Both online and offline retailers gain insights into the stores consumers visit that can sharpen retargeting campaigns.

Brian Handly, May 1st, 2017

This article originally appeared on DigitalCommerce360.

The marketing departments of both online and offline retailers have made use of customer data for decades.  Location data has typically been isolated within the mobile ecosystem, and even more so inside a company’s own mobile app portfolio. This is changing and becoming a valuable tool in the marketer’s toolbelt.

Almost everyone that walks into a retail store in the United States today has a smartphone in their pocket, purse, backpack or fanny pack. According to Pew Research, 77% of Americans now own a smartphone, with 92% of 18-29 year olds owning one.

While the retail industry dabbles with using the mobile location data generated from smartphones, they haven’t fully realized the potential of this transformative technology. Most marketers use location data in retail today to trigger an immediate action when someone is in or nearby a location. The untapped opportunity comes in using location to measure the consumer path over extended periods of time.

Indeed, location data’s fundamental value is the ability to know an audience. By knowing the places they visit in the real world, retailers can improve their advertising, product recommendations, and in-store experience. Mobile expands the use cases of location data for retailers by understanding consumers before, during, and after a shopping experience.

To understand why location data matters, marketers should start with a baseline understanding of where it comes from, the types of location data available, and most importantly the use cases for location in retail.
By knowing which consumers visit a retailer’s location or their competitors’ locations, marketing teams are armed with powerful retargeting segments.

Types of Location Data

The various types of location data has been covered extensively by the Mobile Marketing Association. The essence is that accurate and precise location is best determined from a few high quality inputs. Mobile apps and mobile web browsers request permission to access location. When a person chooses to grant that permission, the app or browser then receives the lat/long coordinates of the device at the moment, or whenever the app or browser requests it.

In order to understand the actual location of the device, the operating system on the phone can use GPS signals, WiFi, cell phone triangulation, Bluetooth beacons, IP addresses, and a few other signals. Generally speaking, beacons, GPS, and WiFi provide the most accurate location data, in that order.

Sources of Location Data

The retailers that have already been leveraging location data source it from their own apps, or by working with ad networks that enable location-based advertising. The big shift happening in the industry today is that more location data is being shared, across more companies, and for new purposes.

Numerous companies like Swirl, inMarket, RetailMeNot and Shopkick forge partnerships with retailers to help them find more location sharing users across their mobile properties. This allows retailers to expand their customer knowledge outside of their own mobile audience, which may be limited, to a broader nationwide audience. Having enough scale ensures that the data is statistically significant, and therefore actionable.

Use Cases for Location Data

Up until recently, the use case was primarily during a shopping experience.  When a person enters a store, or is nearby, marketers use mobile location to serve consumers a relevant ad or real-time push notification to trigger a desired action.

There is still enormous potential to leverage in-store use of location data for both marketing and analytics, areas in which many retailers have yet to even experiment.

There’s the ability to notify consumers of offers that are worth knowing about. User interfaces of mobile apps can adapt from an e-commerce experience to an in-store experience, assisting with wayfinding, enabling mobile payments, and assisting with product reviews. By knowing someone is in a store, a retailer can also create virtual aisles where nothing is out of stock. Consumers want to see all products available, and not be limited to what can be displayed on the floor. In-store location data will also be used for asset and employee tracking increasingly over the coming years.

By expanding the use case of location data to pre- and post-shopping experiences, entirely new possibilities open up for online and offline retailers. The value lies in understanding the path of a consumer and where they go throughout the day. Traveling from home to work to retail to soccer practice to dinner is vital to knowing the customer, and represents the new opportunity of mobile location data.

The end goal with using location data sourced from pre- and post-shopping is to drive more traffic, whether that be on foot or online.  By knowing which consumers visit a retailer’s location or their competitors’ locations, marketing teams are armed with powerful retargeting segments. These audiences can be reached on mobile apps or across social media through the use of custom audience targeting.

Location data also informs the home and work location of customers. Pairing this information with existing demographic targeting criteria allows retailers to target consumers with a high propensity to visit based upon two of their most relevant locations.

Pure online retailers can also use location data to see the audiences that visit their retail peers. By knowing the consumer segments that visit the retail locations they care about, e-commerce companies can target these users to purchase their products online instead. They will be using location data for lead sourcing.

We also expect to see more marketers using location-based audience segments for mobile app customer acquisition. The concept is to target the consumers that visit retailer locations of interest. These consumers will have a high likelihood to become a mobile user given their existing affinity for the retail locations already visited, or the brands and products on display inside.

The key takeaway for retailers of all types: The blending of digital and physical measurement creates new possibilities to improve marketing messages, customer responsiveness, and foot traffic. The rise of location data holds enormous promise for those willing to experiment, revise, and adapt.