 "Connecting better")
Consider this: Rs 60,000 crore of in-store retail purchases in India are influenced by digital and for mobile the figure is Rs 50,000 crore. This number is estimated to grow significantly, with increasing penetration of smartphones (140 million-plus, and estimated to grow to 500 million by 2020) and growing internet users (300 million internet users, estimated to grow to 600 million by 2020). Conversion rates of these mobile enabled, digital-savvy shoppers are 40 per cent higher (as per Deloitte) than the non-digitally influenced shoppers. This explosive growth of smartphones is making mobile location-based services and marketing a big business opportunity, with an estimated $4.5 billion of mobile advertising in the US being location-based (rising to over $10 billion by 2017, as per Cisco). Such is the potential of location based advertising that Google has extended its geo-location ads, so far restricted to mobile adverting, to desktops.
Cut to India. Retailers are working overtime to tap the potential of this medium. Take Madura Garments, which is using location-based marketing to bring together its stores and connect them with its online portal Trendin for a seamless consumer experience. At present consumers who purchase online can return products and claim free alteration at any store in the vicinity and can also shop online and pick the purchase at any nearby store. Says Shivanandan Pare, head, e-commerce, Trendin.com, "For any location marketing to work, you need to first recognise the customer, whether it is the same customer that browsed the product online and which stores she mostly visits and at which location. You need a reference point (previous shopping history, email id, mobile number etc). For example, offers provided to Trendin mobile app users and push notifications through SMSes, have considerably bolstered our store traffic."
Now look at what Cafe Coffee Day is doing. It collects data from stores and reviews it periodically to understand which store is getting how what sort of walk-in at a particular time of the day and marries that insight with consumer demographic and personas. Each promotion is designed for a particular cluster of consumers with a specific persona, such as the way they dress, their food preferences and so on. Accordingly, boost-up activities are planned. "We use mobile for hyperlocal activities more than the web as it enables us to track down the location of the consumers before triggering off a promotion. We have our own customer data and also collect data through Cafe Moments programme. We also work with mobile agencies, where we reach out to consumers based on the apps they have downloaded and provide promotions at the app-notification level," says Bidisha Nagaraj, group president, marketing, Coffee Day.
Experts say location specific advertising works best in spontaneous categories. No wonder Cafe Coffee Day has seen high click-through rates for most of its hyper local offers on mobile phones. Evidently, location marketing is de rigueur for retailers today. Says Kumar Rajagopalan, chief executive officer, Retailers Association of India, "For retailers, it is has become extremely important to attract consumers from their targeted trading catchment. Gone are the days when retailers would ensure that they were visible in various newspapers, publications, maps or other marketing mediums available and that would be enough to reach their preferred catchment in the particular location. Now, thanks to mobile technology, retailers can enable product discovery and provide real time offers to customers, when they are in the shop's proximity. Some of the advertisements even allow customers to click and discover offerings of the retailer via video, catalogues and other rich content forms."
In short, the idea is not just to bring the footfall to the store, but also to take the store to the customer. Nagraj says data connectivity has today become hygiene as opposed to five years back when a marketing programme had to be designed in a way that it addressed a particular set of consumers who used smartphones. Some fear cannibalisation from digital but that fear could be unfounded. Pare of Madura Garments says, "We have not seen more than 5 per cent overlap. We are using customer data through our mobile app, CRM data and loyalty cards to provide location-specific instant notifications to consumers through mails and messages."
Getting it right
Remember, location-based marketing is not simply about a richer and more personalised consumer experience, it also about context. Marketers need to combine consumer interactions with context, blending preferences and location. Says Vinay A Bhopatkar, chief operating officer, Van Heusen India and People, Madura Fashion and Lifestyle, "While we have been using GPS and bluetooth-enabled technology to provide customers in the vicinity with realtime promotions, it is more tactical in nature. The whole idea behind location-based marketing is to attract footfalls to the stores." Van Heusen has digital listening centres where it collects customer data from CRM, store, social data, loyalty cards to understand what trends and the problems that plague the retail end. It also targets messaging through select kiosks activities in malls.
For the Future Group, location-based marketing is about aggregating demand locally and directing consumers to nearby stores with contextual offers. Says Akshay Mehrotra, chief marketing officer at Big Bazaar, "At Future Group, we are using location-based marketing to aggregate demand of consumers. So if a consumer is looking for a specific products online, we serve her a location-specfic ad to direct her to the nearest store. To enable such offers one not only needs to digitise the inventory but also target it on a geo-position basis. Both your store and your ad words need to be connected."
