December 26, 2019

Geofencing: The New Strategic Perimeter

Written by Garret Weigel | Supply Chain

Geofencing isn't exactly new, but it is an important technological concept that's being utilized not only in the transportation sector, but in many other industries as well. It has many capabilities and allows an enterprise to utilize geolocation for better control and management of the supply chain.


What is a Geofence?

So, what exactly is geofencing? A geofence is just as it sounds: a virtual perimeter that's used in a physical geographic area. It can be dynamically generated to create a radius around a certain point location with a predefined set of boundaries. Examples include a school zone, a neighborhood boundary, or a transportation territory within a marine terminal or freight yard.


A geofence uses a location-aware device to provide a specific service, contingent upon location, that monitors users as they enter or exit its domain. When a party enters or exits this perimeter, the activity can trigger an alert or message to a designated person. This notification could contain the location of the device and ultimately be sent to a mobile telephone, an email account, or another device.


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GPS and RFID Enabled Software

Geofencing uses GPS or RFID-enabled software; this mapping technology models a geofence that triggers the responses. With geofencing, you're able to have visibility and control within that boundary and use the information of egress and access in any way desired.



People are widely familiar with GPS and the concept of location-based services.


While the idea has been used in various industries, the technology is certainly becoming more popular. The geofencing market is expected to grow to approximately $1.825 billion by the year 2020. The market size will grow from about $542 million in 2017 to nearly thrice that in just a few years, at a compounded annual growth rate of about 28 percent.


Geofencing Applications

What are some of the practical applications of geofencing? For retail, it can send promotional messages to local shoppers and stimulate consumer spending by encouraging visits to a specific store. It might be used in the automotive industry to retarget users that have visited another dealership and seek ways to prompt them to visit a competing one within a designated geofence. Airlines can use geofencing to sell customers different services as soon as they enter the premises of an airport. Hospitality industry marketers might use geofencing to seek out feedback once the user leaves the space. Small businesses of all types can use geofencing to offer discounts to a returning customer to build loyalty.


The applications of geofencing are many. Its strength is in relating data to location. Then it uses this data to provide information. Location-based information is then often combined with even more technologies such as mapping software and graphical interfaces. In turn, this may give rise to dashboards that allow others to see, from a remote location, information on a map, or about a specific location. The aggregation of data, in this format, is something that just was not available in the recent past.


gps location data

As GPS has advanced, location-based information has driven strategies for new services.


For example, an app that provides consumers with hotel information turns on rate data later in the day and messages them when they are in proximity of discounted hotel rates. Waze, a well-known app that provides directions and maps for travelers has partnered with major fueling retailers to show consumers where they are as they travel. Sephora, the retailer, uses geofencing to “talk” to customers as they enter a store. And Burger King used it to actually lure McDonalds customers away from their dining experience, by trolling users who are within 600 feet of a McDonalds and then offering them a promotional deal at a nearby Burger King.


While geofencing is already widely applied, its uses are so varied and can be combined with immersion technologies of all types to provide a rich method of monitoring people and things, particularly in the transportation industry. Nevertheless, geofencing technology is still in the early adoption stages. In the future, we expect greater applications and uses.


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