Imagine using location-detection software to help locate when shoppers are leaving certain department stores during the height of Black Friday, or contacting customers as soon as they’re walking out of a movie to survey their experience. Geo-fencing—a virtual way of geographically setting a perimeter around a particular point—allows market researchers to follow the foot traffic anywhere from an entire city block to one retail store. By determining the longitude and latitude of a particular location and then setting a radius around—for instance, a coffee shop—geo-fence technology can track the date and time of when and how a person moves across a geographic location.
While geo-fencing has raised privacy concerns, if a market research firm can commit to transparency about how the data is used, they can mine valuable data. I address several concerns researchers might have about integrating geo-fencing into their work, and I explain how to deal with those issues. In this post, I want to highlight a few of the ways that companies beyond marketing research firms can benefit from using geo-fencing to gather data.
- Capture real-time feedback. Researchers know that gathering users’ feedback on their experience immediately following a meal, movie or grocery shopping trip is more authentic than waiting for consumers to fill out a survey days later. With geo-fencing, companies can trigger a few simple questions to appear on a consumer’s smartphone as soon as they walk out of a venue to get responses in real time.
- Provide personalized service. According to Lauren Brousell, a staff writer for CIO Magazine, luxury department store Neiman Marcus is testing out a geo-fencing program that alerts sales clerks when VIP customers are shopping in the store and informs the sales clerks of the customer’s purchase history. With the geo-fencing information, the sales clerks can then tailor shopping suggestions based on the VIP’s past purchases.
- Offer hyper-local deals. Instead of sending mailers with coupons, companies can directly send promotions to a consumer’s smartphone the moment they enter a retail store. It’s a win-win for both the consumer and business, as the consumer is no longer tasked with remembering to bring the coupon to the store. Who doesn’t love a deal?
- Deliver coupons based on a shopper’s purchases. Providing discounts when customers are buying compatible products brings another dimension to a user’s experience. Amit Shah, vice president of online, mobile and social at 1-800-Flowers, told Brousell that the company geo-fences jewelry stores close to 1-800-Flowers shops. When a patron stops at a jewelry boutique, a discount offer for a bouquet will pop up on their smartphone.
- Gauge out-of-home ad effectiveness. By setting geo-fencing around an advertising campaign, such as a billboard, agencies can find out how effective print ads are by comparing the number of store visits from consumers who saw the ad versus consumers who were not exposed to the campaign.
- Track key metrics. Through this type of location-based data, companies can effectively discover how long consumers spend in their stores, when they visit and how often they return. Combining these metrics with online activity, purchase information and web browsing can help any business get a better overall sense of consumers purchasing habits online versus in person.
- Tailor advertisements during holidays. During the times of the year when consumers are searching for very specific products, geo-fencing allows businesses to provide buyers with targeted deals. For example, in the days leading up to Halloween, costume shops can offer 20 percent off to nearby shoppers.