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Geo-based marketing on smartphones the new secret weapon for retailers

Retail is currently undergoing structural change; with e-commerce gradually capturing a larger and larger share of consumer’s discretionary spend.

This transition has placed many traditional bricks-and-mortar retail stores under significant pressure, often due to a sharp decline in foot traffic into their venue and price comparison-shopping on shopper smartphones reducing overall conversion rates.

 

The impact is particularly acute for smaller, isolated retail stores, where attracting customers was already a challenging prospect. Large ‘destination’ department stores and shopping malls have fared better, however still can’t predict how much more spend will shift online.

 

However, the same technology, which attracted customers online, is now being used to bring them back. How? Geo-based marketing on smartphones. In simple terms, it allows retailers to target potential customers in a nearby area with clever promotions, driving them in store and spending.

 

Location based marketing’ is nothing new, however technologies and clever incentive programs are successfully encouraging people to share their location in greater numbers than every before.

So what’s changed? Well with the Apple’s iOS 7 release there was a new feature called ‘iBeacon’. This allows alerts to be displayed on the smartphone even when the user does not have an app open. All you need is Bluetooth switched on and the latest version of the relevant beacon or payment app installed.

 

Just imagine walking through a shopping centre and only ‘nearby’ one of your favourite stores. You receive a message saying that the retailer is having a one-day-only sale, so you change tack and go straight there. Once inside, you’re sent a second message offering a further 5% off the shoes you just tried on.

 

That’s more foot traffic and better conversion. Powerful stuff!

 

The other big step forward has been the inclusion of geo targeting on retailer’s apps. Newer versions include permission to receive alerts, and whenever a shopper is within a certain range, a message is sent. Whereas this was a nice-to-have for earlier mobile app versions, it’s now seen as central to any app strategy.

 

And best of all, the geographic data is helping savvy retailers learn more about the shopping habits of their customers, similar to data that online retailers have been gathering for years.

 

Apple has remainder coy about it’s iBeacon strategy, however we suspect this area is only just getting warmed up.

 

 

by Jonathon Tanner
Managing Director | Chargebar Pty Ltd
Follow @jonathontanner

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