Marketing evangelists used to warn of brick-and-mortar stores' extinction, spreading fear of a retail apocalypse. The numbers show a different story, however. While e-commerce sites are growing faster than physical stores, the latter's performance is not precisely pitiful.
Brick-and-mortar stores are thriving, with revenues inching up by 4% each year since 2010, says data from the National Retail Federation. Another good indication is the fact that online retailers are opening their own physical stores. In a survey of 100 digital-native brands, JLL Research found that several are set to establish around 850 stores in the next five years.
Geolocation Marketing in the Retail Industry
Among the digital technologies that play an increasing role in sustainable customer acquisition are geolocation platforms. Geolocation marketing refers to a brand's use of historical and real-time location data to connect with ideal customers and extend customized in-store experiences to them. Below are three common geolocation marketing strategies used today.
Geotargeting
Marketers employ geo-targeting to create relevant ads, location-specific websites, and other promotional content for customers using IP geolocation information. Marketing professionals use IP geolocation data like IP addresses to determine a target demographic and consumer intent accurately. Popular social media apps like Facebook, Twitter, and Pinterest, along with Google Adwords, are also commonly used platforms for geo-targeted campaigns.
Beacons
Beacon marketing uses Bluetooth Low Energy (BLE) transmitters and receivers called "beacons." These devices watch out for Bluetooth signals given off by nearby mobile devices to trigger the sending of marketing messages. These messages include limited or store-only offers, exclusive articles and videos, and in-store navigation instructions. However, consumers are requested beforehand to opt-in to receive alerts successfully. Also, the geographic range of beacons is usually limited to a ten-meter radius.
Geofencing
Geofencing is a type of geolocation tactic wherein virtual perimeters are built around a particular store location, neighborhood, or a competitor's premises. Geofences are set up using positioning applications or mapping services that include cellular data, Wi-Fi signals, and Global Positioning System (GPS) technology. These technologies prompt the delivery of text messages, in-app alerts, and ads based on predefined events.
Geolocation Marketing Success Stories
A BIA Advisory Services report reveals that advertising spending on location-targeted ads is expected to grow from US$26.5 billion this year to US$31.1 billion by 2020. That's undoubtedly a considerable amount for most companies, but it's a risk they're willing to take because of the potential high rewards. Here are some brand success stories linked to using geolocation marketing tools:
Geotargeting: Purple Mattress used geo-targeted ads to appeal to users in warm climates with its Sleep Cool campaign in 2016. Social media users from Phoenix, Arizona, were among those targeted. According to Bryant Garvin, the company's digital advertising director, the campaign resulted in more than a 500% return on advertising spending (RoAS) from offline sales.
Beacons: Luxury department store Neiman Marcus was one of the first retail chains to use beacons in its Texas and California stores. The high-end retail chain used beacon alerts to direct shoppers to ongoing events in its stores.
Geofencing: Geofences can be used to steal a rival's customers with a technique called "geo-conquesting." Some of you may know that Burger King is a viral marketing pioneer with a string of memorable campaigns under its belt. Last year, the company trolled McDonald's with its Whopper Detour campaign, which used a 600-feet-wide geofence around the latter's branches. Burger King encouraged customers to head over to McDonald's to unlock a one-cent Whopper discount. As a result, more than 1 million users downloaded Burger King's app.
A Rosy Outlook
The current retail atmosphere is indeed a favorable time for entrepreneurs to launch their own businesses. One way to take advantage of this living environment is by exploring omnichannel opportunities with the help of IP geolocation technologies. Geolocation tools provide entrepreneurs a great way to drive foot traffic to their stores and keep them engaged.
About the Author
Jonathan Zhang is the founder and CEO of Threat Intelligence Platform (TIP)-a data, tool, and API provider that specializes in automated threat detection, security analysis, and threat intelligence solutions for Fortune 1000 and cybersecurity companies. TIP is part of the WhoisXML API family, a trusted intelligence vendor by over 50,000 clients.
