“If your plans don’t include mobile, your plans are not finished.” – Wendy Clark, former SVP at Coca-Cola.
Geolocation marketing has transformed how businesses connect with customers. When retail marketers leverage the power of location data, companies can tailor their advertising efforts to reach customers in specific geographic areas, delivering messages that are relevant and timely.
This level of personalization and relevancy can result in higher engagement and sales conversion rates, making geolocation marketing a must for small-to-medium-sized (SMB) retailers. This article discusses the power of geolocation marketing and location-based strategies that transform potential footfall into sales.
What is Geolocation Marketing?
Geolocation marketing is an advertising strategy that utilizes precise location data to deliver targeted content or ads to consumers based on their real-time geographic location and behavior.
It allows businesses to reach their audience with personalized, location-specific messaging, increasing the relevance and impact of marketing campaigns.
How Does Location-based Marketing Work?
Geolocation marketing uses location data from customers’ devices to deliver highly targeted advertising content based on their physical location.
This technology enables businesses to send personalized messages, offers, and promotions to potential customers when they are near their stores or in specific geographic areas.
Retailers can leverage this data to create a sense of urgency among consumers. This technique encourages shoppers to take immediate action, improving customer engagement.
Location-based marketing is about reaching the right people in the right place at the right time to boost sales and improve customer experience.
How Does Geolocation Marketing Benefit Retailers?
Geolocation marketing benefits retailers by increasing their ability to reach and convert potential customers. Consider the following:
Precise Ad Targeting
Retailers can reach potential customers who are physically near their stores, increasing the chances of driving foot traffic.
Message Personalization
They can deliver personalized offers and content based on a customer’s location, making the shopping experience more relevant.
Cost Efficiency
Location-based marketing reduces ad spending wastage by focusing on specific geographic areas and optimizing marketing budgets.
Competitive Advantage
Retailers can target customers near competitors, enticing them with better offers or incentives.
Enhanced Customer Insights
Location data helps retailers understand customer behavior, allowing for better-tailored campaigns and improved customer relationships.
In sum, geotarget marketing allows retailers to attract local customers, personalize ads, and maximize marketing ROI.
“Marketers today are expected to be data-driven experts, and location data is able to help them through every step of the process, from understanding their audiences and engaging customers, to measuring results and attributing success.” – Brian Czarny.
How is Consumer Data Collected and Used in Ads?
Retailers collect consumer data using mobile apps and social media platforms. They then use this data to show you specific ads, like mobile coupons for nearby stores or special deals during events like fairs or trade shows. This way, retailers make their ads more personal and practical.
The following is a step-by-step explanation of how Walmart collects and uses consumer data to create a geotargeted ad:
Step 1: Data Collection
Walmart collects data through its mobile app, website, and in-store cameras. They track customer behaviors, such as purchase history, items browsed online, and the time spent in various store sections.
Step 2: Data Analysis
Walmart analyzes this data, creating customer profiles. They identify your shopping habits, preferred products, and frequently visited store locations.
Step 3: Geolocation Data
Using your smartphone’s GPS and the Walmart app, they track your location. If you enter a specific geographic area near a Walmart store, this information is noted.
Step 4: Personalization
Based on your location and data, Walmart’s system generates a personalized ad just for you. For instance, if you’re close to a Walmart store and have a history of buying electronics, you might receive a mobile coupon for 20% off electronics.
Step 5: Ad Delivery
The geotargeted ad is then sent to your smartphone via the Walmart app or through other means like push notifications, email, or text messages.
Step 6: In-Store Experience
When you visit the Walmart store, you can redeem the personalized offer, and the app may guide you to the exact location of the products. This enhances your shopping experience and increases the likelihood of making a purchase.
Geofencing technology
“It’s important to recognize retail is becoming much more omnichannel with in-store and mobile channels blending,” – Patrick Stack.
What are Examples of Geolocation Marketing?
Here are examples of geolocation marketing that small and medium-sized retail outlets often use:
Location-Based Mobile Coupons
How They Work: Retailers send digital coupons or offers to customers’ smartphones when they enter a particular geographic area near their store, typically through mobile apps or push notifications.
Why They Are Effective: These coupons create a sense of urgency and encourage immediate in-store visits. They leverage customers’ proximity to the store and provide a personalized incentive, increasing the likelihood of purchases. The data collected through coupon redemption also allows retailers to analyze customer behavior and tailor future offers.