So far traditional retailers have managed print advertising on a local basis. Every city and catchment area have a separate print ad. "We have been using the Google Lightbox feature which digitises our ad to location and have been doing so for our properties like Wednesday offers etc," says Mehrotra.
With the growing dependence on mobile, almost every social site such as Facebook, LinkedIn and Twitter have integrated location-based services. Earlier, while the consumer had to check in into a particular place, now it has become more passive as location services are perpetually on. That has given a lot of momentum to location-based marketing. "The third-party apps used by consumers are churning out a lot of location-based data for advertisers. So if you tweet from a particular location, you may get offers relevant to that. Sula Vineyard, for instance, gives discounts/offers to consumers if they check in from its property. Similarly, Starbucks gives incentives to consumers who tweet about it from the cafe," says Zafar Rais, CEO at MindShift Interactive.
But all that marketing effort can go for a toss if mobile data is switched off, says Rais. Thus, offering free WiFi at a store can bring with it some big pluses for marketers.
That said, no matter how smart customer engagement gets, it make business senses only if it boosts conversion rates. When working on a geo-targeted advertising, therefore, remember to build in a conversion matrix - customers coming though such offers versus customers coming naturally. This will help in identifying the right context and the right content for your deals.
In the past two years, the share of search through mobile has gone up and so have the social media advertising revenues. Customers are shopping on-the-go and omni-channel has redefined the digital buyer journey. Here are the following ways in which a smart retailer can combine digital with location based marketing to increase revenue:
Cut to India. Retailers are working overtime to tap the potential of this medium. Take Madura Garments, which is using location-based marketing to bring together its stores and connect them with its online portal Trendin for a seamless consumer experience. At present consumers who purchase online can return products and claim free alteration at any store in the vicinity and can also shop online and pick the purchase at any nearby store. Says Shivanandan Pare, head, e-commerce, Trendin.com, "For any location marketing to work, you need to first recognise the customer, whether it is the same customer that browsed the product online and which stores she mostly visits and at which location. You need a reference point (previous shopping history, email id, mobile number etc). For example, offers provided to Trendin mobile app users and push notifications through SMSes, have considerably bolstered our store traffic."
Now look at what Cafe Coffee Day is doing. It collects data from stores and reviews it periodically to understand which store is getting how what sort of walk-in at a particular time of the day and marries that insight with consumer demographic and personas. Each promotion is designed for a particular cluster of consumers with a specific persona, such as the way they dress, their food preferences and so on. Accordingly, boost-up activities are planned. "We use mobile for hyperlocal activities more than the web as it enables us to track down the location of the consumers before triggering off a promotion. We have our own customer data and also collect data through Cafe Moments programme. We also work with mobile agencies, where we reach out to consumers based on the apps they have downloaded and provide promotions at the app-notification level," says Bidisha Nagaraj, group president, marketing, Coffee Day.
Experts say location specific advertising works best in spontaneous categories. No wonder Cafe Coffee Day has seen high click-through rates for most of its hyper local offers on mobile phones. Evidently, location marketing is de rigueur for retailers today. Says Kumar Rajagopalan, chief executive officer, Retailers Association of India, "For retailers, it is has become extremely important to attract consumers from their targeted trading catchment. Gone are the days when retailers would ensure that they were visible in various newspapers, publications, maps or other marketing mediums available and that would be enough to reach their preferred catchment in the particular location. Now, thanks to mobile technology, retailers can enable product discovery and provide real time offers to customers, when they are in the shop's proximity. Some of the advertisements even allow customers to click and discover offerings of the retailer via video, catalogues and other rich content forms."
In short, the idea is not just to bring the footfall to the store, but also to take the store to the customer. Nagraj says data connectivity has today become hygiene as opposed to five years back when a marketing programme had to be designed in a way that it addressed a particular set of consumers who used smartphones. Some fear cannibalisation from digital but that fear could be unfounded. Pare of Madura Garments says, "We have not seen more than 5 per cent overlap. We are using customer data through our mobile app, CRM data and loyalty cards to provide location-specific instant notifications to consumers through mails and messages."
