Discounts Seeking Shoppers

Consider the saying, “location is everything.” That was especially true when the site of a retailer’s brick-and-mortar store could mean the difference between success and failure: With a nice corner lot on Main Street, just next to the post office, it was ensured to catch the eye of many a passersby.

Today, although the context may have changed, the adage still rings true. With the advent of location-based technology like beacons and always-connected smartphones, retailers now have an entirely new frontier for connecting with consumers wherever they are.

The recession of 2008 left many consumers with a higher level of price sensitivity. A consumer report released by Retail Touchpoints in 2014 showed that 80 percent of shoppers are consistently look for “deals” while they shop. By comparison, millennials actually seem more price-sensitive than their older counterparts, with 92 percent saying they use coupons as shopping list inspiration, and 51 percent saying their coupon usage has increased over the past year.

Those are some compelling numbers. Taken into account with emerging smartphone technology that makes it possible for a consumer to compare prices and find the best deal from the device right in his or her pocket, they present for retailers a new set of challenges for retailers — but also a big opportunity.

Unlike traditional channels like televisions or even desktop computers, mobile devices give brands the opportunity to engage with customers and potential customers one-on-one, creating unique shopping experiences and learning about their preferences over time. Location-based technology is a great tool in building a more comprehensive view of a customer beyond what they buy, to include how they shop and what compels them to return.

“Mobile provides this bridge between where people go in the world and their in-home profiles,” Duncan McCall, CEO of PlaceIQ, recently told Mobile Commerce Daily. “That’s a really powerful concept when you start thinking about it.”

By using data pulled from in-store networks and geo-fencing (which uses GPS technology to set boundaries within a given environment), retailers can now track foot traffic, repeat visits, time spent in specific sections within the store — browsing in the sweater or baby aisle, for example — and even if a customer spends time in the dressing room during their visit. This level of insight into how shoppers browse is extremely valuable to retailers, provided they are set up to take advantage of it.

With that information, retailers can also take a bite out of comparative shopping, which has become the norm at the physical point of sale with an estimated 75 percent of shoppers using their devices to search for better deals nearby. Location-based technology makes it easier than ever for retailers to connect shoppers with products or discounts that resonate with them specifically: Imagine pinging that customer from the sweater aisle with a special $10 coupon or two-for-one sweater offer. With the right systems in place to take advantage of the data at their disposal, retailers now have new ways to grab shoppers’ attention away from competitors’ sites and back to the in-store experience.

Location-based technology can also help to create partnership opportunities between brands, not just spurn competition. Amit Shah, VP of online, mobile and social at 1-800-Flowers, recently shared details around a successful partnership involving setting up geo-fencing around jewelry stores in proximity to their florist locations. “Figure out what situation [customers] are in and attack that context,” he remarked.

Promotions and offers are just one of the ways brands are taking advantage of this new location-based technology. Looking beyond the in-store experience, location-based technology gives retailers the ability to dial their geo-targeting up or down, so it’s possible to connect with someone who has visited a store and is now in a specific city or neighborhood at any given moment. This use of location technology is great for flash sales or in-store special events.

Brands large and small are getting in on the action, and reporting great results for their location-based mobile campaigns. According to Kissmetrics, Pinkberry launched a campaign in 2014 serving ads to mobile users within a one-mile radius of its locations using xAd’s SmartFencing technology, which combines location signals with real-time mobile search behaviors, doubling the brand’s mobile ad performance within just two weeks of launching the campaign. And when Microsoft was unveiling its 100th retail store, it used a 10-mile geo-fence around 75 locations to serve up different targeted ad sets. The ads drove an 89 percent lift in store visits from targeted shoppers compared to a control group of un-targeted consumers in the same geographic area.

Those kinds of results are compelling, and provide just a taste of what the future could hold for the efficacy of location-based campaigns. With emerging location-based technologies come some challenges, specifically as consumers adjust. A 2014 report by Hipcricket showed that, of over 1,200 consumers surveyed, 52 percent said these types of behaviorally-triggered messages felt “intrusive or spammy,” while 46 percent said they were not relevant to their needs, and 33 percent said that the message didn’t offer any value at all.

This makes the need for brands to not just invest in the technology needed to pull off these types of campaigns, but also invest the time it takes to get them right — so they are relevant and seen as highly valuable, thus warranting the potential interruption. If done wrong, location-based targeting can easily have a “big brother is watching” effect, which is counterproductive to retailers’ goals of forming solid customer relationships.

In that sense, location is still everything for retailers…but it’s never been more important that shoppers be allowed to find it on their own, to some degree.



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.