Location-based marketing has been the buzzword in the marketing world for quite some time. But with mobile driving marketing budgets and plans in 2016, location-based advertising strategies are sure to open doors for huge new opportunities this year, especially when done right. According to the “Global Location Trends Report” launched at SXSW, 75% of 253 global marketers, including Starbucks, BMW, and Coca-Cola, believe that Beacon-based proximity marketing will play a crucial role in their businesses this year. The report also went on to reveal that all location technologies including beacons, Wi-Fi and GPS, are set to grow by double digits – 63% of marketers plan to invest in Wi-Fi, 57% in GPS, about 41% plan to invest in beacons in 2016.
Location data is easy to find, consumer permissions are hard to get
It goes without saying that the primary trick in any location-based marketing strategy lies in getting consumers to actually share their location information. Few of the recent studies on consumer willingness to share personal data such as location prove that just because people can easily engage in location-based marketing campaigns doesn’t mean they will.
According to a consumer survey by Boxever, a customer intelligence firm for the travel industry, 60% of consumers indicated that they want offers that are targeted to where they are and what they are doing while 62% said that they don’t want brands tracking their location. Now if you are a marketer looking to leverage location-based marketing strategy this year, fret not, for there is still some ray of hope among such mixed results.
A Microsoft study entitled “The Consumer Data Value Exchange” found that consumers are willing to share data in exchange for cash rewards, discounts, and other perceived benefits. Here are some of the incentives identified by the study:
– 99.6% would share data for cash rewards
– 89.3% would share data for location-based discounts
– 65.2% would share data for loyalty points
Thus, while monetary rewards are particularly persuasive, discounts aren’t the only value brands have to offer in exchange for location data. They can also offer contextually relevant content to consumers based on their location data.
Brands Getting Location-Based Marketing Right
As we discussed earlier, rising growth in popularity of wearables and sophistication of mobile devices has resulted in consumers becoming more comfortable with sharing their location these days. Taking this to their advantage, many forward-thinking brands are busy getting creative with geo-targeting and other location-based tactics via location-based marketing apps and tools. Here are 4 such innovative brands :
1. Ice cream brand Van Leuween
The New York ice cream store, Van Leuween, provided users with mobile payment options and used this feature to track the location of the user via the PayPal app. As a part of this campaign, customers were required to install the PayPal app on their mobile device and link it to their PayPal account. Once that is done, the app used geolocation to detect when a consumer was near a Van Leuween store and enticed them in-store with special offers and deals. Users were then allowed to place an order and pay for their treats via the mobile app.
Takeaway: According to the proximity mobile payments forecast from eMarketer, the total value of mobile payment transactions in the US will grow 210% in 2016. Given that, you can capitalize on this trend by offering your consumers mobile payments options that are capable of tracking location. The use of location data will increase your chances of influencing the decision of a customer at the moment-of-truth by ensuring that the deal remains contextually relevant.
2. Supermarket chain Whole Foods
Last year Whole Foods partnered with the location-based marketing firm Thinknear to improve post-click conversion rates for its mobile ads while wooing potential customers away from it competitors. The supermarket chain tapped into Thinknear to place geofences around a number of Whole Foods store locations and targeted ads and special offers to mobile users who passed by. Whole Foods also employed geo-conquesting tools (by placing geofences near competitors’ stores) to target ads at shoppers near competing for grocery stores, thus incentivizing them to travel a bit further in exchange for better deals at Whole Foods. The campaign yielded Whole Foods a 4.69% post-click conversion rate – more than three times the national average of 1.43%.
Takeaway: Geo-conquesting the offline stores of your competitors is a sure shot at influencing the purchase decisions of consumers who pass th
rough those areas. In fact, this form of place-based targeting is so popular, that most of the geo-fencing campaigns run by the brands and businesses on the xAd network will include a component of geo-conquesting.
You can now add geo-fencing and beacon-based notifications with Beaconstac’s partner, Kumulos. A mobile app performance management system, Kumulos helps you manage the technical and the commercial side of the beacon app.
3. Luxury department store Barneys New York
Barneys New York recently leveraged beacons to digitize its flagship store in Manhattan’s Chelsea neighbourhood. The luxury department store launched an iBeacon platform with its mobile app to alert users when new content is uploaded, as well as help customers navigate the store. As a part of this beacon campaign, when a user opens the Barneys New York app he or she will see two prompts: the first is to permit push notifications, and the second is to allow Barneys to use customers’ location to determine if they’re in or near a Barney’s store. Once the user grants access, he or she will receive notifications based on what’s in stock that’s also in his or hers mobile shopping bags or wish lists, as well as recommendations based on the content that he or she recently opened on The Window, Barneys’ in-house publication.
At the same time, few aspects of the retailer’s beacon program appear to be more aligned with customer desires than others. One such feature is Barneys’ recommendations for dining and sightseeing in the Chelsea neighbourhood. This provides clear, location-based relevancy for shoppers who are looking to grab a bite or their next activity — and it doesn’t feel designed to directly push Barneys merchandise, which helps customers feel that their interactions with the store are more “genuine.”
Takeaway: It goes without saying that Barneys New York is a perfect example of what a successful location-based, in-app communication should be built around. If you are a marketer looking to leverage location-based marketing strategy to your advantage, you need to think beyond simple push notifications on offers or content and focus on the desires of your customers. This will help you find a delicate balance to keeping your users from being annoyed or overwhelmed by frequent notifications.
4. Gas Buddy
GasBuddy is a popular mobile app designed to help users find the best gas prices in their local areas using crowdsourced data. The app allows users to share their location and report what how much they’re paying for fuel. In exchange, the app allows them to see gas stations where their fellow users have found better deals. As a result, the GasBuddy app has been downloaded more than 52 million times.
Takeaway: Like we said earlier, discounts aren’t the only way to get mobile users to share their location. Providing useful information is also a great way to engage users. And GasBuddy has proven, you can even master this by crowdsourcing such data rather than generating the content from scratch on your own.
Are there any other brands that are nailing location-based marketing? Let us know in the comments below.
If you’re looking to transform your app into a beacon powered app, you can simply integrate NearBee SDK into it and start running your proximity marketing campaigns today.
If you are planning a beacon pilot, take a look at Beaconstac, that includes everything you need to get started. Using Beaconstac you can set up your own campaign, without a developer’s help! Or are you a brand that wants to dive into proximity marketing, but worried about not having an app? Worry not, we have a solution for it too.