Retailers test location-based services

The advent of smart, constantly-connected handheld devices means customers are more mobile than ever before. It is now possible for multichannel marketers to use location-based services (LBS) by leveraging the native GPS applications within a smart device to pinpoint a customer’s location. While using these technologies creates new opportunities for marketers looking to reach out to on-the-go consumers with relevant promotions, mobile strategies have by and large not yet matured to the point where LBS is a standard component.

Outdoor e-commerce apparel retailer The North Face, for instance, has an opt-in program called Summit Signals, powered by location-based digital advertising company Placecast. Summit Signals uses a mobile phone’s built-in GPS to detect each customer’s location and, when the customer enters a specified area around a North Face outlet (this is called a “geo-fence”), they get a text message about a certain promotion, deal or activity. Interested customers sign up on The North Face website with their phone number and their gender and select the number of texts they wish to receive per week.

“To be honest, (LBS is) not a terribly high priority for most marketers across the board,” says Melissa Parrish, senior analyst at Forrester Research. Leveraging a customer’s location, Parrish says, is relegated to a handful of innovative, high-profile brands like Starbucks or Pepsi. “One reason you’re seeing these innovative brands doing this testing and not a lot in between is the idea of using location is a bit outside of the norm,” Parrish adds.

While North Face’s Summit Signals program is active today, similar geo-fencing pilots run by other brands — like Starbucks and Sonic drive-in — have since ended. While Parrish notes that in general brands are thinking more strategically about mobile, most brands maintain an experimental approach to incorporating LBS — either relegating it to certain geographies (Sonic focused on the Atlanta area), on certain promotional campaigns or some combination of both.

For many brands, using location-based services means inciting a customer to check into the store via a social network like Foursquare. Parrish says marketers need to keep in mind that LBS doesn’t simply mean a check-in at a social network. In many instances, LBS runs behind the scenes.

Jaguar, for instance, incorporated LBS in a recent mobile strategy specific to Canada. Jaguar particularly focused on location programs; because Canada is a smaller market, reaching the audience through traditional broadcast media wasn’t viable. Jaguar’s approach was three-pronged: the automaker used search through Google Adwords, designed Quick Response codes to reach on-the-go customers and leveraged local search with an on-device smartphone application called Poynt.

“Local search is important going forward because it combines both the high quality traffic with contextual relevance — basically it increases our chances of reaching the right prospect at the right place and time,” says Steven Majewski, national marketing manager at Jaguar Canada.

The luxury car manufacturer ran banners on Poynt that touted Jaguar’s superior performance against its competitors and, most importantly, had click-to-call capabilities to request a test drive. Ultimately, 7.5% of the customers viewing the banners contacted a local dealership.

While this particular campaign has run its course, Ames says the company is in the planning stages of ramping up a new mobile marketing initiative. “Every year Jaguar works with us and we set aside a budget for experimental stuff and new media,” Ames says. “Our approach is to optimize.”

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