Geo-targeting an underused technology for retail marketers?

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Back in 2013, geo-targeting, or location-based marketing as it’s alternatively referred, had already passed through the ‘trough of disillusionment’, climbed over the ‘slope of enlightement’ and was on its way across the ‘plateau of productivity’ in Gartner’s Hype Cycle for emerging technology.

However, the reality of the technology’s adoption rates appears to be very different.  Especially in the retail sector, where geo-targeting was expected to create the most disruption.

Defined as “the practice of delivering different content to a website user based on his or her geographic location”, geo-targeting technology has been forecast by many, including Gartner, to be the perfect bridge between smartphone users and bricks-and-mortar retailers, due to the ability to push direct marketing messages, coupons and offers to people who were, by proxy of their location, potential customers.

But according to Adobe’s latest Digital Trends 2015 report, just 8% of retailers currently use location-based technologies, compared with 23% of telecoms providers, 18% of financial services, 18% of consumer goods suppliers and 10% of travel and hospitality providers.

And while geo-targeting technology is clearly on the radar for many retail businesses, as two out of every five (40%) of Adobe’s retail respondents are currently exploring the technology, questions remain as to why geo-targeting hasn’t experienced more of a propagative effect in the sector.

Last April, Aimia’s VP of global digital strategy, Martin Hayward suggested the potential offered to bricks-and-mortar retailers meant we were set for a “Wild West” landscape, with retailers testing the boundaries of what geo-targeting could really offer.

However, the reverse appears to be happening, with Adobe’s research suggesting retailers are approaching the technology with caution, potentially restraining themselves through fear of Hayward’s prophecy that customers might be “overwhelmed by the sheer volume of messaging and requests they are going to receive once geo-targeting gets going, leading to possible questions around intrusion.”

And with intrusion and privacy high on the priority list in testing the location-marketing waters, retailers are said to be having to tiptoe around what value the technology can offer customers, beyond being seen as a data collection tool:

“[Geo-targeting] is already being used by retailers on Regent Street in London, with retailers sending users ad’s as they walk past shops,” said Omer Artun, founder and CEO of predictive analytics company, AgilOne, in a recent post on MyCustomer.com. “However, it strikes me that if this is all they plan on doing, they might as well save costs and put up a bigger sign or one with more information on to make their stores location more visible.”

Such issues may go a long way to explaining why in Adobe’s report, despite 40% of retailers exploring the technology, only a further 13% plan on using geo-targeting technology in the next 12 months.

Adobe remains confident that retailers will get to grips with the best use of the technology, though, which should lead to a tipping point in months to come: “When utilised correctly, its implementation can increase sales value per customer, retention and brand loyalty without retail staff doing a single thing,” the report states.

Chris Ward
Deputy Editor
MyCustomer
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