Top 5 Applications of Geo-Fencing in Retail

June 9th, 2017

With the advent of technology, retailers nowadays are adapting digitization to increase their loyal customer base. As mentioned in my previous blog: How Retailers are Improving Customer Engagement with Digital In Store Experiences?, improving customer engagement is a very important aspect for improving customer retention rate, which eventually leads to a wider customer base. Out of diverse ways of increasing customer engagement, one of the most important technique is geo-fencing.

Suppose a person is going by a jeans store and its nearing new year. Suddenly he receives a message on his cell phone that a discount is available on a certain brand of jeans which he likes the most. He gets into the store and buys that brand of jeans and comes out of the store. While coming out, he receives another message thanking him for his visit to the store and declaring him certain prize coupons if he visits the store again before new year. This is an application of geo-fencing in retail. Not only it is directly increasing sales, but also it is increasing the chances of a rebuy by improving customer engagement. He may receive some other personalized messages asking him to rate the services offered or asking him to provide suggestions for improving services the next time etc. There are high enough chances that this person mentioned in the example, will visit the store again before new year to avail those prize coupons.

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So now, let’s look at what is geo-fencing in retail and how it is adding value to it.

 What is geo fencing?

 Geo-fencing is a feature that uses geo location techniques like GPS, LBS etc. to define geographical boundaries. It uses coding that acts as a trigger, whenever a person crosses a certain boundary. It can be used to target customers in physical locations, thereby triggering the right campaign at right time and place.

 Geo-fencing in retail can be of two types, active and passive. Active geo-fencing requires the customers to opt in for location services. They must have a mobile app that they should keep open all the time to receive personalized messages. It is highly unlikely that a person will keep his mobile app open all the time. Hence, active geo-fencing in retail is gradually giving way to passive geo-fencing. Passive geo-fencing in retail relies more on Wi-Fi and cellular data, thereby increasing the customer reach, which helps in effective campaigning. In fact, this locally optimized approach to reach customers have almost double the click through rate of normal mobile advertising.

 Applications

As mentioned above, companies nowadays use the feature to trigger promotional events at the right time and at the right place. However, there are few other applications of geo- fencing in retail, which are listed below:

 #1 Event Management:

Geo-fencing techniques can be used to set boundaries for drones, extensively used nowadays for videography purpose, flying above the area where a promotional event is going on. It can also be used to mark no fly zones for drones, in places where they are not required.

#2 Logistics management:

Geo-fencing technologies can also be used for managing logistics and helping vehicles follow a particular route. Suppose, a delivery person deviates from his desired route and starts hovering in some other route, then immediately the dispatcher will receive automatic alert messages. The same application is leveraged by digital transportation platforms like OLA, UBER etc. to ensure safety of commuters. Hence, transportation security is improved and delays in delivery of goods can be avoided effectively.

#3 Tracking competitors:

Geo-fencing technologies help marketers in more than one way. Not only it helps in launching of events at right time and place, sending customers personalized coupons in the vicinity of the shop etc. but also, it helps marketers keep an eye on their competitors. A retailer can check the footfalls of their competitors if they have the locations geo-fenced. In this way, they can have an estimate of their competitor’s sales figure and plan their strategy accordingly. A retailer can also check the results of any promotional events that its competitor undertook with the help of geo fencing. Hence, as we can see, a retailer can keep an eye on each and every move of its competitors with the help of geo-fencing. A retailer has to mention them in its privacy policy that they are geo- fencing not only in their own area, but also in other locations not related to their business.

#4 In store automation:

Geo-fencing can be used as an important artificial intelligence tool for providing optimum in store experience for customers. Suppose a customer enters a shop or a trial room carrying his/her smart phone. Automatically his/her location will be detected and the ACs will get turned on. When the customer leaves the shop premises or the trial room, then again, the ACs will get turned off. Hence, it helps in providing better in store experience for customers as well as saves electricity for the shop owner.

#5 Asset Management:

It can be used to track customers within the store as well. Suppose a customer visits a show room of any four-wheeler and asks for a test drive. Geo location techniques enable the seller to keep an eye on the customer as alert messages are sent as soon as the customer crosses certain radius limit.

Similarly, in some high-end retail outlets beacons are placed not only to keep an eye on customers but also, to guide customers to targeted section of products by sending them messages on their cell phones. Beacons use Bluetooth technology, thus having a smaller range of action.

Hence, we can see that geo-fencing technologies are adding value to modern businesses in more than one way. Increasingly retailers are adopting to this new and emerging technology for a wide range of applications as mentioned above.

 If you have any queries on geo-fencing, please reach out to us at business@altencalsoftlabs.com


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