Location-based technology is becoming a must-have for retailers. The technology is an incremental part in marketers’ strategies and a good investment in bring in-store traffic and delivering contextually relevant content.

“If a customer has been in proximity to a retail location and, as such, personalized mobile offers or coupons can be delivered at a time and place most-likely to generate a purchase,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce, Boston.

“While the check-in was a fad for a while, the promise of using mobile geolocation to personalize the shopping experience has not delivered as promised,” he said. “GPS does not always work well in urban environments and consumers do not necessarily like being reminded that their phone knows where they are.”

Vast appeal
Geolocation is used by a variety of marketers such as Kiehl’s, Best Buy and Ace Hardware.

Gradually, many more are harnessing the power of the technology to reach consumers on a device that is personal to them – their smartphone.

By leveraging location, marketers are able to segment consumers and offer them relevant and personalized content.

“Allowing consumers to opt-in is very important, as is explaining the benefits – savings or deals – they will receive from sharing the fact that they were there with the retailer,” Mr. Kerr said. “If there is obvious upside, consumers usually do not mind.

“But if the upside is that the retailer will know more about the real-world behavior of the consumer, this tends to turn people off,” he said. “Geolocation is becoming a standard element of the mobile experience, as the wow factor fades.

“Smart retailers will use location awareness to gather data and then apply this data to deliver custom experiences to their customers that utilize mobile commerce and merge the in-store and online experience.”

Where it is heading
According to Alistair Goodman, CEO of Placecast, San Francisco, accurate geo-targeting has always been one of the most powerful tools for marketers in making their messages relevant to consumers because it points the marketer to an interested consumer, and the consumer to where they can take action.

When combined with other data like explicit preferences, click data or past purchase behavior, the end result is something a consumer will perceive as really valuable.

For example, if it is lunchtime and a consumer has said they are interested in casual dining offers, geo-targeting on mobile can point them to a nearby restaurant with a promotion.

Good marketers know that great geo-targeting drives better performance in any medium – from a billboard pointing you to a nearby store to a geofence that triggers a tailored offer on a mobile device, per Mr. Goodman.

“The most important benefit of geo-targeting for the retailer is being able locate an interested customer nearby, in real-time, with the ability to direct them to where they can make a purchase; this can be a key driver of foot traffic for brick and mortar stores,” Mr. Goodman said.

“Using location, an incentive and a relevant promotion can be combined into a highly targeted ad that can be a great motivator for a consumer to go make a purchase,” he said. “For example, Starbucks can incorporate a weather feed to their mobile strategy, and dynamically shift a promotion from a hot drink to a cold drink as the temperature rises in a particular location.

“In this case, geo-targeting becomes the key piece of message relevancy for the consumer.”

The advent of smartphones however has given marketers a tool for highly granular geo-targeting. Today, marketers can tailor advertising to a user a few blocks from their store.

When it comes to geo-targeting, it is important that marketers find their location relevance – and retail locations are just one piece of the location puzzle.

Companies should also make messaging more relevant by using data for better targeting.

Demographic, psychographics and past purchase behavior, for example, can be combined with dynamic real-time data such as weather and traffic conditions to create highly customized and relevant messages

Additionally, it is important that marketers give consumers choice, and enrich their targeting capabilities through a preference center, as well as communicate the value and make sure consumers know what to expect from the program.

“Geo-intelligence is heading into the OS-layer and becoming a part of every experience on the phone,” Mr. Goodman said.

“Not only will marketers use geo-targeting by default in every mobile campaign or loyalty experience, but both marketers and publishers will increasingly tailor all content on mobile in real-time to incorporate geo-data,” he said.

Final Take
Rimma Kats is associate editor on Mobile Commerce Daily, New York