Will Geo-Fencing Move the Needle for Brick-and-Mortar Stores?

2014 is going to be an exciting year for brands and retailers. With several technologies for improving customer experience flooding the market, there is so much that a business can do to improve sales and loyalty. One of these technologies is geo-fencing. While it shutterstock_140618629offers many possibilities in terms of delivering product offers to consumers at just the right time, it also runs the risk of crossing the line of privacy and turning consumers off altogether.

So what exactly is a geo-fence? It is a virtual perimeter for a real-world geographic area. In terms of its relevance for brands and retailers, we can think of it as an area drawn around a particular physical store based on a given radius. Whenever a location-aware device enters that zone (e.g. customer with a smartphone), that customer will be sent notifications about product offers or coupons that the store is offering. Businesses can augment this technology with their existing consumer data and customize to whatever level they want by providing hyper-personalized and hyper-local offers based on the particular consumer’s shopping profile.

It is an excellent method of engaging consumers and grabbing their attention as soon as they are in the parking lot. If they see your offer first, it can entice them and keep them from going into any other store. On the other hand, what if a customer is put off by the fact that they have been bombarded with offers that they didn’t ask for and feel it is an intrusion of privacy? This issue was widely discussed at NRF 2014 with the focus being on what qualifies as “creepy”. You don’t want your customers to feel stalked. You want them to feel nurtured by providing them with relevant product offers. You want to build a trusting relationship.

One solution to this problem is having customers opt into the program. Customers are always open to sharing information if it means that they have a more satisfying and personalized shopping experience. Another important aspect to keep in mind is to make sure that you are offering a seamless experience across all channels. So, brands and retailers must have deep and comprehensive information about their products – whether it is availability, assortment, promotions, or pricing – so that they can make the right offer to the right customer at the right time. If implemented in the appropriate manner, geo-fencing can be just the shot in the arm that brick and mortar stores need.

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