Customer experience is the center of retail digital transformation. Real-time engagement is the biggest challenge for retail brands. Always connected customers demand quick and easy shopping journey, on the fly, to get what they want without wasting time. With the rise of the smartphone and beacon technology, location-based marketing technology has seen tremendous growth and improvement in retail industry. In my previous article in Retail in Asia (Nov 9, 2016), The Internet of Things, IoT, is a big deal for retailers I explained in details how IoT is transforming the retail landscape enabling retailers to interact and engage consumers in real-time in physical and digital space.
Location-based marketing enables retailers to better leverage their wireless networks to engage with always–connected customers and it offers tremendous growth potential as it meets two concurrent objectives; improve customer experience to strengthen the retail brand and improve ROI on enterprise wireless network investment. Location-based services (LBS) uses various wireless connectivity options, such as ZigBee, Bluetooth, cellular, and WLAN, to pinpoint customer location and collect relevant data in order to provide direct-to-customer communications that improve customer experience and customer retention rate.
Retailers has already experienced some of the opportunities that LBS can provide. For instance, some retail brands use LBS applications that measure the times and repeat visits of a customer in a particular department or section within the store. For customers who are repeatedly spending extensive time in a certain section, they may receive a push notification for a special offer on their smartphone, enabled by LBS. In addition, LBS can provide navigational assistance in larger shopping environment, as well as other context-based communications and services. The benefit to the enterprise is multidimensional: push notifications create short-term opportunities to increase customer satisfaction and engagement, whereas the analytics that can be generated can inform long-term customer strategy and improve CRM efforts.
SEE ALSO: Personalisation: Myth and Reality
LBS enables retailers to create zones for every area on the premises, deciding what offers, deals, and product details, should be shown on customer’s smartphone entering each zone. When the customers are shopping, the mobile app tracks user movements like footfall, dwell time, path taken, and more, provide retailers with detailed analytics. This can provide valuable insights into the shoppers’ behavior, personalized offers and deals, how customers should be greeted at the store, and other factors that influence the in-store experience. Retail marketers can now leverage real-time data to better target consumers based on where they go, effectively measure how digital ads drive footfall into stores, and even connect the consumer journey from ads exposure to store visit to purchase data.
Many enterprises have already discovered business opportunities through LBS. However, a recent IDC survey found that less than half of the enterprises surveyed are supporting any type of LBS. Nonetheless, the future looks bright for LBS adoption in retail. The majority of surveyed IT managers indicate a willingness to leverage LBS for communications, navigation, mobile payment, and analytics capabilities.
Mike Ghasemi is the Research Director for IDC Retail Insights & Hospitality Asia Pacific, where he leads the definition, creation and production of IDC market intelligence solutions for countries across the region. Before joining IDC, Mike spent 15 years in the IT industry, with 10 years in retail information technology software solutions.