Crash Course to Location-based Marketing Technology


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Guide: Crash Course to Location-based Marketing Technology

Information is clouded up more than ever before and customers are increasingly doing shopping-related activities on the go.

While online retailers are definitely taking advantage of this drift, brick-and-mortar stores are not far behind. Brick-and-mortar store owners are also becoming adept at modern technology to reclaim sales they’ve lost to e-commerce.

In addition to using traditional marketing tactics online and offline, offline retailers are also taking advantage of GPS technologies such as beacon, geo-targeting and geo-fencing who give customers what they want, when and where they want it.

Through this article, I will shed some light on what these technologies are, the challenges associated with them, and how they will grow over time to help retailers make better use of them.

Target customers based on location and timing

Advanced location-based mobile Marketing technologies allow retailers to dig deeper into their customers’ psychology to earn their loyalty by going on that sweet spot.

So far, the adoption rate among retailers has been gradual, but with the emergence of m-Commerce in recent times, a massive increase in adoption is expected.

Let’s start by understanding what these technologies are and how they work.

1. Geographic targeting

Geographic targeting allows companies to send a tailored message to customers from a specific geographic area

It is crucial to consider people from different locations with different interests and needs. Online and large offline retailers with points of sale in different locations are already using this technology better customer focus

Small brick-and-mortar retailers can take advantage of this by using it to better understand local demographics.

For example, a sportswear store in Manchester can better tailor its offers and online promotions by first knowing where most of the United and City fans live.

2. Geo-fencing

Using this technology, offline retailers can set up a virtual perimeter around their stores so that when opt-in customers (those who have installed the store’s app) enter that area, it will send a message on their mobile devices about the offer of the day and other relevant information.


For example, if you are about to walk into your regular coffee shop, you will receive a good morning message on your smartphone with a special offer for a particular snack on offer that day.

As a customer, you could choose that snack because you have been informed about it, even if you did not initially intend to.

3. Beacon

The most recent entrant to this list, the beacon technology was introduced by Apple in 2013 with the release of iBeacon

Google also launched Eddystone beacons for Android and others in mid-2015 mobile platforms. Beacons are low power Bluetooth devices that retailers can install in their stores to reach customers with high accuracy, at specific micro locations: aisle by aisle, store entrance and exit.


Beacons work with specific apps installed on the customer’s smartphone, tablet or smartwatch and trigger specific messages or actions as they pass a particular micro-location in the store

For example, if you walk past a particular product, you will receive a push notification about an offer for that product, or if a customer leaves the store, payment will be made automatically through a pre-selected payment channel, and so on.

These advanced technologies certainly take mobile marketing to a whole new level. By removing friction from interacting with the customer, they empower store owners to give customers a very personalized shopping experience

We have seen an example of this, albeit purely theatrically, in Steven Spielberg’s Minority Report from 2002.

In the film, this is done via a retinal scan instead of identification via an app on your smartphone.


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The cons

Despite the allure of the idea, this opportunity comes with a handful of significant challenges.

Privacy concerns

These technologies provide customers with seamless interaction and convenience. But it is done at the expense of customer privacy

A technology that is activated based on the proximity of a customer, and if that information is stored in a retailer’s analytics application, store owners could potentially further target them with this data, for unrelated cases


In the example of the coffee shop scenario, if the customer just rushes past the store instead of entering it, receiving a notification about the coffee shop’s offer could cause annoyance.

This can of course be prevented by turning off the app, but only having the customer do something repeatedly causes even more annoyance

Shortage of data

These technologies have been around for a long time, but are still in a somewhat nascent stage.

There still are no well-defined patterns for exactly how customers behave towards these digital interactions in the store. So for some retailers it may seem like a gamble to invest in it at this stage.

Battery draining

Beacon is built on energy-efficient Bluetooth technologyImprovements it has gone through in recent years has also significantly reduced the battery consumption problem.

But on the ground, since spending a few hours in grocery stores is normal for shoppers, it may be necessary dealing with battery drain if they want to keep their Bluetooth on for that period as well.

Native app requirement

Another big challenge with this mobile marketing technologies is that require customers to install specific apps to associate with them.

This may be more feasible for large retailers such as Walmart, Sears and Target, while smaller retailers may be using them to engage only their most loyal customers.

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What does the future hold?

Despite these challenges, the future of these technologies looks hopeful. After all, nothing is more desirable for customers than to know interesting offers without even having to search for them.

In fact, one study said about that 70% of people find location-based push notifications usefulThese technologies also increase app usage about twice, and so does gives retailers more time to commit their customers.

Several other studies also suggest that these technologies will be widely accepted in the near future. According to MediaPost, 46% of US retailers used beacon technology in 2015 (up of 15% in 2014). And about 71% of them were able to understand customer buying patterns.

Business Insider has also estimated that in 2016, beacon-based technologies will generate approximately $ 44 billion in revenue for major retailers in the US alone, 10 times more than in 2015.

Beyond these numbers, the growing trend of the internet of things (IoT) and the idea that gadgets talk to gadgets will also work in favor of these location-based marketing technologies (since that’s essentially exactly what they do).

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So we have established that beacon, geo-targeting and geo-fencing have substantial long-term potential and will grow remarkably in the time to come (especially in more mobile-oriented countries).

But on the other hand, the challenges that come with it also clearly indicate that they need further improvements for easier implementation, more accurate targeting, and a better customer experience.

How long it takes for them to become mainstream depends entirely on how quickly these improvements take place. However, the most important thing for retailers at this stage is to adopt and use these location-based marketing techniques and build on them as the need arises in the marketplace.

What is your take on the use of location-based marketing? Share with yous.

Editor’s Note: This post was written by Manish Bhalla for Manish is the founder and CEO of FATbit Technologies, a web agency that builds advanced e-commerce solutions for startups. Manish advises companies on technology, online marketing tactics and helps startups formulate the right strategy for their individual needs.

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Crash Course to Location-based Marketing Technology: benefits

  • The Crash Course to Location-based Marketing Technology tutorial is free .
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