How 316 Million Smartphones Are Reshaping Market Intelligence
The Growing Alternative Data Market
A hedge fund analyst recently demonstrated something fascinating to a reporter: a heat map of foot traffic at every Target store in America, updated hourly. The fund could identify which stores had 20% more traffic than the previous Tuesday, which parking lots were filling up faster than normal, and predict next quarter's earnings with notable accuracy.
"We've been doing this since 2011," the analyst explained, scrolling through satellite images. "Started with parking lots. Now we track much more."
According to Statista, in 2024, an estimated 316 million Americans are using smartphones. What's interesting is that each one generates location data, creating what the industry calls "breadcrumbs" of information. AlphaMap, for example, analyzes data from over 130 million smartphones to estimate foot traffic trends and rankings. Weather apps, map searches, social media check-ins – they all contribute data points to a sophisticated location intelligence ecosystem that's completely legal and increasingly important for business strategy.
The Growing Alternative Data Market
The global alternative data market was valued at $6.27 billion in 2023 and is projected to reach $79.22 billion by 2029, growing at a CAGR of 52.61%, according to market research from Arizton. Some projections suggest continued growth through 2034. This represents a significant and rapidly expanding segment of the data economy.
There's a notable difference in how financial services and marketing departments approach this data. Neudata's 2024 survey found data buyers are subscribing to an average of 20 datasets annually, with total spending averaging $1.6 million per year. Larger firms average 43 datasets. In contrast, many marketing departments are still evaluating their analytics infrastructure.
The sophistication has evolved dramatically. RS Metrics started counting cars in Walmart parking lots back in 2011. Today, companies are tracking shadows cast by oil storage tanks to gauge global energy consumption, monitoring the brightness of industrial facilities at night to estimate production levels, and watching shipping containers move through ports in real-time. One company in China was recently caught misrepresenting production because satellite imagery showed their facilities running at reduced capacity based on nighttime illumination.
But here's what really matters: the integration of iPhone location data with everything else. Retail foot traffic growing 0.4% year-over-year in 2024 might sound modest until you realize that hedge funds knew this before the retailers did. They're tracking 1.5+ billion monthly visitors across 20 million devices, seeing not just where people shop but how long they stay, where they came from, and where they go next.
How Location Data Actually Works
Here's the basic process: A customer enters a store. Their phone connects to cell towers and WiFi networks. Apps with location permissions – weather, news, maps – log these data points. This information gets anonymized and aggregated with millions of other users, then becomes available through companies like Placer.ai or Gravy Analytics.
This means analysts can understand:
Store traffic patterns compared to previous periods
Percentage of first-time versus returning visitors
Geographic origin of customers (by zip code)
Average time spent in location
Cross-shopping patterns within the area
The ICSC's "halo effect" report shows that opening new stores drives a 6.9% boost in online sales while closing stores reduces online sales by 11.5%. Investment firms identified these correlations early by analyzing foot traffic patterns alongside e-commerce data.
Edison Trends analyzes e-commerce receipts from millions of U.S. consumers – seeing purchase patterns across major platforms. Their AI algorithms process this data to generate item-level transaction insights from thousands of merchants. Combined with foot traffic data, this creates a comprehensive view of consumer behavior and market share shifts.
The Marketing Opportunity in Alternative Data
Marketing departments have an interesting opportunity here. While investment firms have been using this data for years, many marketers haven't explored its potential.
Consider this: A retail chain spending substantial budget on traditional market research could access real-time foot traffic data for a fraction of that cost – covering their own stores and competitors'. This isn't survey data about shopping intentions, but actual behavioral patterns. As analysts note, foot traffic data is behavioral – it shows actions rather than opinions.
Understanding peak traffic hours allows for better staffing and inventory decisions. Most retailers still use historical schedules. But real-time foot traffic data reveals pattern changes immediately – like Tuesday afternoons becoming busier due to competitive changes. Traditional analytics might not catch these shifts for months.
"Cross visitation" analysis shows where customers go before and after visiting your location. A Boston coffee shop discovered their primary demographics were females aged 20-24 and males aged 15-19 – different from their assumptions. They also identified that customers typically visited three other stores in the same trip, revealing partnership opportunities.
Understanding the Privacy Landscape
The regulatory environment is evolving. Vermont, California, Oregon, and Texas have implemented data broker registration laws. The California Delete Act aims to give consumers more control over their data. The FTC has taken enforcement actions against companies like Outlogic (formerly X-Mode Social) and Avast for certain data practices. PADFA restricts data broker sales to specific foreign entities.
These regulations reflect growing privacy concerns. Apps collect location data and, after anonymization, make it available for various business purposes. However, researchers have demonstrated that truly anonymous location data is challenging to achieve – individuals can potentially be identified from limited location points.
This creates an interesting dynamic: the data exists, it's being used by various industries, and regulations are trying to catch up. For marketers, understanding this landscape is crucial for making informed decisions about data usage.
Practical Applications for Modern Marketing
Based on extensive industry research, here are practical applications for location intelligence:
Traditional market research has its place, but behavioral data offers different insights. Real-time foot traffic data provides immediate feedback on market changes. When competitors launch promotions or adjust strategies, the traffic impact is visible within days, not quarters. Many retailers already have security cameras that could be enhanced with video analytics platforms for better visitor insights.
Cross-visitation data reveals customer journey patterns. Understanding where customers come from and where they go next informs everything from site selection to partnership strategies. It's not just about counting visitors – it's about understanding behavior patterns.
The most sophisticated approach layers multiple data sources: foot traffic, weather patterns, local events, and competitive activity. This combination enables predictive capabilities that weren't possible even five years ago. The technology and data are available – the question is how organizations choose to implement them.
Looking Forward: The Evolution of Consumer Intelligence
McKinsey reports that Gen Z will contribute significantly to the global economy by 2029. This generation has grown up with smartphones as a constant companion. Understanding their behavior through ethical data practices will be important for retail success.
Investment firms have demonstrated that alternative data can predict business performance effectively. While they focus on trading advantages, marketers could use similar intelligence to create value through better store locations, optimized operations, relevant partnerships, and improved customer experiences.
The location intelligence ecosystem has been developing for over a decade. It's now mature enough that marketers need to understand its implications. Whether as users of this data or simply being aware of how consumer behavior is being tracked and analyzed, knowledge of these systems is becoming essential for strategic decision-making.
The 316 million smartphones in America generate vast amounts of location data daily. Understanding what this means for your business – both as an opportunity and a consideration for customer privacy – is increasingly important for marketing strategy.