Geofencing for Special Events
How They Work: Retailers set up geofences around specific locations, like fairs, festivals, or trade shows. When potential customers enter these areas, they receive targeted ads or notifications about special promotions or events in the retail store.
Why They Are Effective: Geofencing around events leverages a large gathering of people. Retailers can capture the attention of event attendees who are already in a social or shopping mindset.
Offering exclusive deals or events nearby entices potential customers to visit their stores during or after the event.
Location-Based Social Media Advertising
How They Work: Retailers use social media platforms, such as Facebook or Instagram, to create ads targeting users based on their location. When users in the vicinity scroll through their feeds, they see sponsored posts or ads from nearby retail outlets.
Why They Are Effective: These ads are highly relevant as they reach users when they are near the store. Users are likelier to engage with ads promoting a nearby shop, especially if the content is compelling. This method allows retailers to tap into the large user base of popular social media platforms.
Location-Based Push Notifications
How They Work: Retailers’ mobile apps can send push notifications to customers when they are near or enter a physical store location. These notifications may include exclusive discounts, new arrivals, or reminders about loyalty program benefits.
Why They Are Effective: Location-based push notifications capitalize on customers’ immediate proximity to the store, prompting them to enter and make a purchase. These personalized messages make customers feel valued and informed, enhancing the in-store shopping experience.
Localized Google Ads
How They Work: Retailers use Google Ads to create location-specific campaigns. When users perform Google searches related to products or services offered by the retail store within a specific area, the retailer’s ad appears at the top of the search results.
Why They Are Effective: Localized Google Ads are highly relevant as they appear when potential customers actively search for related products or services. This ensures that the retail outlet’s message is seen by users who are more likely to convert. Additionally, these ads often include directions, making it easy for customers to find the store.
These advertising strategies leverage location data to deliver targeted and timely content, resulting in increased foot traffic, higher sales, and enhanced customer engagement, making them proven marketing tools.
What Does the Data Tell Us about Geotarget Marketing?
Consumer survey studies focusing on the results of location-based marketing have found that:
- 92% of (Google) searchers tend to choose businesses that appear on the first page of local search results. (Source: HubSpot)
- 77% of consumers express a greater likelihood of engaging with advertisements if those ads are customized to their specific location. (Source: Nielsen)
- 71% of consumers prefer personalized ads and are likelier to engage with them. (Source: Marketing Dive)
- 89% of brands that used geotargeted ads were able to increase sales. (Source: Factual)
- 86% of brands could grow their customer base using geolocation marketing. (Source: Factual)
Do’s and Don’ts for Implementing Geolocation Marketing
Do’s:
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- Do Collect User Data Responsibly: Gather location and behavior data while respecting privacy and obtaining proper consent.
- Do Segment Your Audience: Categorize your customers into relevant groups based on location, preferences, and behavior.
- Do Craft Personalized Messages: Create customized marketing messages that resonate with each segment.
- Do Choose the Right Geotargeting Tools: Select tools that align with your objectives and target audience.
- Do Monitor and Analyze Data: Regularly review the performance of your campaigns and adjust them based on insights.
- Do Provide Value: Ensure your geolocation marketing offers bring tangible benefits to your customers.
Don’ts:
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- Don’t Neglect Privacy: Respect user privacy and comply with data protection regulations.
- Don’t Overwhelm Users: Avoid excessive or irrelevant notifications or ads that could annoy your audience.
- Don’t Make Assumptions: Base your targeting on actual data, not assumptions about your customers’ behavior.
- Don’t Use Outdated Information: Keep your location data current to maintain campaign effectiveness.
- Don’t Ignore Feedback: Listen to customer feedback and adapt your strategies accordingly.
- Don’t Sacrifice User Experience: Ensure a seamless experience between online and offline interactions without overwhelming customers with offers.
“The mobile device has become our communications hub, our diary, our entertainment portal, our primary source of media consumption, our wallet, and our gateway to real-time information tailored to our needs. The revolution is now!” – Nihal Mehta.
Conclusion
Geolocation marketing has emerged as a powerful strategy, transforming how businesses connect with customers.
When retailers leverage the power of location data, they can customize their advertising efforts to reach customers in specific geographic areas, delivering remarkably relevant and timely messages.
This increase in ad relevancy can result in higher engagement and conversion rates, making geolocation marketing a must-consider strategy in today’s competitive market.
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