Sam Ho

SVP, Data Intelligence

March 6, 2015

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Simple Retail Trick to Push Consumers Shop

Leveraging location-based technology to pump up revenue

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The goal of the marketing is always to send the right message to the right people at the right time on the right spot. Location-based marketing or geo-marketing seems trendy now but it is not a new idea at all. Traditional billboard ads at “selected” locations, or “regional local” TV commercials are also applying “location-based” concept in marketing campaign since it is broadcast the message to certain target audience by selected areas.

In the earlier web era, marketer used email or other web site to do promotion electronically but had not much choices on location or target segments. It was just a transformation from printed format to electronic format and was still a blind and massive way to push “unappreciated” message out to consumers.

Location-based marketing helps target consumers more precisely

Sending out the “right” message to target consumer is always the challenges to the marketers. With new technology and mobile device wildly adoption, it is now possible to capture where and when the consumer is, which presents consumer’s lifestyle as well as the product preference or interests. In short, location-based marketing can be more precisely target the potential clients to raise the campaign success rate. There are two main technologies used in location-based marketing currently:

  • Geofencing – It is the application or software that use GPS technology to establish a virtual perimeter or boundary around a physical geographic location, which requires satellites and cell phone towers to communicate with mobile devices. It is used in outdoor and larger areas to identify consumer’s proximal location.
  •  Beacon – It is a device by using bluetooth technology to constantly emitting a signal to the receiver (mobile device) within a very short distance to trigger an application. It is usually used indoor to know more precise location of the consumer.

With those two technologies, marketers can track the consumer no matter they are indoor or outdoor, and hold different marketing activities to consumers based on the locations and time.

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Nowadays Location-based marketing usually involves the four elements:

  1. Smart phone/ tablet device – It is the central media to interact with consumers. Without the device, it is impossible to make the campaign happen.
  2. Proximal location identification technology – As described above, it is to get where the consumer are in real time.
  3. Campaign APPs – All the promotion idea and objective of the campaign are delivered through the APPs, which is the most critical part of the marketing activities.
  4. Consumer’s behavior database/ model – No matter it is real time analysis or pre-set model, marketer needs to know what the consumer is interested or care, so that the appropriate message/ actions can then be brought to consumers.

More and more retailers are using location-based marketing campaign and getting good results from it. It is not just the trend but seems like an essential element to involve location component on all service to bring customer with better experience on shopping.

Below are some interesting and successful location-based marketing cases:

  1. Paul Bakery in Prague, the Czech Republic, 2012: Sending the SMS message to those people within 1-km radius at lunch time for free croissant and coffee. It is the most direct way of using geofencing technology for campaign.
  2.  The Montana Bureau of Tourism, USA, winter of 2013-2014 : Pre-setting targeting consumer and analyzing demographics, sending out the relevant ads to those people who have visited ski-related store or locations in that season. This campaign combined consumer analysis in-advanced.
  3.  American Eagle, USA, 2013: Shopkick roll out 100 AOE stores with iBeacon trial plan. Customers will get message of the specific promotion of the store righter after they walked in the door.
  4.  Macy’s, USA, 2013-2014: in 2013, Macy’s applied iBeacon with opt-in app to track customer in store for promotion, and it seems play a big role for the 2013 black sales. In 2014, Macy’s combined the Apple pay to enhance customer’s shopping experience and convenience in store.