Despite an increased concern over protecting personal data, consumers want personalization in order to feel valued. They want a connected and frictionless journey as they move between channels and devices; and they want experiences that enhance their day-to-day lives both online and offline.
Today, location-based marketing allows brands to send personalized messages to their consumers when they are most receptive to them. And in doing so, businesses are delivering unparalleled time- and location-appropriate customer experiences.
What Is Location-Based Marketing?
According to an IAB study in 2016, 46 percent of ad blocker users said they do so because ads are ‘often irrelevant’. Localized ads are, by their very nature, relevant and therefore much less likely to be blocked or ignored. People spending their day in a suburban shopping mall will be looking for different experiences to those relaxing on the beach, and their location should determine what type of ad they are most likely to engage with.
Location-based marketing utilizes a customer’s mobile device geolocation to send notifications (triggered by them entering a predefined geolocation) containing content relevant to their actual location. This location can be as wide as ‘Singapore’ or as specific as a café on Orchard Road in the city.
Imagine you’ve taken a rural vacation for the weekend and you get a push notification about an inner-city clothing store’s 50 percent-off sale. Useless. Ignore. Consider ad blockers. Now imagine you’re walking through that city, only a street away from that store and you get the notification. Useful. Timely. Instantly actionable. You’re already shopping. You’re already nearby. Suddenly, becoming a paying customer is much easier.
Leveraging Location Relevancy
Businesses across the Asia-Pacific region are currently using two types of location-based techniques: Location based marketing and proximity marketing.
Location based marketing is where the location of a customer is determined using their devices’ GPS coordinates. A retailer can, for instance, send automatic notifications to a customer as they arrive in town and track them right up until the moment they enter the mall.
Proximity marketing would then be used to track the shopper’s movements inside the mall, where no GPS signal can be used to determine their precise location.
For this kind of marketing, beacons are most commonly used to define an area of proximity around the store. Push notifications, triggered by them entering (or exiting) this zone, can direct them to the store or send relevant offers.
This technology is already used in high-traffic retail environments with success. Regent Street (a shopping street in London) has its own application which invites users to input their preferences and shows shops on the map that are most likely to interest them as well as ads and special offers by relevant brands as they get near to them.
Starbucks saw a 100 percent increase in the likelihood of users to whom they sent a location-based ad actually walking into a branch after seeing the ad. The brand’s app also uses a customer’s proximity to a store to invite them to place an order before dropping in, saving their customer’s time while enticing them inside with an amazing and personalized customer experience.
Businesses can get really creative with location-based marketing; targeting people in playgrounds or coffee shops that are walking distance away. They can lure customers away from competitors’ stores by having them trigger special offer notifications at theirs. They can make sure the pizza is hot or the online purchase is waiting when the customer comes to collect it or offer discounts on local parking if users visit the store. A sports store could target people at a gym. A camping store could target those attending the caravan exhibition. Some retailers have leveraged insights on the routes customers take to them to guide advertisement positioning.
Getting it right
Working with geolocation brings amazing insights into your customers and you’re able to use this to greatly enhance the shopping experience. But it’s a precarious ground. So, retailers must deploy these technologies carefully.
Businesses need to take their customers’ privacy concerns seriously and utilize opt-in to notifications, as well as allow them to choose which devices they can be contacted on. Once a customer has agreed to be contacted, businesses need to think carefully about the frequency in which they engage the consumer. There is no optimum frequency for contacting customers, other than not bombarding them with messages. Rather, retailers should focus on the quality of their engagement. Messages should be relevant and customer-centric. Businesses need to identify mobile moments that are strengthened in a specific location and go about enhancing those.
Consider partnering with beacon providers and destination applications that already have millions of users so you can tap into a larger audience already comfortable with geolocation features and Bluetooth opt-in. Start with small pilot programs. Experiment, learn, adjust, and repeat.
Painting a Holistic Picture
A study by Integral Ad Science found that 22 percent of marketers specified in-store attribution a major challenge as they struggle to get an online-offline picture of how their marketing has impacted sales.
But geo-fencing, in-store Wi-Fi and RFID technology is starting to help with this. Layering location data with other data can inform cross-channel marketing strategies, competitive intelligence, and supply chain optimization. As additional datasets are added, such as TV viewership and card purchase information, complex tapestries of data can be woven into a 360-degree view of the consumer and their journey.
The next level of mobile engagement
Over recent year’s businesses across the Asia-Pacific region jumped onto mobile advertising to get their messages directly to customers, no matter their location. Today, however, this is simply not enough. Location-based marketing takes mobile targeting and personalization to a whole other level: knowing exactly where a consumer is and sending location-relevant content to grow sales and build brand loyalty.
Wayne Jasek is the Director of APAC Operations for Kentico. He specializes in helping APAC businesses deliver executional online experiences that turn visitors into customers.