If you could choose any channel to target consumers in today’s digital environment, which would you pick? If you said mobile, then you’re like a majority of innovative businesses out there who realize that mobile devices and smartphones are the next great frontier in digital advertising. Thanks to the always-on digital culture, the use of GPS and location-based marketing services is on the rise. 30% of the international population is using location services, and a whopping 80% of them actually want to receive location-specific alerts from businesses. Potential customers are already telling us they want customization and personalization through mobile and adding the geofencing layer helps to capture consumers’ attention at just the right moment in the customer journey or sales lifecycle.

One of the easiest and most effective ways for businesses to take advantage of this new technology is through geofencing. In this article, we’ll take a look at how geofencing works and dive into 3 practical ways retailers can use geofencing to increase sales.

What is geofencing?

At the basic level, geofencing is a way for businesses to leverage GPS, WiFi, or cellular data to trigger an action when a device enters a virtual boundary, otherwise known as a geofence. These actions can be as varied as the organizations that use them: push notifications, targeted ads, text messages, and more. Think about geotags on popular social media sites like Snapchat and Instagram. These are examples of triggered actions within specific geofences.

For corporations, geofencing is a great way to engage and communicate with customers and audiences on a personal level. In-store promotions, targeted ads at a tradeshow, and welcome text messages inside an office are all examples of corporate geofencing. Here are three real-world ways retailers can take advantage of geofencing to increase sales and drive customer loyalty:

1. Personalized coupon codes for in-store consumers

One of the best applications of geofencing is to target your own stores. Create a boundary around your location and then when consumers come within range, send them a personalized text message with a promo code. If you want to reach consumers that aren’t currently in your database, you can set up targeted social media ads on Instagram or Facebook to drive traffic. This is a great way to attract new consumers that might not have shopped at your brand before.

2. Automated digital ads outside competing stores

Innovative retailers can take geofencing a step further and target locations outside or around a competing retailer location. If your competitor sells t-shirts, for example, send out an ad for two-for-one t-shirts at your location. This way, you can drive more business to your store. In this situation, a targeted email or text message would work well, since you can add a personal message like “Looking for t-shirts? We have you covered!” Geofencing is all about delivering a personal touch to consumer/retailer engagement, so the more personalized the messaging the better.

3. Targeted deals and promotions based on customer data

This final solution is the perfect way to attract repeat customers and increase brand loyalty. As a modern retailer, you have a CRM solution full of customer data, including their shopping preferences and contact information. When a returning customer comes within your geofence, send them a highly targeted email with a personalized discount on some of their favorite items. A sample text could be “Hi Kevin! All our t-shirts are on sale today, and we’re giving you an extra 10% off. Show this text to your cashier at checkout.” It’s easy, personalized, and to the point. Plus, it will get consumers coming back.

How to create and maintain a geofence
Developing a geofence requires a back-end administrator to actually draw the geofence and set up the triggered actions. Customers must opt-in to location services for a geofence, and there are plenty of creative ways your team can set up triggered actions. If you want to get started with geofencing but don’t know where to start, the team at Bluewater can help. Talk to one of our experts today to see what your best options include.

Jonathan Welzel

Author Jonathan Welzel

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