Location data could let retailers entice customers in new ways

If apps can detect customers inside a store, a world of promotional possibilities opens.

locate.pngLocation-based data is an important part of social networking platforms, smartphone navigation tools, and augmented reality apps, to name just a few areas. Now, as more retailers dive into the app market, maximizing the use of location-based data could maximize sales potential as well.

In a recent post about sales in brick-and-mortar bookstores, Joe Wikert touched on the potential of location-based data:

When I open your app and you’ve detected I’m in-store, offer me special deals which are only good for the next hour. Make sure all the deals are fully redeemable using only my smartphone app. Don’t email me coupons. Push them into the app so I can just flash my iPhone at the checkout counter and be on my way without fumbling through my email inbox.

As Wikert notes in the post, the merger of location data, sensor technology, and customer information could lead to hyper-targeted retail windows:

Take a page out of Groupon’s play book. Use your nifty new app to track how many customers with common interests are currently standing in your stores. Push a message like this to all of them: “You’re a history buff but you’ve never bought this great ebook about FDR. If at least 100 of you commit to buying it in the next 10 minutes we’ll give you all a special discount of x%. Stop by the Biography section to browse the book and see why we think it’s perfect for you.”

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Such technology isn’t far off, if not already here. Apps exist to help users locate each other, find a bar nearby, and even push location-based coupons at consumers. Google recently licensed data from new media advertising and consulting agency The Aura Group to provide location-based movie ads and theater listings, linked through so users can buy tickets.

There’s also an app called Shopkick that uses a device’s microphone (once the app is launched) to detect a customer entering a store. Customers earn “kickbucks” for visiting a store and then redeem them later for things like gift cards, vouchers and movie tickets. There are issues with ease of use, fraudulent activity, and data acquisition, but Shopkick appears to be headed in the right direction (for retailers … consumers might have a different perspective about these sorts of applications).

These current tools represent just the first wave of location data applications. In a recent interview here on Radar, RunKeeper CEO Jason Jacobs considered future possibilities:

There are interesting potential applications as well. For example, if the application knows that running shoes should be changed every 500 miles, and it sees a user has logged 450 miles, a coupon could be offered for their next pair of shoes. And wouldn’t it be great if that coupon is from a retailer that’s three blocks from their house?

The pace of innovation in sensors parallels the pace of innovation in smartphones. But what if there was a way to take location functionality and streaming data capabilities beyond a phone; to shrink them down and lower the cost? The potential applications increase and adoption would increase. A larger community and richer set of aggregate data also creates opportunities to do some really interesting things.

As location technology becomes more powerful, and as the transmission of location data becomes frictionless and fully integrated into applications that weren’t location-aware in the past, the ramifications are massive. Companies can be so much more thoughtful about the way they deliver services and person-specific functionality. That could apply to fitness, travel, logistics, shipping — there’s so many different applications for this technology.

(Disclosure: OATV is an investor in RunKeeper.)

Photo: Locate, Locate, Locate by Gary Bridgman, on Flickr

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