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Location-Based Marketing Strategy
Apr 26

How Location-Based Mobile Marketing Drives Sales


In: Strategy Insights

Despite a continued increase in mobile and online purchasing, the majority of all commerce is still happening in the real world. In fact, e-commerce represented just 8.1% of total U.S. retail sales in 2016. However, with location-based mobile marketing, brands can leverage the power of digital to drive brick-and-mortar sales, utilizing valuable data to optimize the customer journey.

Recently, the Pew Research Center reported that 90% of smartphone users used location-based services on their phone, up from 74% in 2013. With this dominant majority and continued growth, the question remains: how can brands use location-based marketing to drive sales for their business?


Location-Based Marketing 101:

Location-based marketing encompasses a variety of digital techniques that offer brands the ability to target and interact with consumers with varying precision and at different costs.

Beacons are the cheapest of these technologies and are used for micro-location services such as the inside of a department store or people attending a music festival. While beacons offer hyper-targeted messaging—like a push notification with a coupon based on a specific aisle in a store—they require users to have Bluetooth enabled, which many turn off in order to save battery life.

Geolocation is simply the process of using digital information to determine a person’s location. This can be done using GPS-based location services, a user’s IP address, or with Bluetooth low energy (BLE) beacons to ping a nearby device. All location-based mobile marketing uses some form of geolocation, and they each have their own applications and advantages.

Geofencing refers to the process of establishing a digital boundary or ‘fence’ in order to target only the users who enter that space. For example, a retailer may want to send a promotion to everyone who comes within a 10-block radius of their store. With geofencing, a brand can send that message to the consumer, but it does not incorporate any personal user data.

Geotargeting allows for specialized information to help a brand tailor its messages beyond location. Geotargeted content can include user preferences, demographic information, and even purchase history to help brands pinpoint their messaging. An ideal example of geotargeting is delivering an ad campaign exclusively to women over 40 in the greater Charlotte area, plus an additional coupon if they’ve purchased before.

Right place, Right time, Right message

It’s no surprise that mobile marketing has overtaken traditional digital for the lion’s share of ad spend—we spend more time on our phones than we do on our computers. As connectivity has progressed leaps and bounds, geolocation is the next step in narrowing target audiences and boosting both CTRs and TVRs (Total Visit Rate). So far, the data agrees.  As early as 2015, location-based ads were shown to increase CTRs up to 200%, depending on the type of geotargeting being employed.

Beyond just delivering an ad to a person near your store, geofencing can be used to deliver ads to those currently near your competitor. Using “Geo-conquesting” to steal market share is a no-brainer: target customers who are already interested in or shopping for your product, but who may be unaware of your brand.   


Geotargeting for B2B

At first glance, most location-based marketing seems ideally suited for the B2C space. Retail and consumer applications are certainly the most apparent, but they are by no means the only ones to benefit. From a B2B perspective, large industry-focused gatherings such as trade shows and conferences are great examples of the potential for every type of location-based marketing. At these events potential buyers can be targeted as they enter the space, or even as they approach a booth. Geofencing allows brands to target a specific portion of an industry event focused on C-Levels, HR, or Finance, for example. Likewise, beacons can provide attendees with an interactive map to help them navigate the space. Whether looking to target by job title or industry verticals, location-based marketing can increase a brand’s visibility with higher relevance and maximize marketing dollars.  


The Future of Mobile Marketing

According to Statista, the value of in-store retail sales influenced by beacon-triggered measures in 2015 was $4.1 billion. That number has been projected to hit $44.4 billion in 2016. While the official numbers have yet to be released, there is no doubt that geotargeting, beacon technology, and geofencing are going to see double, and even triple-digit CAGRs over the coming years. It is surprising then that while 70% of consumers are willing to share their location information if they believe they are getting something of value in return, only 39% of marketers are currently using location-based mobile marketing to target customers.

With the proven success of geolocation to increase CTRs and drive sales, how long will it take before brands take full advantage of this untapped potential?  
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UNION is a full-service digital agency. We create experiences that help brands thrive. We believe to be relevant in today’s marketplace, brands must lead with a digital-first philosophy. We craft engaging digital experiences and integrated campaigns that are built on strategy and driven by data. At the heart of what we do is help brands create meaningful and enduring relationships with highly connected consumers.

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