Are retailers missing opportunities to leverage location-powered experiences?

Discussion
Photo: Getty Images/tolgart
Aug 19, 2022

Connecting the physical and digital worlds has been a goal of retailers for years. Many of the components needed to deliver location-based services have also been around for years, but the complexity of implementing infrastructure and integrating systems has kept retailers from using this technology to optimize operations.

In the recent RetailWire webinar — “Location-powered customer experience: the next retailer frontier” — a panel of experts discussed why it’s time to implement infrastructure platforms to improve store experience, service and customer loyalty through geofencing.

Smarter Stores

Delivering relevant content, in context to a shopper’s history and current activity is essential. RetailWire BrainTrust panelist Shawn Harris said, retailers should develop programs to understand and connect with customers based on where they are relative to stores:

  • Outside – improve BOPIS experience by reducing wait times, improving staff efficiency and providing timely instructions; 
  • Threshold – replace traditional traffic counting and greeters with personal digital messages; 
  • Inside – send messages and promotions triggered by store displays, shopping lists, etc.

Loads of Loyalty

“Think of loyalty in terms of why customers should pay attention to your brand,” said BrainTrust panelist Phil Rubin, founder of Grey Space Matters.  Historic and real-time data allows brands to better serve customers in the ways that matter most to them.

  • Recognition – understand where customers are physically located as well as their current purpose;
  • Time – make it easy for customers to complete the task at hand;
  • Value – serve up curated content, advice and assistance based on where consumers are located at any point in time.

Future Gazing

A solid infrastructure provides the basis for location-based services on which new devices and services can be built, data can be collected, analytics can be applied and new devices and technologies added to deliver communiqués and capture information.  

  • Get consent from customers to use first-party data (information collected directly from customers, site visitors and app users) is essential to making meaningful connections. Merkle found that 86 percent of consumers were willing to trade their information to receive personalized offers based on their interests, browsing or purchase history; 
  • Integrate martech systems to seamlessly automate data collection, message customization, delivery and measurement;
  • Make an app the centerpiece for interactions. Featured webinar panelist Nick Patrick, co-founder and CEO of Radar, said that engagement improves when an app is a consumer’s constant companion.  

Now is the right time for retailers to implement location infrastructure and systems that deliver top- and bottom-line benefits.

DISCUSSION QUESTIONS: Why have retailers been slow to implement location-based solutions? Where does geofencing offer the biggest benefit for retailers?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The faster retailers ace the tech aspect, the sooner they can prove the value of these services to consumers."
"Location-based solutions such as geo-fencing, when coupled with a strategy and permissions, could offer huge benefits."
"Probably the biggest reason retailers have been slow to implement location-based solutions is that they have more pressing issues and priorities."

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16 Comments on "Are retailers missing opportunities to leverage location-powered experiences?"


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Dion Kenney
BrainTrust
3 months 20 days ago

It’s true, the technology to blend online and local has been around a long time. This unadopted capability is, in fact, the reason for the creation of Mondofora and a few other “local online” platforms that address the gap. One possible underlying cause of the intractability is that many retailers’ brick-and-mortar operations are managed by different teams than their online operations. They think differently. They have different worldviews. Their knowledge base is different. And they often compete for performance metrics and results. As with so many organizational issues, internal politics can prevent a holistic response and finding the 1+1=10 solutions.

Bob Amster
BrainTrust

Geofencing can work well for retailers as long as they do not bombard customers who have opted in with ads and messages. These can have the opposite of the desired effect.

Kenneth Leung
BrainTrust

Never understood why retailers think they need to bombard offers when the customer in the store. Customer is in visual exploration or search mode. Provide aisle information for products searches for those needing in/out and promotion information for those who are browsing. Do we really need the phone to alert me that the ice cream is on sale when I am close to the freezer aisle?

David Naumann
BrainTrust

Probably the biggest reason retailers have been slow to implement location-based solutions is that they have more pressing issues and priorities. During the past two years, many retailers have been hyper-focused on optimizing omni-channel fulfillment capabilities to address the significant increase in buy online, pickup in-store (or curbside). Many of these processes were clunky or non-existent. I agree that now is the time to implement location-based solutions and it will enhance the personalization of shopping experiences, especially for loyal customers that opt in to the services.

Ken Morris
BrainTrust

This is about infrastructure. Retailers need to make the investment in a real-time central nervous system to sense and respond. Until that investment is made, the promise of location-based solutions will not be realized. Speaking of the future, NFC readers have been built into phones for several years now, and we should expect more powerful RFID chip readers soon. The possibilities for creative uses of RFID in retail will grow exponentially once this happens, and retailers should start thinking about this now. But retailers should also walk the fine line of intrusive vs. desirable carefully. A majority of shoppers are willing to give up their information and privacy, but they expect real benefits (often in the form of discounts) in return.

Patricia Vekich Waldron
Staff

Infrastructure is exactly the key, Ken! With a platform and real-time integration to marketing, analytics and other systems, retailers can turn bits of data into insights and actions that improve service and sales.

