April 28, 2014, 10:41 AM

Unlocking the power of location-based retail services

Many retailers are taking advantage of knowing where a shopper is to offer her coupons and relevant information. Often the trick is to get the shopper to agree to disclose her location.

Today’s consumers expect retailers to be available when and where they need them. According to a recent study by mobile commerce technology provider Usablenet, 30% of U.S shoppers use a mobile phone while in a store to help with shopping. It is no surprise then that mobile channel is all set to be the fastest-growing retail touchpoint among consumers. Merely offering e-commerce features on mobile, however, will not help you drive loyal mobile customers. Today, a personalized shopping experience forms a key part of your customers’ expectations.

This is where location-based marketing comes into the picture. Using it as a part of your mobile strategy allows you to create personalized campaigns that seek to target the right customer, at the right time, in the right place. Moreover it also empowers you with knowledge on the current location of your consumers, when they entered your store, what they did while inside and how long they were there.

How to use location-based services to drive in-store traffic

Here are a few examples of successful location-based marketing techniques applied by retail brands to drive in-store traffic.

1. Offer mobile coupons to increase in-store footfall

Mobile coupons have the potential to lure consumers to walk into your store by appealing to the “deal-shopper” in them. While many see a coupon and just think discount, a recent GfK study revealed that mobile coupon users actually spend 42% more annually than the average shoppers.

For example, Sears and Kmart, a major retailer recently used mobile coupons as a crucial part of their Shop Your Way rewards program for loyalty members. The feature called Shop’In asks customers to check in at a store to browse merchandise, and to unlock personalized deals and offers. As a result, the holiday season of 2013 saw 69% of sales come from members as compared to 58% last year.

2. Use a store locator to drive your customers to the nearest offline store

Though ‘showrooming’ was once a retail industry buzzword thought to spell gloom and doom for bricks-and-mortar retailers, of late more and more consumers are drawn to the opposite of this practice. Dubbed by retail insiders as webrooming, this is where consumers do research on an item online and then purchase it from a physical store.

The store locator feature acts in your favor by driving your customers to your nearest retail outlet. The main attraction here lies in the fact that it lets customers fulfill their immediate needs and also avoid shipping costs. According to a recent comScore study titled ‘UPS Pulse of the Online Shopper’, 44% of U.S consumers said that they prefer to order online and pickup in store.

For example, Wal-Mart Stores Inc., the world’s largest retailer by sales, uses this to its advantage by directing online shoppers to the nearest store using a ‘Find in Store’ button on Wal-Mart’s mobile web site. The feature uses the GPS information from the customer’s phone to determine the nearest store.

3. Let your customers locate items easily with in-store navigation

This feature lets you help customers to locate items while shopping in a store, thus making sure they can find what they want. A recent Cisco study reported that, 71% of shoppers who frequently used mobile to make purchase decisions preferred using a mobile app with in-store navigation feature.

Lowe’s Inc., a U.S. home improvement retail chains, recently added a similar feature to MyLowe’s, the retailer’s loyalty program, to help customers locate items easily by showing the aisle numbers for searched items. It also let customers add products to a wish list and view them on a store-specific map that displays the corresponding aisle number of each item. They can even view an interactive map that lets them zoom in closer on the aisle.

Thus location data plays a very important role in personalizing these marketing campaigns. Today more and more consumers, however, are becoming wary of sharing their location information. According to a recent survey, most U.S. adults list disclosing location as one of their top privacy concerns, ahead of data on their web browsing and search histories.

How to get customers to share their locations

Here are a few tips from the experts at MobStac on how to get your customers to voluntarily share their location information.

1. Entice your customers with mobile coupons they can use immediately

Your customers need a compelling reason to enable location-sharing on their mobile phone and continue to keep it on without having to check in every time. You can do this by offering them contextually relevant mobile coupons that are linked to their location data. A recent RetailMeNot survey states that, 63% of consumers are more likely to buy an item if they receive a mobile coupon while inside a store.

2. Ask your customers to share useful information

One of the best ways to get your customers to voluntarily share their location is to ask them to provide information that will be helpful to other app users.

Waze, a popular driving app, for instance does this by allowing users to post updates about road closures, police speed traps and accidents in addition to providing them with turn-by-turn directions. The app then enhances this location data with contextual information such as time of the day, to provide users with exciting offers from shops, restaurants and other places near their current location.

3. Offer customizable privacy settings

You can reduce privacy concerns by offering customizable privacy settings that lets users control the amount of information shared.

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