Bluetooth beacons and iBeacon, in particular, have received much of the coverage and attention surrounding indoor location. However, there are numerous other indoor location technologies: WiFi, sound, LED lighting, video — and magnetic positioning. The latter is being championed by just one company commercially right now: IndoorAtlas.
Earlier this week, IndoorAtlas announced a $10 million investment from Chinese search engine Baidu. In the press materials, a Baidu representative said the company’s technology “will be instrumental in helping us at Baidu build out our LBS platform for local merchants in China and abroad.”
Some journalists speculated that Baidu’s investment was directed toward better competing with Alibaba. However, it’s a broader play.
IndoorAtlas can help deliver advertising/offers to smartphone users in stores or malls; it can also support indoor navigation and offline analytics. Thus, the capability can help Baidu deliver more visibility on “true ROI” (including offline conversions) as well as create new in-store/indoor marketing platforms and products for the company within China.
IndoorAltas’s use of magnetic positioning was inspired by animal wayfinding in nature. Animals rely upon the Earth’s magnetic fields to locate themselves in relation to their destinations. Smartphones are also able to detect and respond to magnetic field variations inside buildings.
IndoorAtlas can quickly map building interiors and register each structure’s unique magnetic “fingerprint.” This is based on the way building materials affect and “distort” the otherwise persistent magnetic field generated by the Earth. Those patterns can be assigned to a building floor plan to enable precise indoor location detection.
An advantage of using IndoorAtlas is that there’s no hardware requirement, no beacons or WiFi access points to install. However, it’s also compatible with other indoor location technologies, including beacons.
I’ve seen the technology in action and was impressed by its persistent accuracy in the real-world demonstration I witnessed.
While the indoor location market is currently young, it will be worth billions over time. It consists of 1) indoor location infrastructure 2) apps and 3) marketing tools and platforms. These technologies are or should be of interest to all the big internet companies, brands and venue owners (retailers).
At Opus Research, I estimated that indoor analytics + in-store marketing could be worth $10 billion over the next several years. However, there are other numbers to consider: $20 billion to $50 billion is currently spent to influence consumer buying in stores, with in-store merchandising and promotions. And, according to Nielsen, up to $500 billion is spent annually on grocery, personal care and sundries where there’s no pre-determined brand in mind.
Anyway you slice it, indoor location is a huge new digital market.
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