In this blog, I argue that mobile, specifically geo-location, is poised to become the link between traditional and digital marketing, bringing the benefits of digital to the traditional world. I’ll look at why this shift is happening now, and the questions organisations need to be asking themselves in order to respond, and take advantage of the opportunities presented.
I was trying to think of a way of summing this up in a memorable and pithy way. My best attempt was an adaptation of the inscription on the ‘ring of power’ in the Lord of the Rings; for me geo-location is poised to become the ‘one channel to rule them all, one channel to find them. One channel to bring them all and in the darkness bind them’. Perhaps a bit overly dramatic, but hopefully you get my point!
In traditional Marketing, location has underpinned decision making. The importance of physical position has been critical in product sales: where to position your store, how to design your store, including which products are displayed where, how best to communicate to consumers (where to place your advertisements). For me this is brought to life on a daily basis. I live in Shepherds Bush, in west London, and regularly walk to the nearby Westfield Centre (one of Europe’s largest urban shopping centres). En route you see the importance of location in a microcosm. I pass Shepherds Bush Market where there are two stalls, near the entrance, which me and thousands of others, pass each day. I occasionally stop to buy fruit at these stalls, but have never been to the stalls placed further inside the market. Further on, there are the massive Westfield bill boards perfectly placed to project messages to the commuters and shoppers. You enter the shopping centre and stores are carefully located in reference to each other, to make shopping for particular categories as easy as possible. The shop rents are calibrated depending on expected footfall. Every step of the way commercial decisions are being made based on location.
Shepherds Bush Market
However traditional Marketing channels are under threat from direct and online channels. This is partly due to the relatively higher costs of having a physical presence. It is also due to the comparative lack of data to inform decision making. Traditional marketers have had to rely on analysing aggregated numbers and broad customer segments. Each stage of the sales funnel is measured independently of each other, so it is challenging for the Marketer to really understand what is working and why. The only way to personalise the customer’s experience is through individual sales representatives, which is expensive.
In contrast, within the virtual world of the internet, customer data is available in abundance. Individuals can be tracked as they roam the internet, enter stores, gather information and conduct transactions – importantly Digital Marketers can track each customer through the sales funnel and measure conversion rates and customer profitability. In the world of Big Data, Marketers can obtain extensive information on their customers, and can then use this data to personalise and refine the experience of that customer. The outcome is improved sales (and in some cases profitability) as customers respond to an increasingly bespoke experience.
For me, what makes Geo Location so exciting is the opportunity to bridge these two worlds, and to offer Digital customer insights in the physical world. An individual’s smartphone provides a unique identifier which, provided they give permission, allows organisations to track their customers’ location. Data on a customer’s location opens up a world of possibilities. Within a retail environment you can track which shelves they pass, and which items they buy (their conversion rates); important because you can then measure the effects of changing that physical environment. The information allows you either to adapt the physical environment for all customers, or to provide bespoke messages for that individual either on in-store screens or on their personal screen – their smartphone. Furthermore, as well as providing individual messages, there is the opportunity to provide bespoke pricing via individual coupons or deals for that customer. These could be sent to the customer’s smartphone as they pass through the store. The aim is to provide a great customer experience which encourages customers to spend more and to keep coming back.
One major challenge with this scenario is individual privacy, and a customer’s willingness to share their data. However, the way to overcome this obstacle is through providing services which customers value. People are increasingly sharing their location data anyway through the use of GPS applications such as Google Maps. There are many organisations who are already able to collect customer location data through providing great services. Nike has persuaded customers to wear a wristband so that Nike can provide them with health information. Apple have the ‘Find My iPhone’ app. In fact, as I write this I have been scanning the ‘location services’ settings on my iPhone and there are 25 apps which have a setting to provide my location, including photo apps, Facebook, Nike +, Rightmove (a residential property app), a currency converter and a range of others. Geo-location is already out there, and organisations are starting to unleash the potential of knowing a customer’s whereabouts.
So what do you need to do?
I believe that, for the time being, organisations need to focus on what services they would like to offer their customers. How could they further improve customer experience, and differentiate themselves from their competitors, through knowing their customer’s location? The first step is a question of imagination – either considering what location based customer data they would like to have, or imagining services they might be able to provide if they knew a customer’s location. Once you have this view in your mind, the next question is how to achieve this. This stage might take longer, but the technology is fast developing. At that point it would be time to have a conversation with one of my colleagues here at Capgemini about how to make the transformation happen.