News Feature | July 28, 2015

Geofencing Can Be A Valuable Tool For Retailers

Christine Kern

By Christine Kern, contributing writer


How Geofencing works to help retailers make sales

An SMS geofencing campaign is a powerful used in local marketing to attract customers to your brick-and-mortar store with close proximity tracking.  For many years the idea of leveraging mobile and customer proximity to their favorite stores was tested, and according to a 2013 customer experience study by comScore, 47 percent of shoppers surveyed said they’d be more likely to shop with a retailer if they offered promotions to their smartphones when they’re nearby.

And as David McBee reported, BIzrate found that 85 percent of consumers have developed a neutral or positive outlook towards targeted display ads, which are based on our “digital breadcrumb trail.”

But despite the proven success of geofencing, many retailers have not leveraged the power of geofencing to increase their sales.

Using the global positioning system (GPS) or radio frequency identification (RFID, geofencing allows marketers to identify shoppers’  locations and tailor texts, emails, and even the ads accordingly. That means that special offers or announcements can be pushed directly to prospective customers when they are at or near a  particular location.

One retailer that has jumped on the geofencing bandwagon recently is video game retailer GameStop, which began piloting geofencing and beacons in 36 stores in Q2 2015 to reach customers in-store and nearby via their smartphones.

Thumbvista is one company that offers geofencing services, including geotargeted mobile banner ads and text message deals triggered by geofencing. Retailers can geofence particular geographic areas like their competition, special events and venues, fringe industries where your customers shop, entertainment venues, and sporting events.

AutoMotion is a dealership app vendor that has offered geofencing services to dealer subscribers as  a defensive tool to win customers away from competitors.

Big retailers, like Target, often employ geofencing as a key strategy, while only about 10 percent of auto dealers use it, according to BreAnna Fisher, vice president of business development at AutoMotion. While there are any number of applications for a geofence, it presents a big opportunity for retailers looking to drive traffic to brick-and-mortar stores in high traffic areas.

That suggests that the market for geofencing is ripe for the picking.  Brun told Auto News that since using geofencing in New Hampshire in November, his store has sent notifications to more than 500 residents who visited the website looking for inventory or service. 

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