Beacons, geo-fences and geo-location are some of the latest fascinations for digital marketers within the retail industry and are linked to location-based marketing.
Simply defined, location-based marketing is when an organisation receives real-time data from a consumer through their GPS, WiFi, Bluetooth or RFID technology.
Geo-location technology is opening doors for retail (literally!) providing richer data insights and more opportunity to improve customer engagement. Geo-fences and beacons register when a consumer is in the vicinity of a brick and mortar store, triggering the display of local advertisements, offering inducement and optimising consumer experience within a store.
Are they effective? Yes! Whole Foods employed geo-fences to display local adverts to nearby consumers which created a post-click conversion three times higher than the national average.
There are mutual benefits for consumers and retail organisations-
- Eliminates irrelevant advertisements.
- Converts impulses into sales.
- Rewards loyalty and attracts new consumers through offering incentives when “checking in” on social media and to drive foot traffic.
- Provides consumers with convenience and speed.
- Offers a personalised experience.
Yet, there is one element that could undermine the success of location- based marketing, that is, “the creep factor”. Consumers are fearful of privacy invasion or potential bombardment. Consequently, Skyhook Wireless revealed at one point 40% of smartphones users GPS setting was inactive.
How can this be resolved?
- Provide consumers with control- Allow them to give consent, potentially an ‘opt-in’ option or enable them to customise the type of content they receive.
- Eliminate apprehension- Educate your consumers about functionality and how they will reap rewards.
=Ultimately, establish trust.
Would you be willing to provide a brand with your geo-location, if not, why? As a consumer have you experienced location-based marketing from an organisation, was it effective?
Let’s discuss!
Digital Marketing Buzz 
Interesting points! I’ll admit I’m one of those 40% who keep their location turned off 24/7 (apart from when I need to do some quick google mapping, even then sometimes I prefer to find my location myself!). However, if there were a business that I trusted enough, I could be open to geo-location marketing (incentive-wise, at least). The location based advertisement does not appeal to me much.
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Hi Maggie! It is lovely to receive a comment from you. Yes, you’re not alone, there is definitely something unnerving about businesses knowing our precise location and buying habits. I think if retail companies were able to effectively illustrate the benefits for consumers, there would be an increase in confidence to share our information. Oh fascinating, why does location-based advertising not appeal to you, is it that it would be too creepy? I’d love to hear your thoughts. Thanks Maggie!
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