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Asena Atilla Saunders
Asena Atilla Saunders 5 September 2017

Location Based Marketing – The Future of Shopping Has Moved From Dreams to Reality

We cannot underestimate the power of location based marketing since consumers are now spending more than 85% of their time on their smart phones– some can even survive without water and food longer than being “phoneless”. Having said that, customer location data is becoming more important – as a matter of fact crucial- for every industry; since it is the best way to provide customers tailored campaigns at the right place, at the right time.

We cannot underestimate the power of location based marketing since consumers are now spending more than 85% of their time on their smart phones– some can even survive without water and food longer than being “phoneless”.

Having said that, customer location data is becoming more important – as a matter of fact crucial- for every industry; since it is the best way to provide customers tailored campaigns at the right place, at the right time.

Location-Based Technologies: What are Geofences and Beacons?

You might be familiar with these buzzwords when it comes to location-based marketing. Geofencing and beacon management are the technologies that make location-based marketing possible, enabling marketers to target users’ locations in order to promote a service or a product in a more personalised way.

a. Geolocation and Geofencing

Technically, Geofences are virtual fences that use the global positioning system (GPS), radio frequency identification (RFID) or WiFi technologies to set triggers or collect data and define geographical boundaries.

So, basically geofencing enables you to trigger your customers as soon as they enter or exit a certain geographical area. After building a geofence around a specific location- for example your physical store-, you can set up automatic messages for your customers within that radius. It is also possible to store geocoded data, and query them using geospatial searching methods or to rank data around user location or display content on integrated maps.

Geofences allow you to target your customers in real time – literally when they really need you-, therefore they give you the power of moving your campaigns from annoying to necessary.

b. Beacons

First introduced by Apple (iBeacon), beacons are small Bluetooth radio transmitters, which attract attention to a specific location.

Beacon technology is mostly used in indoor locations and allows brands to communicate with their customers while they shop in their physical store: where else is a better way to catch the customers’ attention? Beacons also allow companies to analyse user preferences, and gain customer insights, which provide a great customer behavior data for brands to create powerful and personalized campaigns. They also help you attract users to your apps, retain those users, and increase engagement on those apps.

What are the Main Use Cases of Geofences and Beacons?

Since location-based technologies enable companies to track customer location and communicate with their customers in real-time, there are so many use cases for businesses depending on the industry and their brand’s consumer base. Let’s take a look at the most common use cases:

The most popular and effective scenario that companies use is: sending related offers to users’ phones when they are nearby or in-store.  The reason is simple: “Your customers are in your store for a reason, this is where you provide exactly what they need from you”.

By using geofences and beacons companies can target users based on their real-time or past location and send messages in such occasions:

  • Inviting nearby customers to the stores and greeting them with a welcome message as customers enter a store
  • Enticing them with targeted offers, promotions or new products while customers walk through the aisles
  • Notifying customers about payment options as they approach the cashier
  • Announcing local events to nearby locations
  • Recommending related attractions on the same radius
  • Bringing mobile users who have recently checked products to the nearest stores
  • Offering customers a special treat and encouraging them to come back while they enter a shopping center or a small store or even a competitors’ venue.

In addition to the most popular uses, there are also other companies who think outside the box with some interesting practices.

One of them is Starbucks who launched a new feature called Mobile Order and Pay. This feature on the Starbucks app uses customers’ proximity to a store, and allows them to order ahead before entering the physical store. By the help of Mobile Order and Pay, they are saving their customers’ time and creating a big loyalty on their brand while improving engagement.

Another unusual approach is from Whole Foods. They placed geofences near their competitors’ stores and used these ‘geo-conquesting’ tools to target customers within those radiuses. They offered better deals than competitor brands, and with this campaign they achieved a 4.69% post-click conversion rate, which is more than 3 times the national average of 1.43%. Quite impressive, isn’t it?

One of Netmera customers, an ‘online food order app’ in Turkey, also uses location data in a more unconventional way. They make use of the time spent in traffic and send push notifications to their customers while they are on their way home. The push messages contain different promotions from the restaurants close to their homes. This campaign enables users to save time to buy their food and also benefit from the discount. Using this interesting approach, the app achieved a higher engagement, gained more loyal customers and built more active users.

Geo-fences and Beacons not only collect store data and track user behaviours (such as purchasing habits, favourite products and payment choices) in real-time, they also provide historical consumer insights about where a customer has been, or what he has been doing at a specific location over a period of time. This way, companies can re-target customers with even more personalised campaigns.

Conclusion

Location-based marketing strategies are already being used in many scenarios and are generating significant results with leveraging real-time data to better target consumers, effectively measuring campaigns and providing the best personalised experience to customers. Since customers will continue to expect tailor-made offers, we will be witnessing more investments in location-based technologies and more innovative use cases.

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