When the film “Minority Report” first aired in 2002, the premise of the science-fiction film may have seemed inconceivable, but predictive technology is swiftly moving into the average consumer’s realm. Today, you can enter a mall and immediately receive ads and promotions based on your personal taste and past purchases on your smartphone. We have geofencing to thank for that. Centered around location, a geofence is a virtual boundary or fence that surrounds a specific geographic location. When a location-enabled mobile device breaches one of these fences, companies can send a text, email or push notification to users. Just like those Starbucks notifications.
Considering the fact that 80% of consumers want location based alerts from businesses and nearly 3 out of 4 consumers complete an action after receiving a message when approaching a physical location, you can’t afford to dismiss geofencing. Here’s what you’ll miss if you do:
Increased Sales: Sending targeted messages, notifications or digital ads can result in faster conversions, as 53% of shoppers visited a specific retailer after receiving a location-based alert. With geofencing, American Eagle Outfitters was able to boost both foot traffic and revenue at its outlet stores by pinpointing shoppers who entered the geofenced mall parking lot with promotions. The campaign tripled the sales at its outlet stores.
Customer Retention: Good business is all about keeping your customers happy. Statistics show that customer retention by 5% can lead to an increase in profits of 25 to 95%. Geofencing can serve as another retention tool at your disposal by sending push notifications. For instance, whenever a Walgreens customer enters one of their geofences, the customer receives a push notification which, when swiped, opens the Walgreens app, displaying the customer’s reward card and a list of personalized coupons.
App Engagement: Keeping users engaged is one of the biggest challenges for all mobile apps. Data shows that the average app loses 77% of its DAU within three days. With geofencing, however, you can drive engagement by sending your app users location-based push messages the instant they approach or leave a geofence. Of people who open a push notification, 54% of users convert from segmented pushes, compared to only 15% who convert from broadcast messages.
Now that we’ve discussed the benefits of geofencing, let’s see what role it should play in your marketing.
Hit The Bulls-eye With Targeting
Marketing to the right crowd is business 101 and a fantastic way to maximize your advertising dollars. While you can collect targeting data from various sources, 61% of marketers rate location data “important” for targeting. BIA/Kelsey’s forecast for advertising to and targeting local audiences shows that location-targeted mobile ad spend will nearly triple from 2016 to 2021, an increase from $12.4 billion to $33.3 billion. This amounts to 45% of total mobile ad spending by 2021.
To identify consumers likely to be receptive to their products, smart marketers are embracing geofencing.
Using the Taco Bell app, Taco Bell utilizes geofencing to target people under 30-years-old with push notifications whenever they are in the vicinity of a Taco Bell. This strategy resulted into an increase in their annual sales of 6%. You can also target consumers who visit your competition with geo-conquesting. Geo-conquest allows you to build fences around rival locations and push incentivised content to redirect shoppers to your own business. With geo-conquesting, Quiznos’ mobile advertising campaign targeted people who had visited nearby competitors such as Jimmy John’s and Subway. The geo-conquest resulted in a 20% increase in coupon redemptions and 3.7 million impressions.
Deliver The Omnichannel Customer Experience
With the dawn of omnichannel retail, you can’t ignore giving consumers a unified experience offline and online-unless you’re prepared to witness the quick death of your company. According to Accenture, 32% of consumers agree that the biggest improvements retailers need to make is to integrate the mobile, website and in-store shopping experience. Statistics state that companies with omnichannel customer engagement strategies retain 89% of customers compared to 33% customer retention rates for companies with weak omnichannel strategies.
As smartphones are crucial to omnichannel retail and the majority of commerce happens offline, geofencing can seamlessly integrate the online and offline experience by engaging customers directly on their mobile device at any location. Take a look at Meijer Inc, a US supermarket chain. Customers who prepare shopping lists online can open Meijer’s app inside the store, and the app reorders their list based on their location in the aisles, speeding up the shopping process. Another brand that has constructed an effective, unified physical and digital experience is Walmart. Using geofencing technology retailers are alerted when a customer arrives the parking lot to pick up an online order. Also, Walmart’s wishlist app feature allows consumers to add desired items from home or by scanning items in-store. Little wonder then that Walmart’s app is the second most popular shopping app after Amazon.
Don’t underestimate marketing attribution. 56% of marketers believe attribution is important, while 33% believe it’s nothing short of critical. Despite the crucial role attribution plays in marketing, according to the 2017 State of Marketing Attribution report, 81% of marketers state that mobile presents a significant cross-device attribution challenge. The issue? Marketers struggle to relate the impact of digital to offline behavior. But attribution doesn’t have to be a nightmare. With geofencing, you can leverage powerful metrics, such as click-to-visit, that better reflect the real-world buying decisions of customers and directly measure which advertising campaigns are effective in driving customers in-store.
Verifone Media, the leading gas-pump ad media provider, used geofencing to prove its campaign reach, value and impact. In a tier-one retailer campaign, Verifone Media was able to determine that consumers exposed to the Pump Media ads visited the client’s retail locations more than twice as much as a control group.
With geofencing you can accurately calculate your ROI, better understand digital and offline interactions and stop fidgeting at your weekly meetings.
Get To It
Geofencing is a goldmine and extremely valuable. If you’re a smart marketer, you’ll use geofencing to target the right crowd, deliver an omnichannel shopping experience, demystify attribution and ultimately grow your bottom line. It takes minutes to get started, so go on!