Micro-location is the process of pinpointing a person's placement to within a few inches or feet using various technologies. While GPS can only determine geo-location while outdoors, micro-location technology can determine location more precisely, both indoors and out. Micro-location is being used by many different industries in various ways, but the most prominent implementation is for proximity marketing, which delivers promotional material to consumers based on their location.

Underlying technologies

Micro-location depends on the collaboration of various technologies to perform its location tracking. The technologies include:

  • near field communications (NFC)
  • Bluetooth
  • beacons
  • virtual beacons


Beacons are small transmitters that run on battery power and use Bluetooth low energy (BLE). Virtual beacons perform the same activities as regular beacons, but use Wi-Fi instead of BLE. Beacons are low in cost, maintenance and profile and have the ability to micro-locate from a few inches to around 150 feet. The data beacons produce includes latitude and longitude, app specific data -- such as user ID, preferences and demographics -- and a visible beacon array that shows surrounding beacons' universal unique identifier (UUID) and signal strength.

Beacons interact with a smartphone's Bluetooth technology and alert apps on the device when the phone enters their related location, prompting the apps to send push notifications. This is advantageous for companies who use mobile location analytics (MLA) to track and target customers and deliver applicable ads, offers and messages instantly.

The PayPal Beacon is a USB device that allows retailers to connect their compatible point-of-sale (PoS) terminals and use them to carry out hands-free payments with any customer who has the PayPal app downloaded on their phone. The beacon recognizes when a customer has the app and displays the customer's picture on the POS screen to verify their identity. Verbal consent is the only thing required for the purchase. Customers are able to control the PayPal Beacon and customize which retailers can process orders.

Similarly, the iBeacon is designed by Apple to support mobile payments by connecting to the iTunes account. However, unlike the PayPal Beacon, the iBeacon is aware of location. This gives companies the capability to detect any device running iOS and locate where it is in the store more accurately than using Wi-Fi or GPS.

Estimote is a third party beacon that can attach to any flat surface and communicate with smartphone apps as close as 4 inches and as far as 30 feet away.

While beacons hold many advantages over GPS -- low cost and ability to use indoors -- they do not completely replace it. The most successful micro-location technology utilizes both beacons and GPS.

Use cases

Micro-location fuels proximity marketing. Companies have the ability to be virtually present with consumers while they are in their venue, providing physical businesses with the same advantageous consumer tracking data -- like insights into specific customer shopping habits -- that is available to online companies. Micro-location allows businesses to send offers, information or personal messages that can help the customer save time and money and possibly make a better, more informed decision. Micro-location also allows companies to pull customers into their business. If a restaurant is having a slow night, they can reach out to consumers walking by with discount offers for dinner, creating business and filling their dining room.

However, micro-location isn't only used for marketing. The ability to track indoor location can be used to map a warehouse and direct automatic guided vehicles or human employees to whatever they are looking for in the building.

Micro-location can also be used in hotels to create better experiences for guests. If a guest has the hotel's app, they can be granted keyless entry and skip the physical check-in process. Hilton hotels have implemented this practice with their Hilton HHonors app. Guests complete an online check-in process, register their phone and then receive an encrypted file with their room number.

Circumstantial notifications can be sent to guests or hotel employees using micro-location. If a guest is in their room around meal times, they can receive suggestions for restaurants through the hotel's app or via text message. Or, notifications can be sent to housekeeping when a guest is in their room so the employees know not to disturb them.

Guests can also use their phones as remote controls using micro-location. This could allow them to control things such as the room's TV, thermostat and lighting. Once a guest is in their room, their presence is picked up by devices that are searching for other connected devices over BLE. This sends a message to the guest's app and enables them to control various settings through their phone.

Many people worry that micro-location is intrusive and obstructs their privacy. However, the beacons used in micro-location technology can only connect to a person's phone if they have the relevant app downloaded and Bluetooth enabled. This gives people the ability to monitor and control who can detect their phone and when they can detect it.


This was last updated in June 2019

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