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Repercussions of the digital revolution
It is almost that time of the year when people brace themselves for the upcoming shopping earthquakes, namely the Thanksgiving, Black Friday, and Christmas. Some are already scrolling through their favorite online shops, looking for the first signs of massive discounts. And considering the past year’s research by Adobe Analytics1, we can rightly assume that a large portion of customers will stay online to fill out their virtual carts.
Both Forbes2 and Coresight3 confirm that ‘the classic’ brick and mortar stores are currently dealing with a significant traffic decline, especially in the US and other developed markets. Identifying the success of mass-scale e-commerce companies such as Amazon as one of the critical reasons for the ongoing decrease, the stats reveal that unless retailers find a way to make an in-door experience more attractive again, providing real omnichannel experience for customers, they will be forced to abandon their physical posts. Fortunately, it may be that modern technologies, such as geofencing, are now coming to their rescue.
First things first, why geofencing?
Even though location-based services cannot be considered a real novelty, as they have been around for several years, it is only now that their actual use in commercial spaces is becoming ‘the thing.’ The same applies to geofencing – the process of using GPS or radio frequency identification to outline a geographic boundary at a particular location – which can be regarded as belonging to the family of location-based services. Defining such a virtual periphery allows you to trigger email alerts, text messages, or push notifications whenever a customer enters the designated area with their mobile device. In other words, you can provide your clients with the right, personalized marketing content at the right time and place to improve customer experience, intensify foot traffic, and increase conversion rate. So, how does it look in practice?
Keeping up with the Joneses – Real-life scenarios
As an example, Sephora, a multinational chain of personal care and beauty stores, is been known for using geofencing technology to deliver ‘the ultimate shopping experience’ for that past couple of years. Not only does its app give customers instant access to the history of transactions and new product recommendations, but it also serves as an everyday store companion that sends location-targeted messages with personalized offers or reminders as soon as the client enters one of its stores.
Home Depot’s application, on the other hand, was designed to provide the so-called “product locator” tool – a software-driven guide that directs customers to specific products based on their current position. Some companies, such as American Eagle, go even further - using geofencing to enhance their gamification techniques. Thus, every interaction within their stores may result in additional loyalty points, and exclusive product offers, making the whole in-door experience much more engaging and addictive. As good as it sounds, however, enterprises need to be careful about going too far, that is overusing geofencing techniques to the point where they become a burden for the customers.
Finding the right balance
It is undeniable that geofencing can play a major role in driving customer loyalty and better business results – and it can do that in so many different ways. Event organizers use it to promote upcoming concerts and art festivals in the vicinity of venues. Airports and train stations have also found it to be a practical marketing tool for advertising its wide range of services. And it’s not just that. Geofencing has enabled companies to collect valuable feedback in real-time – sometimes at the very moment an interaction takes place. That gathered data can be further analyzed to help define even better marketing strategies – ones that will meet their customers’ personal goals and needs.
There are certain principles, however, that companies need to follow to become and remain successful at using location-based services. First and foremost, they need to identify their target customers and understand their mindset, that is determine what type of content those clients would really enjoy. Then, it is crucial to establish the rules of geofencing campaigns in terms of how much of that content will be distributed over a given period of time. One cannot allow their customers to feel overwhelmed by a massive number of notifications – no matter how good the offers are. Similarly, the company needs to stay proactive, in the sense that it needs to continually track the results of whether the content turned out to be successful regarding its marketing goals, and make necessary adjustments to the strategy if it is not working well enough.
Once these issues are covered, a company can start improving its geofencing strategy with rewards programs enhanced by gamification mechanics. There are, of course, other opportunities, such as defining a geographic boundary right next to your competitors to try to convince your potential clients that what you deliver is much better and at a lower price, compared to what they can elsewhere. And while the possibilities seem endless, what you, as a retail company, need to remember is that even though someone likes a chocolate cake, it does not mean he or she wants that for every meal. That is why finding the right balance is so important.
Even though the above-mentioned points are some of the most crucial ones, there is one more piece of advice that we can give you so that you can use it to your advantage.
In the end, it’s all about finding the right technology provider
Yes, teaming up with a reliable partner and well-renowned IT services provider is key for using geofencing technology to its full potential. And as it turns out, there are several software developers such as Comarch that offer a variety of IT solutions including geofencing, location-based services and loyalty schemes with gamification mechanics. Working with a global vendor who has gained a lot of experience while carrying out hundreds of loyalty projects will give you confidence that your company will never be short of high-quality technical and business support. You will also happen to be working with a visionary that constantly develops and improves on existing solutions.
Selecting an IT provider is no easy task; therefore, it is strongly recommended that businesses should take a more proactive approach. Shortlisting vendors who have substantial experience in marketing solutions with a solid number of global projects will go a long way toward finding the right fit for your company’s IT needs. And remember - unless you make the decision soon enough, it may be much more difficult for you to catch up with your competitors.
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