Mind the gap: How location data bridges the digital and offline customer experience

Consumers are increasingly relying on their mobile phones to research products and Forrester has predicted that mobile will influence $1.4 trillion in offline sales by 2021. They are also using brand apps more. According to a survey by the International Council of Shopping Centres, 71% of consumers admitted to having one or more retailer apps on their phones, while 74% said they access them at least once a week.

But as Ian James, general manager international at Verve points out in the episode, brands are continuing to “under-invest” in mobile – despite its potential to improve customer engagements. At the same time, they are also guilty of underestimating the power of real-world shopping: “In fact, 90% of sales occur in brick and mortar stores,” he says.

He explains how location data can bridge the gap between the two and enable brands to personalise their creative messaging. A brand can do this by tracking a customer’s in-store movements through its app with an SDK integrated into it. By using a combination of beacon technology, Wi-Fi and historic device location data, the retailer gains a clear picture of the customer in real-time. Once the customer uses their loyalty card in-store and exits the store with goods: it is mission accomplished.

“[You have] a mobile influenced attribution to a specific store using precise location targeting, dwell time, shopper movement in-store and CRM all overlaid together,” James says.

But the experience needs to be seamless for it to work, adds Julian Smith, head of strategy and innovation at mobile-first agency Fetch. He warns that delivering a clunky and semi-functioning experience could potentially do more harm than good.

“A brand needs to actively encourage their audience in-situ (whether on the street or in the store) to take out their smartphones and access the bridging content, which may not actually be as intuitive as you may think.

He adds: “A key issue with developing a bridging experience is whether markets will generate the scale of response to warrant the time and effort that goes into it. Furthermore, bringing the right skills and expertise together to create truly effective location-specific content can be trickier then it may appear.”

While online sales are gathering pace, evidence shows that consumers still like to shop in physical stores. A study by IBM and the National Retail Federation reveals 98% of generation Z consumers shop in store. Furthermore, Amazon is expanding its Amazon Go stores following its acquisition of Whole Foods. Retail giant Alibaba has taken a unique approach by implementing a ‘New Retail’ business model and merging its physical and digital commerce functions.

Another challenge for marketers is adjusting their expectations when it comes to measuring engagement for transactions online and offline, adds Scott Gill, MD of local news publisher co-operative 1XL.

“There is still no bulletproof way of tracing bricks-and-mortar footfall response to digital campaigns, which is preventing retailer investment in digital channels.”

But if done right – James says the returns can be fruitful. And while data privacy is important for consumers, they are happy to share their location data in return for personalised messaging.

Moving forward, the challenge will be keeping the trust of the consumer. With the General Data Protection Regulation (GDPR) set to be enforced in 2018, brands will need to demonstrate their ability to handle data responsibly and securely, according to Michelle Du-Prat, strategy director and co-founder at leading retail consultants Household.

“There is a real need for businesses of all kinds to reassess their use of customer data before regulation catches them out and customers switch off access that businesses had previously taken for granted,” she warns.

For brands to build better relationships with consumers – and gain new loyal ones, location data provides the link in seamlessly connecting their online and in-store shopping experiences. Brands just need to tread carefully as while consumers are happy to give their trust – they can just as easily take it away.

Everything You Need to Know About Location-Based Advertising is the fourth EYNTK series from The Drum, designed to help viewers get up to speed with some of the most important issues in today’s marketing industry in one short film – something they can watch in the back of a taxi on the way to their next crucial meeting on the subject.