Is location-based technology right for your store?
One of the latest innovations in retail technology makes use of smartphone locations to deliver highly targeting advertisements and services to shoppers. Apple's iBeacons allow retailers to pinpoint a customer's precise location through opt-in technology, making it possible to deliver ads based on details like whether a patron is standing in front of a specific display. Philips developed a similar system using store lighting to send information to shoppers' smartphones as they browse the aisles and request data on apps. Other stores have used information from devices that are connected to their Wi-Fi networks to assess shopping trends and interact with customers.
These options are beginning to gain a foothold in the retail industry. For example, Alex and Ani recently implemented an iBeacon system in all 40 of its store locations, Retail Info System News reported. The jewelry seller uses the technology to send messages to customers' smartphones based on their precise location within the store, after they opt-in to the micro-location Bluetooth service. The source noted that Alex and Ani enjoyed a 75 percent engagement rate during their pilot program.
Deciding on location-based strategies
How can retailers know whether this strategy is right for them? There are many advantages to gathering more data about shoppers' habits and interacting with them in a more personalized manner. However, there are some considerations that merchants should take to mind before deciding on new technology for retail marketing.
Street Fight Magazine offered a few guidelines for merchants considering location-based marketing tools. In the immediate future, the source explained, larger retailers with a significant amount of foot traffic are more likely to benefit from the technology than smaller stores. Merchants also need to make sure they will be able to analyze and effectively use the data. Location-based technology is an investment, and it requires additional services to be in place, including retail management software that facilitates data analytics.
Store managers should also make sure that customers will be open to location-based technology. Medill Reports described how some hyper-personalized marketing based on location can seem invasive to shoppers. Offering shoppers the option to opt-in to location-based services can help avoid making them feel like they have Big Brother looking over their shoulder. Merchants should also evaluate how the technology can add value for their customers, Street Fight recommended. To assess this factor, retailers can consider their consumer base, the general shopping experience and patrons' preferences.
