate in the European Union with some players pulling out altogether. Thus the implementation of GDPR and the potential legal implications have led to challenging circumstances on collection of data requiring significant changes in the collection process. This will negatively impact the EU Geofencing market.

MarketLandscape

Solutionlaunches, acquisitions and partnerships are key strategies adopted by players in the geofencing market. In 2019, the geofencing market is largely diversified led by major players including Esri, Embitel, Bluedot Innovation, LocationSmart, Invisage, DreamOrbit, Apple and Factualamong others.

Acquisitions/Technology Launches

  • In March 2019, McDonald's an $300 million agreement to acquire Dynamic Yield, a startup based in Tel Aviv that provides retailers with algorithmically driven "decision logic" technology. This includes location based analytics and will leverage McDonald's currently inbuilt geofencing solutions to drive customer decision making
  • In April 2019, Salesforce acquired location based intelligence company, MapAnything. This acquisition will enable Salesforce to leverage MapAnything's outing and scheduling engine, integrated GPS tracking capabilities, and location-based workflow layer along with its geofencing trigger applications.

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