Location-based Services Market Trends

Growth Drivers

• LBS adoption in smart mobility: One of the most significant growth drivers is the expansion of connected mobility and the deployment of autonomous vehicles. For example, HERE Technologies teamed with BMW in January 2025 to deliver real-time hazard warnings and predictive route planning for European drivers based on high-definition LBS data. This deal suggests that the automotive industry relies upon accurate, up-to-the-second location data for safety, efficiency, and customer satisfaction. As smart transportation networks rise, there will be robust demand for dependable LBS platforms.
• Retailers shift towards LBS for personalized, location-based promotions: Another key factor fueling the market growth is the adoption of LBS by the retail sector for hyperlocal promotion and personalization of customers. Several retailers are implementing geofencing and proximity analytics to deliver targeted promotions and make curbside pickup easier. Shift towards omnichannel strategies and real-time engagement is fueling investment in LBS via global retail ecosystems.

Challenges

• Regulatory changes threaten data gathering in LBS apps: One of the key challenges is the strengthening of data privacy regulations, making it more difficult to gather and use location data. In February 2024, the EU Digital Services Act introduced new consent requirements to LBS apps, with express user permission and transparent data processing. This increased compliance costs for developers and lowered the data granularity accessible. Companies now have to balance innovation with evolving regulatory rules in order to maintain user confidence and market access.
• Lack of indoor standards increases LBS integration costs: Another market barrier is the indoor positioning standards, which do not allow for seamless LBS deployment in locations. Ambiguity results in slower adoption and enhanced implementation barriers, especially in complex ecosystems like healthcare and transportation.