If you can’t beat them, join them. That’s why some brick-and-mortar retailers are using “geofencing” as a way to keep up with the online shopping competition.
Geofencing, the convergence of mobile and in-person shopping, is when sales or in-store promotions pop up on customers’ smartphones while they are within proximity of the physical store.
Stores and customers are approaching this new technology with cautious optimism, The Wall Street Journal reports. The article, cited by business blog The Low-Down, referenced a recent survey in which 15 percent of respondents said they use their phones in the store to compare prices online. Only 7 percent of respondents said they use the phone to get in-store promotion alerts.
Retailers hope geofencing will deter “showrooming.” That’s when a customer sees an item in the store but buys the product online for less money.
For one grocery chain, its smartphone app sends virtual coupons when the customer enters the store. The same app will also reorder items on the shopping list based on the customer’s proximity to the item, making the customer’s shopping more efficient.
Geofencing is a new way for retailers to reach out to their customers. They can blast out coupons and other promotions to the customers. But they have to walk a fine line between adding value for their customers and annoying them.
Technology can be really helpful in this area. Retailers can see who their best customers are and geofence to that group. Technology also can help retailers make sure they are well-stocked on the items they are running promotions for so that they can meet the increased demand that the specials drive.
Source: The Low-Down, May 2012