Ron Margulis
BrainTrust

Not sure I agree with the premise of the first question. Yes, retailers in the U.S. have been slow to implement location-based solutions – it’s really been a priority thing. But retailers in Asia and Europe were making solid progress prior to COVID-19, particularly around personalization and loyalty rewards, and the pandemic accelerated the effort. There are great examples from South Korea of digital panels at transportation hubs with personalized promotions for shoppers. And loyalty messages for shoppers at certain retailers in Germany. It’s coming to the U.S.

Melissa Minkow
BrainTrust

I have felt passionately about location-based communication and services for a while because it’s such a helpful form of personalization. However there are hurdles (not impossibilities) to the tech implementation side and to consumer receptivity because of privacy fears. I think retailers just need to be convinced it’s worth the investment. The faster retailers ace the tech aspect though, the sooner they can prove the value of these services to consumers.

Patricia Vekich Waldron
Staff

Retailers have always been hesitant to adopt tech without a proven return, especially ones that require connection to many devices, processes and systems. The ability to have such a direct and personal connection to customers, especially at the point of purchase provides a tremendous amount of value.

Raj B. Shroff
BrainTrust

I think David is right in terms of retailers having other priorities. There are a handful of third-party apps which target shoppers based on their locations and push coupons and marketing messages. I think other factors are lack of savvy in the C-suite with digital tech, legacy systems, silos, no burning platform (look how many dragged their feet on BOPIS) and shoppers not seeing good examples of it so not discussing it in research.

Location-based solutions such as geo-fencing, when coupled with a strategy and permissions, could offer huge benefits. The examples above, BOPIS, promotional messaging, payment and visit insight are among the best uses to date.

Di Di Chan
BrainTrust

Retailers have always been slow to implement most new retail technologies. For example, it took over three years for retailers to adopt grocery carts and about a decade to implement scanning bar codes. The long implementation timeline in retail weeds out technologies that are just a temporary fad. Solutions that make it through the long retail timeline also offer enough benefits to have long-staying power.

Location-based technology is extremely promising as a long-term retail technology solution because navigation and location-based marketing significantly benefit the in-store shopping experience. Westside Market is one of the earliest adopters to combine SIRL’s location navigation with their mobile checkout app. Shoppers can use their app to find items quickly. Shoppers could also receive relevant coupons next to the actual products. When more retailers are ready to renovate their in-store experience, location-based technology will be one of the few in-store solutions to deliver significant returns.

Phil Rubin
BrainTrust

First, thanks for a great webinar everyone! The slowness of retailers to adopt LBS and other new technological capabilities has everything to do with a lack of emphasis on the customer and the customer experience. Unless or until leadership makes customers a priority as part of the business plan – not just the marketing plan – the leaders and challengers will continue to be separated from the laggards.

Andrew Blatherwick
BrainTrust

Localization and certainly personalization of communications and promotions is taking place in areas of Europe and the rest of the world. Most retailers do not have the infrastructure to be able to do this well and if it is mismanaged it can be dangerous and damage the brand. Care needs to be taken not to overcommunicate with customers or get their preferences wrong. Solutions are improving all the time and accuracy of targeting is improving.

Scott Norris
Guest

About five years ago, I was part of a tour inside the Mall of America’s operations command center – and what they were doing with geofencing even then still impresses (both in the wow and yikes senses). Everything from predictive safety and directing security staff to figuring out which restrooms need cleaning to of course targeted direct messaging for those who opt in. They’d be great to loop back with for a demonstration and discussion with the RetailWire readership!

Ananda Chakravarty
BrainTrust
Location powered experiences, especially geofencing and in-store tracking have three issues to contend with: ROI is not there (yet) Customer demand is not there Privacy challenges In most cases, the retailer is hard pressed to find examples where an expensive, shiny new technology can find its way into driving strong ROI. Few examples exist, and retailers have already emphasized and been disappointed by the first experimental passes. Just a few years ago, LBS was a hot retail topic. Customers aren’t interested in figuring out the complexities of using LBS, and they’re wary if the retailers are creepily coming out to the parking lot just as they drive in — “Did you track where I came from?” Participating in LBS means customer consent to tracking and in some cases downloading apps, providing information, and more. Privacy continues to be an ongoing challenge for retailers. Where does retail jurisdiction start — in the store? parking lot? vicinity? When is it ok to capture customer information and use it for advertising, promotions, or just plain making money for… Read more »
Oliver Guy
BrainTrust

The promise of your order being ready as you entered the store — without you identifying yourself, was one I talked about 10 years ago. A few things got in the way — privacy concerns being the most obvious because no retailer wants to be seen to tip the balance from personal experience into spooky experience.

Technology too is a barrier — geofencing is still felt to be a new technology.

wpDiscuz
Braintrust
"The faster retailers ace the tech aspect, the sooner they can prove the value of these services to consumers."
"Location-based solutions such as geo-fencing, when coupled with a strategy and permissions, could offer huge benefits."
"Probably the biggest reason retailers have been slow to implement location-based solutions is that they have more pressing issues and priorities."

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