Top 4 Location-based Marketing Trends for 2016

Businesses are investing in location-based marketing strategies and location technologies to directly communicate with customers through their mobile devices. This makes for a smart choice for two primary reasons: widespread adoption of smartphones and evolution of location-based technologies. Firstly, the global smartphone penetration per capita is on a rise from 9.6 percent in 2011 to 31.3 percent in 2016. Smartphone adoption continues to reach high numbers with an estimated 2 billion consumers worldwide expected to own a smartphone this year. With an increase in adoption, the use of smartphone has also evolved over time. For instance,  8 out of 10 consumers prefer to use smartphones in-store to make a purchase decision according to a study conducted by Google.

Secondly, location-based technologies, such as iBeacon, are creating a lot of buzz given a large number of successful deployments by retailers worldwide. Retailers discovered that using beacons increased their in-store mobile app usage by 16.5 times and timely in-store messages and ads lead to 20x increase in purchase intent. It comes as no surprise then that location-based marketing is gaining traction, especially in retail.  To confirm the same, digital advertising firm MaxPoint noticed that location-targeted ads accounted for 85% of its clients’ mobile ad spend last holiday season.

Location-based marketing is gaining importance since businesses want to reach their customers on time and at the right place by using contextually relevant, personalised, and multi-dimensional marketing solutions. With multiple location-based technologies such as iBeacon technology, geofencing, NFC, and so on, at hand, retailers need to intelligently gear up for 2016. So, we bring this list of four location-based marketing trends that retailers must watch out for before making this year’s marketing strategy. Let’s start:

1) Mobile app optimisation will gain prominence

Image source: mobifireapps.com

This year, we will see businesses specially focus on integrating location-based technologies like iBeacon with their own mobile app. Consumers expect an app to be completely loaded with utmost features. Location-based technologies provide businesses with an opportunity to add exciting elements to their mobile app in order to drive business profit and provide a seamless shopping experience.

Mobile app optimisation will become a core practice with businesses aiming for engaging and relevant app functions. For instance, in retail, a retailer would include facilities like cashless checkout via a mobile app by using beacons. In fact, Juniper Research predicts the number of mobile transactions is projected to reach $3.2 Trillion by 2017. Retailers can also integrate iBeacon technology with the app to deliver contextually relevant content to consumers on time, which can in turn increase sales. According to a study by Research Now, 72% of consumers agree that receiving a relevant offer on their mobile device while shopping in-store significantly influences their chances of making a purchase.

2) Location-based technologies will gain strength on the security front

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Most businesses are a bit wary of using location-based technologies because of the security concerns surrounding them due to the amount and kind of information needed from a user. This year will see consumers win over this fear. Consumers would gain more information about how location technologies work, as businesses will be more transparent about how they will use the information collected. For instance, with beacons, one of the primary security myths has been that beacons can collect information about consumers without their permission. Contrary to this myth, beacons are incapable of tracking consumers as long as the consumers don’t enable location services on their mobile device. Moreover, users are also required to grant permission to each app before access to information. Therefore, in the case of beacons, users can control their privacy by granting or rejecting permissions to a particular app.

In addition, beacons can assist in keeping our personal items much more secure since they enable us to track any object, once attached to it. They can be used at home to track personal devices, at workplace to track employees, in inventories to track expensive equipments, and so on. For example, if a business requires asset tracking, beacons can prove to be a cost-effective solution to keep expensive assets secure.

3) Businesses will focus more on Relationship Marketing

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Relationship Marketing is going to be a major trend this year as personalized, data-driven marketing is becoming increasingly important. The crux of Relationship Marketing, as the name suggests, lies in focussing on building strong loyalty and long-term customer engagement rather than on quick and short-term customer acquisitions. Businesses can earn both loyal customers and brand advocates in this way.

Businesses will strive to build a relationship with a consumer by personalising their outreach efforts. In fact, a survey by Accenture reveals that nearly 60% of the US consumers want a more personalized shopping experience with real-time promotions and offers. Hence, personalization will be a key differentiator among brands as we move forward.

A great way to incorporate customer personalization, is to leverage iBeacon technology. Beacons help businesses collect relevant data based on consumer behaviour to personalise content keeping each consumer’s needs in mind. In retail, a brand mostly builds a relationship with a consumer by rewarding him/her via their loyalty programs for the time and money spent. Today, consumers’ decision to interact with a brand is often based on being rewarded. Retailers will now focus more on ensuring the success of loyalty programs by intertwining them with consumer preferences and needs in the coming time. 

4) Industries will witness major investment in IoT

Internet of Things (IoT) is changing the industry landscape rapidly by connecting inert devices to the internet since it gives businesses a great opportunity to customize the user experience based on his/her location. It is growing at a fast pace as is evident from Research firm IDC’s report stating that the worldwide IoT market will grow to $1.7 trillion by 2020 with a compound annual growth rate (CAGR) of 16.9 percent and the number of “IoT endpoints”, i.e. connected devices such as cars, etc, will grow from 10.3 billion in 2014 to more than 29.5 billion in 2020.

Specifically IoT in retail is expected to grow from $6 billion in 2013 to $27.5 billion in 2018, with a CAGR of 35.7 percent. Many retailers are already planning to utilize the immense data generated from IoT to boost their business not only via smarter supply chains, but also by tailoring their marketing strategy for consumers. In fact, retailers are predicted to invest $2.5 billion in IoT over the next five years, according to Juniper Research. This would include investment in hardware like beacons and RFID.

Tony Longo, co-founder and CEO of Ground Signal, a location-based technology platform, says, “We see location marketing as a huge differentiator – and it’s just the beginning.” Location-based marketing is going to be a critical component of business marketing plans this year. Businesses will have to be mindful of the above mentioned major trends to create successful location-based marketing strategies!

If you have any interesting location-based marketing trend in mind, please share them in the comments below!

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Shubhi Mittal

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