3 Ways to Use Location to Increase Sales
For decades, cracking the customer-behavior code has been a challenging goal for marketers. Previously, most brands relied on popular brand-funnel models: They interpreted consumer behavior as a straight path from discovering a product to deciding to buy and to eventually becoming loyal to that product.
But some, such as consulting firm McKinsey & Company, recently started to see that consumer behavior was more nuanced. Its model describes the consumer path as a “series of loops” rather than a linear progression. However, mobile technology has effectively killed the marketing funnel and made a consumer’s location more important than ever.
A marketer’s job is no longer to simply run campaigns to move shoppers through various stages until they make purchases. It isn’t even as simple as the more complicated McKinsey model. Mobile has permanently fragmented consumer behavior into hundreds of short, fleeting and intent-driven moments.
While it might seem that the arrival of Internet and mobile technology would allow consumer behavior to transcend physical location, the Internet is still shaped by the physical world.
Factors such as nearby stores, local sales taxes and even influential neighbors affect online purchases. Even though consumers’ neighbors aren’t with them when they buy, they still behave similarly to those around them. With this in mind, marketers need to use location to shape their campaigns.
Tailor Digital Content to Location
Marketers can use different methods for employing location data to reach consumers. Using location is more than just collecting information on where consumers live and how they behave: Brands can use these techniques to drives leads and sales and to promote brand loyalty.
Use these three tactics to target your marketing efforts on the basis of location:
- Weather-based content triggers. Weather has a big impact on sales in a local area. Clothing companies can use weather to show winter coats to shoppers in New Hampshire and spring lines to shoppers in Southern California. The beer company Molson experimented with weather-specific ads and found that their engagement was higher — and the cost-per-click rate 67 percent lower — than for generic ads. Many brands send exclusively promotional offers to their customers. However, allergy sufferers who sign up for emails from Claritin also receive daily forecasts on their areas’ pollen levels and other information about potential triggers and symptoms. Claritin also has the highest brand loyalty of any allergy medication.
- Location as demographics. Smartphones have added to the challenge of understanding who the “average” consumer is, but location history can be used to target more specific audiences. This information allows marketers and ad platforms to consolidate consumers into audience segments. While location-based targeting has overtaken real-time location targeting, the two can also be combined to create a more personalized campaign. McDonald’s has used this method to endear itself to customers in certain locations. It has revamped its national marketing campaigns to take a more localized approach. For example, it created promotional offers related to the Chicago Bears for consumers in that market. It also used location data in Phoenix, allowing the company to understand that it was important to merge its English and Spanish advertising to direct customers to the nearest location.
- Proximity-based calls to action. Because most people already use their smartphones to get information related to their locations, 72 percent of consumers say they respond to calls to action they receive if they are near the retailer’s location. For example, Elle has used beacon technology to give alerts to customers on the basis of their locations. Consumers receive alerts from Elle that endorse something in a store near them, and they can then go to that store to receive an offer. Ice cream retailer Graeter’s tailors the content on its homepage to a visitor’s proximity. When customers are near a Graeter’s shop, they receive a prompt to visit the store. If a customer is far away, the call to action directs them to a grocery store that sells the ice cream. If customers are even farther away, they receive prompts to order ice cream online. Graeter’s has seen tremendous growth due to an increase in click-through rates and foot traffic in their stores.
It’s important to note that these methods, while effective, might not lead to immediate sales. They are a response to a fundamental change in customer expectations. “Immediate conversion” may not even be realistic because there is no longer a clearly defined shopping stage. Marketers should instead worry more about a customer’s lifetime value, especially in a mobile world.
Location’s Impact on Sales and Leads
Shopping can take place anywhere and anytime, and using location-driven marketing can unite digital and real locations. Menswear retailer Bonobos has fundamentally connected digital location by opening physical stores known as “guideshops” to drive digital sales. There, customers can try on merchandise and then place online orders. Online sales are still the biggest portion of the business, but the guideshops have contributed to a greater influx of new costumers.
Anthony Nicalo is the VP Platform at Mobify, a mobile customer-engagement platform that facilitates all of a retailer’s real-time interactions with its mobile customers in one place. Nicalo guides and grows the platform capabilities for serving mobile marketing and extends the platform ecosystem through partnerships. Nicalo is a thought leader in digital marketing, an expert in omnichannel commerce, and a frequent presenter on the future of commerce, mobile retailing, and shopper marketing, including at Shopper Marketing Expo, iMedia Summits and Kantar Retail.