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?