February 1, 2012, 12:00 AM

The Power of Place

(Page 2 of 2)

Retailers can create geo-targeted offers that go beyond holidays and weather to target consumers with more general types of promotions. WalkingOnACloud.com, a Toronto-based shoe e-retailer that also sells in the United States, uses I.P. location technology from OrderDynamics to craft both free shipping and in-store marketing offers, says Mark Zuckier, the company's president.

Site visitors from the west coast of Canada and the U.S. are likely to see marketing messages emphasizing coast-to-coast fast shipping options, he says; shoppers closer to the company's nearly 40 retail locations in the province of Ontario tend to see content related to the retailer's stores.

Spending matters

As retailers use geo-targeting to promote products based on the weather, or to display local store promotions to site visitors near those bricks-and-mortar locations, they are becoming more sophisticated about the relative importance of geographic location compared with other information that the retailer may know about a customer. That is illustrated by the geo-targeting effort undertaken in recent months by a U.S.-based women's apparel e-retailer that also operates a chain of stores. The retailer's senior e-commerce analyst agreed to talk about the geo-targeting campaign as long as the company remained anonymous; she said the initiative is important enough that it will consume a significant part of her time during the coming year.

The apparel retailer is taking the expected first steps: Its e-commerce site displays a link near the top of its home page to the retail store nearest the site visitor's location—especially important in light of the chain's store-expansion plans. The site also promotes clothes based on weather and season—such as emphasizing warm weather apparel to Northern consumers nearing the end of their long winter hibernations, as determined, again, by I.P. addresses. That data will also help the retailer to promote merchandise specific to the store nearest the online shopper's location.

All of that will require a steady stream of product information flowing into the web servers of the retailer's marketing vendor, and constant testing that geo-targeted offers are producing worthwhile returns.

At the same time, the retailer wants to be sure that geo-targeting does not undermine another personalization program it has in place that tracks a shopper's online browsing and buying behavior with cookies that are placed into the shopper's browser. The personalization based on previous buying behavior will take precedence over making offers based on geography, the retail analyst says.

For instance, the retailer will have to create rules so that a customer located in Minnesota who tends to buy a lot of beach and cruise wear—maybe she is affluent enough to enjoy frequent Caribbean vacations—is shown more offers for that type of apparel instead of the heavy winter clothing that the retailer might present her based solely on her I.P. address. "Where money is spent says more than location," the analyst says. The I.P. address, meanwhile, might prove itself more valuable in tailoring offers to the relatively new site visitor, one without a purchase history or who regularly clears her cookies from her web browser, taking away that valuable data from the retailer.

Unlike in real estate, location is not always critical in retailing. But it's an important piece of customer information often enough to make geo-targeting a useful tool for online retailers in many situations.



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