Wi-Fi is the fastest and most efficient way to start offering location-based services, per the report, Make Smart Wireless Location Technology Decisions. However, Wi-Fi, GPS, beacons and other wireless signal technology all offer unique benefits and opportunities that marketers should consider when developing a location-based services strategy. 

"Consumers expect curated content and streamlined task flow on mobile devices,? said Julie A. Ask, vice president at Forrester Research and co-author of the report. "They expect their preferred brands to interact with them using relevant offers, content, and services. 

"Businesses can only deliver these experiences with context and, most importantly, location or even the paths that consumers travel,? she said. 

"Furthermore, enhancing customer experience alone is inherently limiting. Ebusiness and channel strategy pros at proactive companies need to address both dimensions of digital business: digital customer experience and digital operational excellence."

Retailers, airports, sports stadiums and other businesses are increasingly leveraging location services to enhance customer engagement and operational performance. 

For example, Neiman Marcus? mobile application alerts store associates when preferred customers arrive in the store while customers can see which associates are on the floor. 

On the operational front, FedEx uses GPS, sensors and navigation software in its delivery vehicles to optimize routes based on weather and traffic. 

Another use for location data is usage-based pricing. For example, Ford?s GoDrive service, which is in trial in London, enables customers to rent Ford cars on a pay-by-mile basis. 

Building a successful location strategy faces several challenges, such as encouraging customers to use the services. Forrester?s research shows that while 78 percent of consumers would use a retailer?s guest Wi-Fi, users often turn off GPS, Bluetooth and other wireless features because they are worried about security and draining their battery. 

For services such as connected lighting to work, customers need to have their phones out and grant access to the phone?s camera. 

Another challenge is figuring out which initiative will offer value to customers. For example, a Las Vegas casino tried to deploy beacons to provide one-foot accuracy to help customers navigate the large facility. However, 90 percent of customers were not interested in this level of accuracy and would have been happy with knowing their location more generally. 

The accuracy of location data is another challenge. Humans, merchandise and displays all interfere with wireless signals. If multiple wireless technologies are being used, they can negatively impact the strength of each. Also, spotty cell service can result in apps disconnecting. 

With more than 100 companies offering location services, finding the right partner can also be a challenge. 

One of the biggest stories in mobile location-based services over the past couple of years has been beacons, which use Bluetooth low energy to broadcast to nearby smartphones to initiate an action and collect data. 

While beacons are a more accurate indoor location alternative to GPS or cellular technologies, they have encountered several challenges, which is why just 3 percent of businesses are using them and another 11 percent are piloting them while 56 percent have no plans to use them and 31 percent plan to test or use them. 

The challenges with beacons include expecting too much of the technology, which works best in small areas with high sampling and strong signals. One retailer reported that a beacon identified customers as being inside the store that were actually outside, even as far as a block away. 

Additionally, because BLE is still an immature technology, resulting in weak signals at times and batteries running out quickly. Also, there are security holes that could make it easy to physically move, spoof or hijack a beacon. 

There are also a number of different options with different capabilities to choose between. IBeacons send the least amount of information and cannot be reprogrammed while programmable UriBeacon adjusts to changes and sends more information. 

Implementation costs can be higher than expected, as operational costs can be high even though the hardware is relatively inexpensive. 

The key to effectively leveraging location-based services is developing a comprehensive location strategy to address several different use cases, per the report. 

One use case is targeting consumers near a location to offer deals or drive foot traffic. GPS is best option for outdoor location based-services and is being used by Walmart and Neiman Marcus for geofencing, per Forrester Research. 

Another use case is getting and providing customer location data and intelligence. Wi-Fi, with appropriate privacy notifications, is enabling Levi Stadium and Wanda Group to track their customers when they connect. 

Location data can also be used to automate identity, authentication and admission. For example, Coachella music festival uses RFID tagged wristbands to admit attendees to different parts of the festival, depending on what was paid for. 

Businesses are also leveraging location to deliver highly interactive and deeply informative content. The Brooklyn Museum in New York uses beacons, in conjunction with its mobile app, to provide information and so that users can ask experts more in-depth questions. 

When developing a location strategy, design the customer experience first, look at Wi-Fi before other technologies and make sure location technology fits into a company?s technology ecosystem.

Keeping in mind that GPS does not work well indoors and Wi-Fi, Bluetooth and other technologies track devices, not people, businesses may need to consider a hybrid approach. 

?Contextual experiences can easily span two or more location-based scenarios and may require multiple wireless technologies,? Ms. Ask said. ?Neiman Marcus? app, for example, depends on GPS and geofencing to alert associates, while Wi-Fi and RFID provide the locations of associates and merchandise."