What Is Geofencing? How It Works and What It Can Do

You might encounter geofencing more than you realize: when a food app notifies you as you arrive at a restaurant, or when a package triggers a status update as it nears your doorstep. But beyond consumer convenience, geofencing is becoming a cornerstone of modern enterprise operations. By linking digital logic to real-world movement, geofencing enables automation, alerts, and accountability that static tools like checklists or cameras simply can’t match.

At Leverege, we’ve seen how geofencing transforms operational control. Through solutions like AutoTrace, we’re helping businesses turn passive location data into proactive, real-time intelligence—automating decisions, reducing loss, and optimizing the flow of assets across every lot, yard, or job site.

What is geofencing?

Geofencing, the technology behind location-aware notifications and actions, is changing how businesses interact with the physical world. By setting virtual boundaries around real-world locations, geofencing enables digital systems to automate actions based on the movement of things and people in the real world.

Invented and patented in the 1990s, geofencing began to find business applications in the following decade. In 2001, UK-based mobile marketing firm ZagMe delivered SMS promotions to shoppers entering specific retail zones around London's shopping districts in one of the first major showcases of the tech. With widespread smartphone adoption, geofencing became more precise, affordable, and scalable, finding diverse uses in sectors retail, healthcare and utilities and automotive management with solutions like AutoTrace.

How does geofencing work?

Geofencing uses positioning technologies like GPS, RFID, Wi-Fi, or cellular data to establish virtual boundaries around specific geographic areas. When a tracked device crosses into or out of these zones, it can trigger predefined actions, such as logging an event, sending a notification, or updating a dashboard. This event-based model makes geofencing especially useful for applications where real-time responsiveness matters more than constant location updates.

By focusing on boundary-crossing events, geofencing helps mitigate some of the key limitations of GPS, which often struggles with signal interference, latency, and lack of context when used in isolation, especially indoors or in dense environments. Combined with complementary technologies like BLE, RFID, or Wi-Fi, geofencing becomes part of a flexible location strategy. Platforms like AutoTrace integrate these technologies to maintain visibility across both indoor and outdoor spaces, enabling faster responses, smarter alerts, and operational insights that go beyond simple location tracking.

What are the benefits of geofencing?

Geofencing can enable smarter, faster, more effective decision-making by providing up-to-date information about what’s happening in your real-world facility. It also allows businesses to automate responses to location-based events, improving operational efficiency, enhancing customer experiences, and reducing loss or downtime.

• Real-Time Alerts and Actions: Geofencing empowers systems to send instant alerts or trigger workflows when assets or personnel enter or exit defined areas. For example, a dealership can be notified the moment a vehicle leaves a designated sales lot, helping prevent theft or unauthorized movement.
  
• Enhanced Security and Loss Prevention: With geofencing, organizations can define secure zones and receive automatic alerts about unusual activity. AutoTrace, for instance, leverages geofencing to detect unauthorized vehicle movement in dealerships or construction sites. This can dramatically improve stolen asset recovery and reduce inventory shrink.
  
• Optimized Operations and Labor Efficiency: Staff can be redeployed dynamically based on geofenced triggers (e.g., vehicles arriving for pickup), minimizing delays and enhancing workflow. For industries like automotive retail, this reduces manual inventory time and boosts productivity.
  
• Improved Customer Experience: By knowing exactly when customers or assets arrive or depart, businesses can better manage service readiness, such as staging a test drive vehicle right as a customer pulls in. This kind of responsiveness increases satisfaction and conversion.
  
• Data-Driven Insights and Reporting: Every geofence event is a datapoint. Over time, these interactions reveal trends in movement, dwell time, and bottlenecks. This helps businesses improve planning, layout design, and operational decision-making.
  

How to create geofenced zones in AutoTrace

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Setting up geofenced zones in AutoTrace is designed to be both flexible and intuitive, with no coding required. Users can define zones through a visual interface that overlays geofences on real-world facility maps or satellite imagery. Here’s how it works:

1. Upload or Select a Site Map: Begin by selecting the relevant facility or lot from your AutoTrace dashboard and optionally uploading floor plans to add to your map as an overlay.
   
2. Draw Geofences Using Simple Tools: Use point and click  tools to draw boundaries around areas of interest such as customer parking, service staging zones, high-theft risk areas, delivery drop zones, or test drive lanes.
   
3. Assign Zone Metadata: Name each zone and assign business logic with tags like “High Value Inventory Zone” or “Customer Pickup Area.” You can also layer in business rules tied to time-of-day or asset class.
   
4. Activate Tracking & Alerts: Once defined, AutoTrace will continuously monitor zone entry/exit events in real time. These zones can be modified or paused at any time for operational flexibility.

AutoTrace supports nested and overlapping zones, enabling advanced use cases like tracking transitions between operational areas like maintenance and ready-for-sale.

What can geofenced zones in AutoTrace do?

AutoTrace offers a robust alerting engine that notifies users of movement, exceptions, or inactivity tied to zones and asset behavior. These alerts can be configured to show up in your dashboard, mobile app, email, or as push notifications to operational tools like Slack or SMS.

Here are some common alert types, with example applications:

1. Unauthorized Zone Exit

• Use Case: A vehicle leaves the dealership’s secure inventory lot outside business hours.
  
• Action: Alert sent to security staff; location tracked in real time to aid recovery.
  
• Outcome: Improved theft prevention, 45% increase in recovery of stolen vehicles. 

2. Extended Dwell Time in Zone

• Use Case: A car sits too long in the test drive return area or customer pickup zone.
  
• Action: Trigger a task to retrieve vehicle or notify a manager to escalate.
  
• Outcome: Smoother operations and improved customer throughput.
  

3. Unexpected Movement

• Use Case: Equipment at a construction site moves during non-operational hours.
  
• Action: Alert sent immediately, with movement trail and time stamp.
  
• Outcome: Theft deterred, idle time analyzed, possible insurance benefits.
  

4. Zone Entry by Specific Asset Type

• Use Case: A newly serviced car enters the front lot and should be prepped for customer pickup.
  
• Action: Sales associate gets notified to stage the vehicle.
  
• Outcome: Reduced wait time, better customer satisfaction.
  

6. Prolonged inactivity

• Use Case: A high-demand piece of equipment hasn’t moved in hours.
  
• Action: Alert fleet manager to investigate possible underutilization or outage.
  
• Outcome: Improved asset utilization and productivity.
  

These geofencing and alert features make AutoTrace not just a location tracker, but a real-time operational control tool. Whether you’re a dealership managing lot flow or a construction firm securing expensive gear, the automation and insight enabled by zones and alerts helps reduce costs, prevent loss, and speed up service.

Are you ready to improve efficiency and maximize sales? Book a demo of AutoTrace today!

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