“Most brands and marketers only utilize 15% of technologies and capabilities they are already paying for, so the focus should not be in the number of technologies that need to adopted, but in “applying” them to solve business needs and changing consumer behaviors.” – Mayur Gupta, SVP, Head of Digital Capabilities & OmniChannel Business, Healthgrades

Marketers are trying to leverage real time technologies to reach their customers at the right moment and to push out their competition before they reach them. Location based technologies are the extended sensors for retailers to help process existing and potential customers based on geographic location and to keep them engaged with the brand.

For instance, worldwide lifestyle magazine Elle used a combination of Bluetooth and beacons for their 30th anniversary celebrations to drive 500,000 footfalls to their store. They reached out to the users of ShopAdvisor and RetailMeNot apps and gave them special offers on the editors’ picks. They leveraged geo fencing for ShopAdvisor and let the customers know when they were around a shop selling the products. While in the shop RetailMeNot, a coupon app would show promotions on other products through beacons.

Location based marketing

Location based marketing is based on the geographic location of the consumer, depending upon the GPS location and the longitude and latitude. Depending upon technology this is not always accurate when used indoors. For a retail giant like Starbucks, it makes more sense to invest in location based marketing than proximity marketing. More reach.

Proximity based marketing

This is more in store based tracking. Proximity based marketing is more accurate than location based marketing. Though it has a small reach (only within store) it helps in up sell and cross sell. Using trackers like beacons retailers can determine the amount of time each customer is spending on each aisle, track footfall and arrange products accordingly. Clothing retailers or supermarkets can derive more benefits from proximity based marketing.

Location based marketing Vs. Proximity based marketing

Location based marketing Vs. Proximity based marketing

 

Technologies

Retailers have been using one or combination of location based technologies to get the right results in the customer focused market.

 

RFID

RFID

RFID tags or Radio frequency identification tags have become common with retailers and customers alike. These help in tracking in store product movement and inventory. These tags have replaced the barcode system and are used as chips on products. RFID tags need special readers for the chips to be identified. They are not mobile friendly and thus don’t work for location based marketing. While inside store it is almost 100% accurate and can generate up to 1000 tags per person. RFID tags are mostly helpful in preventing internal thefts and shoplifting.

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The first Amazon Go store enabled customers to grab items off the shelves and simply leave. This was made possible with the help of RFID tags which collected the purchase information and sent a virtual bill to the customer’s Amazon account.

 

Beacons

Beacons Technology in retail

Beacons are battery operated, small Bluetooth friendly devices. They track compatible devices (smart phones) in close proximity (accurate within 50 meters). To function, these devices need native apps. Beacons are mostly used for close range marketing as their location accuracy depends heavily on the customers’ mobile network accuracy. Renowned smart phone makers are coming up with beacon friendly browsers to make it easier for the retailers. For instance, Apple has come up with iBeacons based on Bluetooth low energy proximity sensing.  Google has released Eddystone format beacons which supports chrome browser. Similarly Samsung has come up with Samsung Close By browser which allows beacons to identify these devices nearby.

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Geo fencing

GEO fencing in retail

Geo fencing is a relatively new and fast growing development in the location based marketing sector. Geo fencing is done by tracking cellular data and Wi-Fi with the help of satellites to send push notifications to customers who opt for it.

With the help of this technology, retailers can put virtual markers on areas which help them to identify customers when they walk in or out of that zone. This provides the retailers rich opportunities to reach out to customers with interesting offers and make the most of proximity marketing.

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Comparisons

 

Comparision of RFID, GEO fencing and beacons

 

Scenario ahead

“Technology must become an extension of how marketers work on a daily basis.” Dale Zwizinski, KiteDesk.

While retailers have gotten quite used to RFID tags and are leaning towards beacons for the next level of location based marketing, geo fencing is gaining popularity quite fast with apps and retailers like Uber and Starbucks.

Having an understanding of the business and the industry is extremely important when it comes to strategizing for marketing technologies. Choosing the right strategic partner eases out the process effectively. With vast knowledge of the retail industry and in depth technical expertise, Aspire offers a complete, successful implementation of balanced technical strategy fit for your business. From strategizing to implementation, we take care of each step to arrive at the coveted destination of increased customer centricity followed by better revenue.

The future would be ruled by retailers who can effectively strategize using location based marketing and proximity marketing to reach out to customers with a fine blend of all the technology choices available.

Shreyasee Ghosh

Shreyasee Ghosh

Research Analyst at Aspire Systems
Shreyasee Ghosh is responsible for handling various kinds of marketing content including whitepapers. She has a 1st class 1st Graduation degree in Mass Comm & Journalism. In a career spanning over four years she has worked at a renowned media organization and other IT companies.
Shreyasee Ghosh