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The Inbound Playbook

How Is Location Based Marketing Changing The Shopping Experience?

11 Oct 2017

It’s not uncommon these days to find a pop up advert on your smart phone reminding you about your favourite Frappuccino - just when you’re in close proximity to a Starbucks outlet. 

How enticing and convenient is that? And the ‘convenience’ and ‘personalisation’ doesn’t stop there… Starbucks is also saving its customers’ time by allowing them to order and pay via their App way ahead before the customers actually step into the store to pick up their fresh brew, without waiting in line! 

This is just one brilliant example of how brands are using Location Based Marketing technologies to enhance and personalise the ‘consumer experience’. And given the fact that more than half of the world now uses smart phones, with the US average at a record high of 77%; and owing to the fact that they spend more than 85% of their ‘smartphone time’ on Apps – It’s a clear indicator that this ‘location based’  marketing trend is growing and becoming more popular! 

As per Global Location Trends Report, 75% of marketers believe that location-based marketing will play a crucial role in their business. Another global survey of 1,700 executives across multiple retail segments, conducted by Research Now and Qualtrics reveals that almost three-quarters (70%) of executives said they plan to use beacons for location-based marketing by 2021

What is Location Based Marketing?

Simply put, Location Based Marketing or Location Based Advertising is a new approach to ‘mobile marketing’ which enables marketers to personalise their messages to users based on their current location, in real time. 

Of course, you need to be carrying your smartphones with you when you leave your house and share your location data; which we often do with the various Apps we use.

One widely used location based technology is called GEOFENCING. When you create ‘geofences’, you are building virtual walls or ‘fences’ using Global Positioning System (GPS), WiFi technologies, or Radio Frequency Identification (RFID), to collect data or define geographical boundaries. 

This enables marketers to alert or ‘trigger’ users as soon as they enter or exit a geographical area. It could be a physical store or any area within a specified radius – where customers can be immediately prompted with automated messages, offers and CTAs of all sorts. And that’s where the beauty of this technology lies – Targeting the customers in real time, and when they’re most likely to ‘convert’, as it’s most convenient for them given their ‘close proximity’ with the product/services; including the added benefit of ‘relevancy’ and the value of ‘time’ saved in grabbing the opportunity with less effort. 

Another approach is through the Beacon Technology. BEACONS are mostly used for indoor locations, allowing a brand to communicate with their customers when they’re in the physical stores – which is essentially small Bluetooth radio transmitters, which attract attention to a specific location. 

The infographic below from Kontakt explains how beacons work:

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Check out some brilliant examples on how brands are using location based marketing to engage and convert their customers: 

1.  Van Leuween – The Icecream Brand

This New York ice-cream store came up with a brilliant idea of providing easy mobile payment options for the customers via PayPal; while it also used geolocation to track the location of the users via the PayPal App. 

As per its campaign, the customers were asked to install the PayPal App in their smart phones and link it to their PayPal Account. Having done that, whenever a customer was near one of their Van Leuween Store, geolocation detected the users and it would trigger special offers and deals onto their phones. 

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The Customers were also allowed to place an order and pay for their choice of ice-creams via the mobile App. 

2.  BLINQ - Connecting People

Blinq, a Swiss startup cleverly used beacons to revolutionise how people connected on dating Apps. Their campaign involved installing beacons at many clubs and bars across Zurich. The App would then use iBeacon technology to alert users if any singles that match their interests were in the same location, at the same time – enabled by their in-app feature called ‘InstaConnect’. 

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This gave a ‘real life’ context in real time to the seekers with their online dating experience. The users had the option to say ‘hi’ or decline saying ‘bye’ to move to the next possible match.

The App also updated the users with their ‘Hotspot’ features; which gave users a list of 5 top clubs and bars which suits them the most, based on real-time trends. 

It used both the location based technology (GPS) and iBeacon technology to facilitate the online date seekers. 

3.  Whole Foods and Thinknear Partnership

Supermarket chain Whole Foods, partnered with the location-based marketing firm Thinknear to improve its conversion rates with mobile adverts, all the while nudging its customers away from potential competitors. 

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The super store partnered with Thinknear to place geofences around a number of Whole Foods store locations and triggered ads and deals to smartphone users who passed by. It also was able to ‘steal’ shoppers near its competing grocery stores by deploying geo-conquesting tools (placing geofences near competitors’ stores) – luring them to travel a few blocks further to find better deals at Whole Foods. 

The campaign was a huge success with Whole Foods yielding a 4.69% post-click conversion rate; which was more than three times the national average of 1.43%. 

Finally…

Location-based marketing strategies are key for marketers looking to leverage real-time data to better target consumers and boost sales through a much personalised shopping experience to the customers of the future! 

If you'd like further assistance or would like to discuss anything covered today, we'd love to hear from you.

Call Andy Fox (me) on (03) 5249 5570 or email andy@element7digital.com.au

Our Website is www.element7digital.com.au

 

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