• by Ray Pun , May 16, 2014

Stalkers don’t announce their presence, but smart marketers do. Marketers have been trained to think like snipers: hit the bulls eye. Target the right segment of consumers, the more accurate, the better, right? We’ve been trained to think that the closer we can get to the customer, the more we can get inside of their heads, the better our brand marketing, the more conversions we can create, and the higher the ROI. 

“To track or not to track?” That is the question. With geolocation becoming more popular and invasive, how can organizations strike the right balance between stalking and smart marketing when it comes to reaching audiences across mobile devices? 

Geolocation is basically targeting customer communications based on their whereabouts in the world. Targeting can be done by country, state, city, zip code, or GPS location. Targeting moves in concentric circles with GPS location being the most specific or granular – the center of the bulls eye, if you will. Today, there continues to be a lot of talk and controversy surrounding geolocation, its practices and principles. For organizations, do the benefits of using geolocation outweigh the costs? Hopefully this article will help demystify the fear factor and get marketers thinking more deeply about how to apply geolocation to organizational mobile and digital channel strategies. 

Meet the Social Oversharers and Privacy Phobics 

Some people tend to share too much online, especially via social networks.  We all have friends who share every waking moment of their lives in great detail on Facebook, Twitter or Instagram. They’re generally carefree about their digital presence – or who I refer to as “Social Oversharers.” These people have no problem with geolocation targeting.  They recognize that marketers are focused on selling a product or service, and therefore don’t fault organizations that use all means – including geolocation targeting – to market to their customers. 

On the opposite end of the spectrum are customers concerned about the notion of digital measurement, finding it to be an invasion of privacy and/or equivalent to stalking. I call this category of people the “Privacy Phobics.” They guard their information and their privacy like gold. They’re hesitant to share information or to be “tracked” by organizations. Even if it is a very small percentage of customers who feel this way, is it wise for organizations to run the risk of being labeled stalkers or alienating a group of loyal customers? 

Use of Geolocation Inside Brick-and-Mortar Stores 

People “on-the-go” versus people inside of brick-and-mortar stores present different use cases for geolocation. Several methods and marketing strategies for in-door location are currently being developed and are in the early adoption stage. That being said, “The Location-Based Marketing Playbook” cites some great examples of in-store engagement. These include: Shopping assistance, customer service, awareness building, personal shopper notification, fulfillment notifications, among others. 

Learning from Nordstrom: An Early Adopter of Geolocation 

In the digital world, retailers use behavioral data to optimize shopping funnels in a website or mobile app.  Optimization is a proven method to increase the conversion rate and average order value of the digital store.  In the physical world, retailers also seek data about shoppers in order to optimize store layouts so that the most popular items are presented to consumers.  

We should always thank the early adopters of a new technology for blazing the trail. Early in 2013, Nordstrom came under fire for using an in-store Wi-Fi geolocation tracking service. With the data collected, Nordstrom could analyze a customer’s whereabouts within their stores and use that information to “increase staffing during certain high-traffic times or change the layout of a department.”  Unfortunately, some customers were “creeped out” that the retailer was tracking their movement within the store. 

For retailers, the analysis of customer dwell time within sections of a store can provide optimization opportunities for matching inventory to what shoppers are seeking. Imagine standing within the men’s suits area and receiving a text (SMS or push notification) with a suit-related offer. Would that tempt you to buy? Or would that make you feel like you’re being watched by some “eye” in the sky? How effective would that marketing strategy be in turning browsers into buyers? 

With Geolocation, Always Announce Your Presence 

Thanks to Nordstrom and others, we now know that it’s always best to disclose our need as marketers to measure customer behavior in order to improve shopping experiences. Stalkers don’t announce their presence. They’re silent and sneaky with their activities hidden. Therefore, forward thinking companies that respect consumer privacy make sure that clear disclosure is provided upfront to avoid the stalker-factor.  Be up front about what you’re doing, what data you are collecting, and give customers in your stores the chance to opt-in or out.  

As a general rule of thumb when it comes to privacy agreements and data collection, to quote a colleague, “Say what you do, do what you say and keep it simple.”  First, companies should always disclose what data they are collecting from digital channels and how they are using the data to support goals such as personalization and optimization of experiences.  Second, marketers, product managers and engineers need to follow through and ensure they are doing exactly what they claim in the privacy agreement when building apps and websites.  Finally, the language of the agreement should be written in simple terms that most consumers will easily understand instead of legalese. 

Home Depot – Using Geolocation to Be Helpful, Not Creepy

If you don’t visit a retail store every week, many consumers forget about the store layout and where to find items of interest.  You know the feeling:  you have your cart, your list of items and off you go into what feels like the great unknown without a map.  Home Depot provides a best practice for geolocation use. Customers are happy to inform Home Depot of their whereabouts. Why? Well, for one thing, customers are oftentimes lost in a large store that could be up to 150,000 square feet in size. 

Secondly, Home Depot provides something that’s actually useful to the customer. Its mobile apps help customers locate their shopping list items quickly and efficiently. How? Once a customer enters a store and launches the Home Depot app, the app uses GPS (assuming location services are turned on) to provide a store-specific menu that helps you find items within the store. You can view detailed store maps to help you find your way to what you need. Additionally, you can tap on the aisle location of a product and see that item plotted on a map. 

Ultimately, geolocation makes customers’ shopping experiences more enjoyable – something the perpetually connected consumer expects from mobile marketers. 

Office Depot and its New 'Geofence' 

Retailers with physical stores are constantly seeking ways to bring customers into one of their locations.  However, they need to provide the right incentives to mobile shoppers especially when other options exist.  Since we’re talking about depots and fences, let’s look now at what Office Depot is doing by creating a “geofence” around its store. 

According to the Mobile Marketing Association’s “Location Terminology Guide,” the practice of geofencing “identifies a point of interest on a map and establishes a radius around it for targeting purposes. 

For Office Depot, the points of interest are its physical stores. When a customer with the Office Depot app launches the app within a specific “fenced in” area (e.g., a 100 meter radius around the store), they will receive exclusive mobile coupons that can be redeemed in-store. What better reason for a customer to engage than the promise of a discount or deal? 

Today’s Smart Marketers Are Location Aware 

Just as a realtor touts, “Location, location, location” as the ultimate selling point for real estate, today’s savviest marketers must use mobile technology with location capabilities to “sell, sell, sell.” After all, mobile engage­ment sup­ports a pos­i­tive ongo­ing cus­tomer expe­ri­ence life­cy­cle any ­time and anywhere.