Proximity marketing has seemed to be the next "big thing" in digital and mobile marketing for several years running now. Over and over again, it keeps getting delayed or receiving slower growth than anticipated. Companies like Foursquare and others never achieved lift-off velocity and advertising dollars did not follow suit. However, 2018 could finally be the big year for proximity marketing as it becomes more commonplace.
Proximity marketing is the concept of advertising to consumers on their mobile phones as they come into close proximity to a store, merchant or venue. The ads can pop up on an app, the home screen, the browser or any other type of interface on the device. Text messaging is also a potential avenue.
The best thing about this form of marketing is that it drives customers into the store for spontaneous interactions and purchases. They form much deeper and long-lasting relationships with brands and buy much more from the stores that advertise to them. For this reason, there is tremendous potential for proximity marketing. It promises to be an enormous and lucrative market.
Hurdles to Implementing Proximity Marketing
However, there have been fairly high hurdles to this marketing in the past, slowing the growth of it down. Firstly, the GPS tracking had to be turned on in phones and be accurate enough (usually within a few feet) to adequately advertise to the right consumers at the right time. Secondly, consumers had to become familiar and comfortable with this type of advertising, which may seem a little intrusive at first. Lastly, they needed the right apps and software to interact with to make the advertising work.
One of the biggest reasons that 2018 could be the year for this marketing strategy is that GPS technology is becoming so much more sophisticated. The iPhone X which was one of the hottest selling phones in 2017 is equipped with much better sensors and GPS capability than previous editions. That allows stores
Phones with longer battery lives are also important. As GPS can drain power, consumers were previously not willing to put on this function. However, with longer battery lives on new phones, GPS functionality does not necessarily consume all the power within a short period of time.
Lastly, killer apps are really starting to spread throughout the population. Consumers are downloading sleek, light apps that are optimized for proximity marketing. Even those that don't download store apps often have Facebook or Google software installed on their phones. These are loaded with proximity marketing tools that make it extremely easy for companies to target consumers in the right way at the right time.
How Target Uses Location Based Marketing
Target is the second largest retailer in the US with massive stores and millions of regular customers. Target's problem is twofold. They want to get customers into the store as they walk or drive by. Secondly, they want to direct customers to the most lucrative or hot selling items that are customized to each individual.
The store decided to roll-out a sophisticated proximity marketing campaign. The firm delivers push alerts as well as in-app updates on the company app's "Target Run" mobile page. Those immediately alert the consumer to look for the store and deals that they might like.
The app helps consumers navigate those massive stores until they find the area that is most appealing to them with deals that are fit for their shopping habits. Target utilizes big data and historical shopping info to make recommendations and deliver the best deals to consumers. Additionally, it highlights items and provides promotions to encourage spontaneous purchases. This has helped Target become a leader in retail innovation and drive up revenue.
Fielday Marketing is a leading digital marketing firm. The company has helped many stores begin to innovate and acquire customers through proximity marketing campaigns. For more information, please contact us.