It should come as no surprise that location-based marketing is gaining traction as it evolves, especially in the retail industry. It’s got the magic formula to deliver the right message at the right time to the right customer — a triple threat if you ask me. But is it all hype?
With more and more shoppers seeking personalized experiences, location-based tactics allow retailers to reach their customers on a more individualized level. Consumers want curated content that is personal and meaningful. They also want to be able to research and explore all options on their own so they know they’re not missing something.
However, can brands push the idea of personalization beyond just nascent tactics like sending emails based on ZIP codes and using beacons to ping consumers whenever they step within a mile of their store?
Very simply, yes.
Here are three tips for retailers wishing to look beyond the hype and build brand loyalists for years to come.
A Smart Use Of Data
Location-based services enable a retailer to engage with a customer both online and in-store, sometimes both in the same moment. Brands that are able to take these insights and behavioral data and use them to predict future behavior will have a better chance of re-engaging users later.
For example, say a customer has a history of buying iced lattes at the café within your retail store on the weekend. However, they’re browsing your app early in the morning and one of your locations happens to be on their route to work. Why not push them a deal for a buy one, get one free morning beverage?
This seems like a great use of re-engaging consumers who may be passively using your app and pushing them to take action and make it inside your store when they otherwise may not. Who knows, maybe they’ll add a scone with their iced coffee and you’ll make an extra buck. Win-win!
It seems as if consumers are more than willing to oblige this trade of information for incentives and rewards. An October 2015 study done by RetailMeNot and conducted by Kelton Global found that 60% of consumers are willing to share their favorite store, and more than half are willing to share information about their gender (56%), age (53%) and interests (52%) with a brand in exchange for a more customized experience. More than four in 10 will share their proximity to shops or their geographic location.
Finding innovative and smart use cases for this information can help brands become more strategic in the way they serve up their marketing to consumers. Think of it this way: By becoming highly targeted, your store could provide fewer discounts overall. This could lead to increased AOV, higher engagement and better ROI by gaining traction with those most likely to buy across your channels.
Weighing The Cost Of Creepy
As smartphones become more sophisticated, so do their ability to read the users’ needs before they even register to the user themselves. However, it should be noted that your consumers want customization — without the creep factor. (Think Spotify or Waze.)
So where do you draw the line?
Retailers and brands have plenty of data on their customers. But how they use that data is the most important factor when it comes to building a smart personalization strategy. This is where the privacy-personalization paradox comes into play more than ever.
One thing that retailers and marketers need to keep in mind is that contextual experiences must outweigh the cost of a consumer’s time and privacy. This exchange of information for convenience is crucial for brands to understand as they head deeper down the personalization path.
Algorithms can take location-based personalization to the next level, but retailers shouldn’t discount the human elements of their campaigns. Ask your users which information they would like to provide, allow them the choice of opting in to communications and don’t bombard them with messaging when it’s not relevant.
After all, there’s nothing more annoying than having your smartphone go off with notifications that mean nothing to you. Anyone else get weather app alerts for their home town when they aren’t even physically in that city? One of the biggest offenders in my book.
Stores like Saks Fifth Avenue offer in-store WiFi connectivity in exchange for the ability to learn about you while you’re online. Sephora uses location-based beacons in its stores to push welcome messaging and reminders about the store’s mini-makeover sessions.
Targeting customers based on their location and preferences can be magical when done right. One of the smartest things brands can do is partner with vendors that will work with their team on the proper content strategy and rollout. While crafting the right message based on various audiences may take more time, it’s likely to provide more payoff.
Choosing The Right Channel
Brands don’t need to be everything to everyone all the time, but they do need to be prepared to meet consumers on the right channel. Location-powered engagement, especially with the use of smartphones, allow brands to be both online and in-store at the same time with the same customer.
Mobile is now both a digital storefront as well as an extension of the physical store. By offering a frictionless cross-channel experience and tapping into where the shopper is accessing your brand, retailers can send tailored content that fits the customer’s current shopping-journey stage.
One good example of data-driven, location-based marketing that I’ve seen to date comes from the travel industry. I consider myself an airport expert given my demanding schedule, and American Airlines' use of beacons to improve the passenger experience is one of the best.
Customers navigating busy airport hubs and passing through various beacon zones are alerted to promotional offers in nearby stores, lounge access, gate information and more.
The brand isn’t trying to overtly sell anything to its customers. They have added value, though — something that is likely to stick with consumers long after they reach their destination. And while this technology is not new for airports, the use of it is. An airline sending me airport security wait times? What a way to eliminate stress.
Location-based tactics can provide huge benefits for the consumer and the brand when done right. Yet according to a new study from WBR Digital and RetailMeNot, location technologies rank near the bottom of the investment priority list for retailers in 2016. Furthermore, Forrester Research’s The State Of Retailing Online 2016: Key Metrics, Business Objectives, And Mobile, February 2016, reports that only 8% of retailers are investing in geo-fencing and beacon technologies for smartphones.
There’s great opportunity for those retailers who begin to integrate their mobile and promotional strategies to align with a more targeted audience by using location technologies to gain insights.
Personalization is a buzzword to many — many who are also failing to execute it properly. It’s a bandage used by marketers who are looking for a solution to their brands’ sales challenges. The ever-elusive unicorn that — if only retailers had more resources, more money and more time — could be the solution to giving their customers exactly what they want, when they want it. Until now.
Customizing brand interactions to fit in with how a particular customer wants to engage with your brand isn’t going to happen overnight. But finding out what makes consumers tick and offering them a variety of content will ensure that they keep coming back. Mobile proximity marketing and personalization is a marathon, not a sprint. Now’s the time to start training.
Marissa Tarleton is the Chief Marketing Officer of RetailMeNot, Inc., in North America. In this role, she directs all consumer brand advertising, customer acquisition and retention, search engine marketing, public relations, internal communications, business-to-business marketing and customer relationship management. Prior to RetailMeNot, Tarleton led marketing for Dell Inc.'s North America Consumer and Small Business organization. Her responsibilities included driving new customer acquisition through marketing communications, media, partner programs, loyalty and CRM for both the Dell direct and retail businesses.