Many cynics over the past few years have declared the death of all things bricks and morter in retail. True, we witnessed a decline in physical retail with the introduction and uptake of ecommerce, but it is far from the end. Instead we need to look at how consumer behaviour has changed as a result, and the evolution of the high street as it begins to connect the physical and virtual user experiences.

Following on from Tuesday's blog on location based marketing, which introduced the innovational new Apple technology iBeacon, this article will look at another technology that is allowing businesses to tap into the vast geotargeting potential available in the modern marketing mix, namely 'geofencing'.

What is geofencing?

Pinpointing an area, setting a desired radius (also known as creating a virtual fence) and sending messages to devices within the fence is the art of geofencing. Similar to iBeacon, geofencing is used to enhance the customer experience whilst driving business benefits too. The USP - target all devices with the app installed, not restrictive to owners of Apple devices.

Among the recent successes with geofencing technology are Best Western and Volkswagen. As research has shown, hotel bookings tend to occur only a few hours in advance of arrival, in a bid to increase traveller interest levels and encourage bookings, Best Western implemented location based mobile marketing through geofencing technology.

Pinpointing their hotels in Washington, Best Western created a nearby virtual fence including airports, train stations and tactfully, rival hotels in the hope of encouraging customers to select a Best Western hotel instead. Passers by with the Best Western app installed on their mobile device would receive push notifications of the nearest Best Western hotel and latest promotions and if interested, the customer will be redirected to a smartphone optimised website to facilitate and finalise the booking process. After implementation, Best Western received a 0.95% CTR - excellent in comparison to the industry average of 0.2% - 0.8%.

Volkswagen has also utilised geofencing technology to raise awareness of important issues - the dangers of using a mobile phone while driving. Before the commencement of a movie in a Hong Kong cinema, a video advertisement of a driver on a country road was played. Halfway through this video, when their location had been established, many of the cinema goers received a push notification to their device. Whilst the audience glanced down at their mobiles, the car in the ad careers of the road and crashes into a tree resulting in a shaken up audience. Although not the direct marketing of a product or service, this is an excellent way to raise awareness of important issues whilst reaffirming the Volkswagen brand image of safety, security and conscientious driving.

Cost effective measures

Although a worthwhile investment, iBeacon and geofencing technology may not be justifiable for smaller businesses and public sector organisations. However, there are other technologies out there offering location based marketing messages to be sent to users without the need for app download. iSIGN focuses on the value of location aware services and the added benefits such as data collection, processing and analytics. iSIGN technology discovers mobile devices within a specified radius delivering targeted and timely messages to individuals of relevance. Using Bluetooth and WiFi, no action is required from the user, thus, low business costs and an enhanced user experience - win, win!

Location based marketing presents the unique opportunity for businesses to personalise marketing messages for individuals in real-time, in context and when they are most susceptible to such messages. As consumers we receive more relevant and timely communications and offers, meaning we are more likely to convert and engage with the brand in question.

The retail environment is changing and smart retailers are changing with it!