There’s a reason that stores have their names in big letters on the front of their buildings, just as there’s a reason for all of those signs and banners that hang inside. It’s because people are more likely to make a purchase when they are already at or near a store.

While that statement may seem like common sense it is worth reiterating – few motivators work as well as proximity. Actually being there, being able to touch and feel a product, try it on, or take it for a test drive is the reason that 62 percent of consumers say that still shop in stores, according to research by Retail Dive. It’s followed by 49 percent who like the ability to take their items home immediately.

That is a brick-and-mortar store’s main advantage over their ecommerce rivals. It’s why signage and in-store advertising remain effective. It’s also why mobile advertising tied specifically to a person’s location, known as location-based marketing, is increasingly utilized by a wide variety of companies.

So, what exactly is Location-Based Marketing?

Location-based marketing, which is also known as geomarketing, is a form of advertising that is entirely based on where a consumer is at any given moment. Meaning these promotions do not need to make assumptions about an individual’s preferences and buying habits. If someone is at, near, or previously visited a location, an ad can be targeted specifically to them based on this information.

In addition to being an extremely effective method for generating business, location-based marketing can help companies segment their consumers. Customer segmentation is when companies group their consumers by demographics, such as interests, earnings, etc. Someone’s location is a critical consideration in segmentation and knowing a specific location at any given time is a significant advantage.

It is also a powerful data gathering tool. By understanding who visits a retail location and when, your brand will gain a more in-depth insight into the motivations behind your consumers.

Who Benefits Most from Location-Based Marketing?

As with most technologies that increase in popularity and use over time, location-based marketing has become increasingly affordable over the past few years. Still, some businesses will find more significant benefit from the technique than others. 

While the focus is often on retail, trade shows and events can benefit greatly from location-based marketing. The technology can be used to send a welcome text or email to attendees when they land at the airport, pass the city border, etc. It can be used at the event itself to help compatible attendees locate each other to facilitate networking. It can also alert attendees to special occurrences in their specific area (such as a talk that’s about to occur or a raffle that is close to being announced). Similar tactics can be used at sporting events to offer special promotions on concessions, merchandise, and season tickets.

Photo Credit: Stylus

Of course, clothes, electronics, toys, books, and, really, any retailers can utilize location-based marketing to attract crowds and push promotions. However, the benefits are not limited to traditional retail; grocery stores, restaurants, and bars can also benefit from the technology. Even locations that sell big-ticket items, such as car dealerships, can utilize location-based marketing to make sure their brand remains top of mind as consumers make these important purchasing decisions.

Will Location-Based Marketing Work for Everyone?

We just detailed the business that would benefit the most from location-based marketing, now let’s examine those that would be better served utilized other marketing techniques.

For example, most ecommerce businesses should avoid location-based marketing because they lack a location. A physical retail space is of primary importance for this type of marketing. Although, there are some sneaky ways that ecommerce retailers can utilize location-based marketing. An ecommerce company could make it so a promotion for the ecommerce brand pops up when a consumer approaches their brick-and-mortar rivals. Or, the tactic doesn’t have to be quite so devious. Often, ecommerce retailers have products that are for sale in physical locations that could be promoted through location-based marketing.

There are also some retail locations that are ill-suited to location-based marketing. Stores that are close to other stores, such as in a mall – especially if the store has a small footprint, may find that location services are thrown off or become confused by so many nearby stores.

Is Location-Based Marketing a One-Size-Fits-All Proposition?

There are actually several different versions of location-based marketing that you and your team can utilize.

Geofencing

Geofencing may be the best known of the location-based marketing options. With geofencing, a virtual boundary is created around a physical, geographic area. When anyone enters this area, an app or another piece of software on their mobile device triggers an action, such as a push notification, an alert or text message, or a targeted advertisement on social media or their browser.

Photo Credit: Propellant Media

However, geofencing isn’t used just for marketing. Venues can use geofencing as part of their security to monitor people entering or leaving an area. Business can use the technology to replace time cards and track shipping vehicles.

The location services used in geofencing depend on the provider. Of the options, it is generally preferred to utilize cellular and Wi-Fi. Although they are accurate, GPS-based solutions tend to be power hogs. Cellular and Wi-Fi solutions, on the other hand, are reliable and friendlier to a user’s battery. So, try to select a geofencing solution that it is balanced between battery usage and accuracy.

Geotargeting

Geotargeting utilizes a person’s current or past locations to deliver ads and content based on a specific geographic region. This differs from geofencing in that someone does not have to enter an area to trigger an ad, they simply have to live or be there.

For example, if a store wanted to drum up business for a sale, they could send a notification to everyone who visited the store within the past three months. That’s an instance of geotargeting using someone’s past location history.

You may have already experienced geotargeting using your current location today. Have you ever been reading an article on the internet and noticed an ad that seemed weirdly specific? That browser utilized geotargeting to deliver that content to you.

Geoconquesting

This is a relatively new concept for location-based marketing. Geoconquesting delivers ads or promotional material to someone while they are at or near a competitor’s location. Geoconquesting campaigns are usually run with a tongue-in-cheek attitude; however, you cannot control how the competition will react to your efforts.

We’ve already given an example of geoconquesting with the ecommerce company that targeted its brick-and-mortar rivals. Another example is a tourism board that focuses on visitors of other nearby cities to promote the amenities found in its berg.

Location-based marketing is an extremely effective way for many companies to ensure that their ads and content get in front of people at the exact time it can benefit them most.