During the “Proximity and Presence Detection in Retail: How to Enrich the Path to Purchase” session, executives from BBDO, Vibes Media and Motorola Solutions spoke about the ways that retailers and brands are using location-based services to connect with consumers and ultimately drive ROI and opt-in rates. The track was sponsored by mobile marketing service platform Vibes Media.

“What’s nice about presence detection and proximity is the fact that you put time, location and the brand in one place, and it all comes together so that you can deliver a valuable experience and create that brand affinity,” said Brittany Clotfelter, vice president of business development and strategic partnerships at Vibes Media, Chicago.

“The [showrooming] numbers are very real in terms of the distraction and friction, especially on high-end items, to make that decision right there, so we’re looking at proximity and presence detection as a way of overcoming the showrooming effect,” she said.

Drive to mobile
With consumers comparison shopping more, showrooming has become a huge challenge for retailers to not only drive consumers in-store but also funnel them through buying on the spot.

According to Ms. Clotfelter there is a 79 percent potential reach of consumers who are interested in receiving a location-based coupon or offer, including incentives, coupons or other pieces of valuable content.

Although geofencing has privacy concerns around it, the Vibes exec said that in some cases the company has seen opt-in rates up to 20 percent as long as consumers know that their location is being tracked.

ROI from location-based offers can similarly be high with anywhere from 230 to 600 percent depending on the time of year. For instance, the 600 percent ROI was during the holiday season when consumers are most likely looking for incentives or rewards for shopping.

Location-based offers also increase foot traffic and basket size.

Although check-ins are fun and entertaining for consumers, the channel does not have as strong of a brand affinity as other platforms.

Amazon’s Price Check app

Brand loyalty
Although consumers are actively using their devices to comparison shop, price is not necessarily the main criteria that retailers should be looking at to set themselves apart with loyalty, according to Laura Davis-Taylor, Atlanta-based senior vice president and managing director for Shopwork at BBDO.

“If we can provide a better experience for shopping in the stores, it mitigates the price pandemonium,” Ms. Davis-Taylor said.

“Think of the brands you love to shop and why is it that you love to shop? Not many are because they have the absolute best price. The ones that create passion are the ones where you have a really fabulous experience, from some perspective,” she said.

In order to make location-based offers relevant, brands and retailers can reach back into their CRM databases to make content curated based on a user’s preferences and past behavior, which can help boost redemption rates.

When consumers are in-store, the ultimate form of advertising that means the most to shoppers is service, per Ms. Davis-Taylor.

Mobile needs to be included as an organic piece of the overall shopping experience.

Connected shoppers
Retailers are looking for a way to close the gap between online and bricks-and-mortar shopping, which leads itself into mobile.

For example, Amazon knows consumers’ preferences, making the site look different for each user. However, in-store merchandising is obviously not targeted towards personalization.

In order to engage with consumers in-store, brands and retailers can use Wi-Fi, which is particularly effective given its reach to almost all mobile phones. With consumers leaving on their Wi-Fi while they are out and about, it gives marketers insight into where shoppers are and what they are doing.

According to Nathan Rowe, senior product manager at Motorola Solutions, Schaumburg, IL, the majority of mobile devices will be Wi-Fi-enabled by 2015.

With Wi-Fi and an opt-in, brands can tie the consumer with the device and interact with them.

Location data lets retailers see exactly which parts of the store consumers are dividing their time in, which has huge implications for not only retailers and grocery stores but also consumer-packaged-goods brands looking to maximize the in-store mobile experience.

“We look at this in two categories – one is what can I do to engage with the consumer and the second is what’s going on in my store, almost from an anonymous stand point,” Mr. Rowe said.

“The consumer wins because they have these targeted ads, and then the retailer wins because they have a higher redemption,” he said.

Final Take
Lauren Johnson is editorial assistant on Mobile Commerce Daily, New York