Today smartphones are more secure, more integrated, more connected, more pervasive and more location-aware than ever before. As a result, an incredible amount of highly accurate location-based data is being tracked and transmitted as consumers move from place to place and go about their daily lives, with smartphones often in use and always close to hand.

This presents retailers with a growing opportunity to offer their customers app-based experiences that take into account their location, situation and device. With Juniper Research predicting that the number of mobile apps which leverage contextual or location-based data is set to jump from 2.8 billion to 7.5 billion by 2019, the opportunities have never been better for businesses to use this data to learn more about an app’s users and deliver increasingly contextually aware communications directly to mobile devices. 

Geo-fencing is one such location-based technology that can be leveraged by retailers to help businesses improve user-experiences, match the right user with the right content, deliver highly personalised, contextually aware messaging, and gain insight into users’ movements and behaviour. However to be used effectively, the technology requires clarity and precision right from the outset. It is key that retailers are aware of what type of data needs to be captured and how this will integrate with other channels and activities.

What is geo-fencing and how does it work?

Geo-fencing uses a device’s location capabilities to monitor one or more geo-fences in order to trigger an action. A geo-fence is a virtual perimeter around a real world geographical area, commonly defined as a point and radius to define a circular area. To leverage the technology, users simply need to integrate a location aware messaging system into their app, define the geo-fences to be monitored and the associated messages. Modern mobile devices use multiple ways of determining location depending on availability, such as GPS, Cell locations, WiFi hotspots to determine the users approximate location all without the need for additional hardware, such as Bluetooth beacons.

The key benefits in establishing virtual fences around predefined geographic areas is that, when interacted with, geo-fences can prompt the delivery of a push notification and/or update a CRM system, enabling contextually-aware communications to mobile users in real-time; for example upon entry to or exit of a certain external boundary. By utilising geo-fences in a location-aware app, retailers can gain insight into customers’ behaviours through the effective tracking of their movements. This activity can then be used to inform a marketing automation programme. This includes the use of triggers, or push notifications, to ensure that communications reach users when they are most likely to be able to take action. Location-based triggers can also be used to encourage users to re-engage with an app.

Using geo-fences to create a location-aware app

Before planning activity, it’s a good idea for retailers to take time to understand a few key details. For example:

  • Who the consumer is.
  • How they use their mobile device. 
  • The context surrounding their mobile use.

Before deciding where to place geo-fences, it is also beneficial to understand as much as possible about users’ location-based behaviours, including when and how often users will enter or exit the geo-fenced areas that have been set and how long they spend within each one. Businesses also need to establish how the geo-fences will be used to communicate with users. With this information retailers can carefully plan a trial, identifying the best opportunities for interaction and guarding against any potential pitfalls.

It is also important to apply rules and restrictions to any automated communications to prevent the delivery of irrelevant, repetitive or poorly timed messages to users in error. For example, rules and restrictions could prevent delivery of an offer relating to a store that is closing in five minutes, or the redelivery of a welcome message to a user the second, third and fourth time they entered a shopping centre that day.

Wrapping up

Geo-fencing works best as part of a comprehensive targeting strategy and to achieve the best results, retailers need to consider the full range of variables at play and monitor those that can be controlled and optimised accordingly to help ensure the effectiveness of geo-fence triggered communications. However, used in the right way, geo-fences can help do a better job of identifying, locating and helping individual users and improving their experience via highly personalised, contextually aware messaging.