Geo-based marketing opens many new doors for retailers

Location-based mobile communications has become an important method for retail stores to engage, retain, and draw consumers to stores.

For the Sears and Kmart brands, Sears Holdings has developed mobile websites, a number of consumer-facing apps, QR code offerings, and deals of the day. These efforts encourage social sharing and leverage a GPS and zip code locator in order to meet its customers' needs and drive traffic to its retail locations.

Meeting many needs
"Web and mobile technology enable more options that fit different customers' needs and lifestyles," says Tom Aiello, divisional VP at Sears Holdings.

Sears customers can use mobile devices to access ads and deals of the day, receive notifications on price point, share and vote on purchases through social media sites, and scan QR codes to receive detailed product information, reviews, and videos.

The Sears and Kmart mobile apps have built-in GPS and zip code locators that help connect consumers with targeted information about the stores in their area.

"For those traveling to different cities, they can use this feature to find deals in different areas and compare prices," explains Aiello.

Perhaps the most common use of location-based marketing by retail brands aiming to connect with consumers are deals offered via services such as Foursquare, Gowalla, Facebook Places, Google Offers, and Google Places.

"Location-based marketing offers an excellent opportunity for brands to get a right time/ right place message to consumers," says Julie Renwick, executive director of mobile for North America at Ogilvy.

She adds that geo-sensing offers a perfect opportunity to bring nearby consumers right to the store's doors to make a purchase, particularly when combined with physical signage that alerts the less tech-savvy consumers to mobile offers.

"Those two elements together are creating a lot of excitement and effort from brands to get their messages into the mobile channel," says Renwick, who believes mobile location-based communications will be a huge area of growth in 2012.

Geo-sensing, she explains, will become more popular; the coupon space will continue to grow; and consumers will be more open to receiving mobile offers and using their phones to make purchases.

"Because of that," notes Renwick, "we will see a lot more activity for messages being sent and redeemed on the phone."

Tom Biro, VP in the Seattle office of Allison & Partners, says brands are increasingly becoming active in the space as they realize the barrier to entry is relatively low and that the space allows for experimentation to see what works best for consumer interaction.

"Simplicity is the beauty in it," he suggests. "Part of that is just claiming your location in the first place on the two or three services you think make the most sense."

Facebook may be one reason more consumers have gotten on board with location-based services and are more likely to use them in everyday life, such as when going to retail locations or food and beverage stores.

"It's not just a bunch of outliers using these services anymore," notes Biro. "You have a little bit more of a mainstream audience. That's something Facebook is very responsible for."

Additional benefits
Along with offering deals, some brands are using location-based services to do tie-ins with their loyalty programs or are attaching charity tie-ins to each consumer purchase.

"Most services have enough people using them, especially in major markets, that you could get a couple hundred check-ins," says Biro. "For donations, it's an interesting mechanism."

He also believes location-based communications will continue to grow as more consumers and brands get on board.

"The more people playing in the sandbox," says Biro, "the more buzz it gets."