Getting it right
Remember, location-based marketing is not simply about a richer and more personalised consumer experience, it also about context. Marketers need to combine consumer interactions with context, blending preferences and location. Says Vinay A Bhopatkar, chief operating officer, Van Heusen India and People, Madura Fashion and Lifestyle, "While we have been using GPS and bluetooth-enabled technology to provide customers in the vicinity with realtime promotions, it is more tactical in nature. The whole idea behind location-based marketing is to attract footfalls to the stores." Van Heusen has digital listening centres where it collects customer data from CRM, store, social data, loyalty cards to understand what trends and the problems that plague the retail end. It also targets messaging through select kiosks activities in malls.
For the Future Group, location-based marketing is about aggregating demand locally and directing consumers to nearby stores with contextual offers. Says Akshay Mehrotra, chief marketing officer at Big Bazaar, "At Future Group, we are using location-based marketing to aggregate demand of consumers. So if a consumer is looking for a specific products online, we serve her a location-specfic ad to direct her to the nearest store. To enable such offers one not only needs to digitise the inventory but also target it on a geo-position basis. Both your store and your ad words need to be connected."
So far traditional retailers have managed print advertising on a local basis. Every city and catchment area have a separate print ad. "We have been using the Google Lightbox feature which digitises our ad to location and have been doing so for our properties like Wednesday offers etc," says Mehrotra.
With the growing dependence on mobile, almost every social site such as Facebook, LinkedIn and Twitter have integrated location-based services. Earlier, while the consumer had to check in into a particular place, now it has become more passive as location services are perpetually on. That has given a lot of momentum to location-based marketing. "The third-party apps used by consumers are churning out a lot of location-based data for advertisers. So if you tweet from a particular location, you may get offers relevant to that. Sula Vineyard, for instance, gives discounts/offers to consumers if they check in from its property. Similarly, Starbucks gives incentives to consumers who tweet about it from the cafe," says Zafar Rais, CEO at MindShift Interactive.
But all that marketing effort can go for a toss if mobile data is switched off, says Rais. Thus, offering free WiFi at a store can bring with it some big pluses for marketers.
That said, no matter how smart customer engagement gets, it make business senses only if it boosts conversion rates. When working on a geo-targeted advertising, therefore, remember to build in a conversion matrix - customers coming though such offers versus customers coming naturally. This will help in identifying the right context and the right content for your deals.
| Make it contextual: Anil Kaul |
| |
- A retailer can track nearby consumers through geo-tracking and accordingly give them directions to its closest stores. Thus, making their offers locally relevant and acquire an audience that is most likely to convert. In other words, by running ads showing where to view, touch, and purchase their products, retailers can close the gap between brand engagement and product purchase. We’ve seen 10 per cent to 50 per cent improvements in click-through rates simply based on adding something of local relevance, even if it isn’t driving in-store traffic.
- Retailers can also use location marketing for creating brand awareness by claiming a place with broad reach and using display units or SMS, with no call to action. Brands can ‘claim’ a place by associating their messages with physical locations in proximity through geo-fencing. This allows them to reach a large number of people by leveraging geo-targeting and mediums like mobile display while taking advantage of dynamic creative. Examples of this could be geofencing gyms, parks and basketball courts, The North Face geofencing ski resorts, or a luggage brand geofencing airports.
- Offers and coupons: Relevant mobile coupons are very helpful to engage shoppers in real time and drive them to a nearby store to make a purchase. In a survey conducted recently, 51 per cent of shoppers said that they are more likely to enter a store and purchase something if they receive a coupon on their mobile device while they are near that store.
- Location-based marketing (LBM) is a great opportunity for consumer products brands to connect with their consumers wherever their products are sold, either working with their distribution channel/retailers (co-marketing) or independently from them. Using LBM methods enables them to communicate special offers or discounts, with a call-to-action on where the consumer can purchase nearby. They can also communicate about nearby events organised at by the retailer for specific product launches, demos, or free samples and raise awareness through associating a brand with a place, time and context such as weather.
- Location tools play a key role in market research. Consumer products companies can use location to better understand where, how and when their customers shop offline to market more smartly to these audiences — whether that’s with out-of-home advertising, point of purchase displays or identifying new partnership opportunities.
Anil Kaul
Co-founder & CEO, Absolutdata Analytics
Co-founder & CEO, Absolutdata Analytics