Best of 2012: Retailers Employ Geo-​fencing and Hyper-​local Marketing to Stop Showrooming Trend

Today’s shoppers appear content to browse websites and order everything from shoes to books without ever leaving home. But there are also consumers who are frustrated by the poorly fitting shoes they ordered online and consumers who are just wandering by a bricks and mortar store. It is these shoppers that retailers hope to reach with their geo-​fencing strategies.

Traditional retailers first saw their customer base erode when online competitors began offering free shipping. The wave of defections has increased as consumers realize they can now visit traditional stores to view or try on a product in person but then go online to purchase the item, often at a better price. This trend has left retailers struggling to find new ways to attract shoppers who will actually buy a product from them.

One idea is to court shoppers who will give in to impulse buying. The appetite for products is being generated by geo-​fencing – the term used to describe how retailers are texting shoppers who have opted-​in to receive these promotional pitches and who are in the physical area of the store. The geo-​fencing concept relies heavily on the idea that consumers will use their smartphones in this way. While up to 15% of consumers are now turning to their phones to compare prices while they are shopping, far fewer are engaged enough to check for in-​store promotions during a general shopping trip.

Many retailers, ranging from Maurice’s to North Face, discussed in a recent Wall Street Journal article, say the going has been slow so far but they definitely believe his strategy can work. The key is to get consumers to sign up for the program at first and to then respond to the 2 or 3 messages they may receive on a monthly basis.

Other retailers are not relying just on impulse buys. Stores which sell frequently purchased items like food can text coupons to mobile phones.  In this case, the text messages may be sent every time a shopper enters a store – if the app is launched.

We should expect to see continued marketing creativity on the part of traditional retailers who need effective ways to compete against online retailers.

[Source: Mattioli, Dana and Bustillo, Miguel. Can Texting Save Stores? Onlinewsj​.com. 8 May 2012. Web. 16 May 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.