Geofencing tipped as hot trend for 2014
Posted by Retail Week on 7th Mar 2014
Geofencing is poised to be a
major mobile trend of 2014 as retailers use location-based technology to
deliver highly targeted advertising and promotions.
Across the retail space there
are dozens of little signs that retailers are growing comfortable with integrating
consumers’ mobile habits into stores.
For John Lewis this
includes something as simple as fitting mobile ChargeBoxes in its Watford and
Peter Jones stores, where shoppers can lock their phones away to charge for 30
minutes as they keep shopping; meanwhile, a whole host of retailers are
concentrating on offering quality wi-fi in their stores. But what retailers
need to do now is not just accommodate mobile technology, but use it to their
own advantage to enhance the traditional shopping experience.
It’s an idea that is
catching on. In January EMA Retail Research released the findings of a survey
of 50 International retailers. It reported that 55% already have their own
smartphone apps and that 87% are using digital strategies to increase revenues.
Four-fifths of the chains said they expect these strategies to increase
So it’s no wonder that one of the hot trends tipped for
2014 is location-based technology. Put
simply, this gives retailers ways to
communicate with smartphone-owning customers in their stores without having an
assistant ask them ‘are you being served?’
The technology generating the most buzz by far at the
moment is iBeacons - Apple’s data sharing system.
Since it was first announced in June last year at the same time as iOS7, there
has been speculation about how the technology can be used to help retailers.
iBeacon uses a
Bluetooth connection to send radio waves to mobile devices from stationary
beacons, which can broadcast to a distance of about 50 metres. They can send
just about any kind of data - including special offers, hence the obvious
appeal for retailers.
at the time of writing, iBeacons have only been used in a small way in the UK
after food chain Eat announced a trial - although Apple is using the technology
in some of its US stores.
specialist Exact Editions, who turn magazines such as Wallpaper and Dazed &
Confused into cutting-edge tablet and smartphone editions, are running one of
the first trials of iBeacons in this country.
For the trial, Exact Editions has partnered with Bar Kick
in London’s Shoreditch area, appropriately very close to the area designated as
Silicon Roundabout where a lot of digital businesses are based.
Starting in December last
year, patrons of the bar with iPhones and iPads and who download an iBeacon app
are offered the chance to browse issues of magazines for free via Exact
Editions ByPlace subscription scheme, while they’re eating or drinking at the
According to Daniel Hodgkin
from Exact Editions, Bar Kick views the venture as “a valuable way of improving
the customer experience at the venue, encouraging patrons to stay longer, as
well as encouraging new customers to frequent the venue, encouraged by the
prospect of free magazines, which they can then take with them”.
This first case study has
obvious applications for retailers looking for other kinds of content, and
Exact Editions is in talks with other sectors about rolling out the programme
further. Hodgkin believes that soon consumers will be as au fait with iBeacons
as they are with wi-fi, but cautions that “while they are not, it is vital for
the retailer or cafe etc to properly sign and market the iBeacon access”.
While iBeacons are one
of the most talked about technologies of 2014, they aren’t the only
location-based tools emerging, and for any retailer wanting to investigate
communicating with customers via their mobiles, there are other technologies to
The SmartRewards app, launched last month by the Swan
Shopping Centre in Eastleigh, rewards shoppers with points towards discounts,
prizes and offers when they physically visit the centre or share content with
friends (see box).
Another technology that uses
smartphone technology is Q App. Like SmartRewards, it is app-based, but the
difference is that once users have the app installed on their phones it works
in numerous venues.
Q App was inspired by a wish
to jump queues, and as a result it has taken off in pubs and bars - but it
could also be utilised by retailers wanting the same benefits for their
Instead of queuing to
order goods, customers can send an order using Q App and then wait for someone
to bring their purchases to them. According to Q App chief executive officer
Serge Taborin: “Customers benefit from not having to stand in queues, but it’s
the venues that truly benefit from embracing Q App technology.”
This is because businesses
can showcase their full offering, which gives customers more choice than if
they’re just selecting from what they see in front of them. It also allows
customers to pay via card details stored in the app, reducing cash-handling costs.
Finally, it reduces the problem of losing customers because they are not being
served as quickly as they’d like.
But while all of these are sound business reasons for
retailers to get involved, a note of caution should be sounded. As with all
customer communications, there is a fine line between offering helpful, welcome
messages and spamming. The future of promotions may lie in location-based
targeting, but just make sure your content engages and doesn’t annoy.