Brick-and-Mortar Retailers Striking Gold with Mobile-Phone Messaging

What: Brick-and-mortar retailers are flocking to mobile phone, SMS, geofencing, Bluetooth and GPS technology as they discover new and powerful ways to communicate with consumers inside and outside of their stores. Interviewee: Gatorade's Tiago Pinto.
Why it matters: Portada follows the money to understand this gold rush into mobile phone messaging. That’s because the bottom line for retailers adds up to a lot more sales.

The ubiquitous mobile phone may prove to be a lifeline to struggling brick-and-mortar retailers who have found new and powerful ways to engage in one-on-one conversations with consumers, fueling an investment and marketing boom in geofencing, SMS, push notification, beacon, Bluetooth and other technologies.

In fact, if numbers reported by retailer American Eagle are any indication, failure to adopt may be unaffordable. The fashion retailer reported a three-fold increase in sales after using geofencing to drive foot traffic into stores, according to a recent report by AdWeek.

E-commerce sales may be exploding, but it’s too early to discount the local shopping mall or retail as we’ve traditionally known it. The price of shares in Target are surging as the US rides a wave of rosy economic numbers.

But there’s more going on under the hood for brick-and-mortar retail than you may realize, and Target knows it. According to Chain Store Age, Target is expanding the use of its own mobile phone app to let customers place orders on their phones and then pick up their goods at the store’s curb without ever leaving their cars.

There’s more going on under the hood for brick-and-mortar retail than you may realize.

Not your father’s bricks-and-mortar retail

Target’s use of its mobile phone app is the tip of the iceberg of a bevvy of exploding technologies that has altered the landscape of brick-and-mortar retail marketing well into the foreseeable future.

Your mobile needs global positioning system (GPS) technology to find the nearest cell tower. But it also allows retailers and apps like Facebook to pinpoint your location to within less than 100 meters.

Enter SMS, Bluetooth beacons, geofencing, push notifications and stores’ own apps and retailers now have a whole new way to lure customers into their aisles—including targeting you even when you’re shopping at a competitor’s location.

JCPenney, Whole Foods, and Best Buy are using mobile apps to send special offers and coupons to customers, according to Mobile Business InsightsPepsiCo’s Gatorade discovered three years ago that it could use Facebook and GPS to post offers on Facebook for soccer players within a certain distance of known team practice locations in Brazil.

“Sales went through the roof,” Gatorade’s Global Marketing Director Tiago Pinto tells Portada. The program was expanded to other cities in Brazil and PepsiCo now uses GPS and Facebook to send messages to consumers in Mexico City, Bogota, Buenos Aires, Lima, and Santiago. Feedback has been positive from consumers, according to Pinto: “I think as long as you are providing a service and not interrupting, the consumer sees it as welcome. They want to receive content that is relevant to them.”

Geographic location is just one of the barometers you have to look into. The consumer’s profile is more important.

"Gatorade would like to expand the program to include WhatsApp, but Facebook which owns WhatsApp has yet to make that possible", Pinto says.

Brave new world for retailers

GPS technology and cell phones have opened up a brave new world for retail marketers, but at the end of the day, Pinto tells Portada that knowing the customers' likes and preferences is still the key to the kingdom.

“I think geographic location is just one of the barometers you have to look into. The consumer’s profile is more important,” says Pinto.

Nevertheless, the seemingly endless growth in cell phone usage worldwide makes the possibilities appear limitless.

According to a study by Criteo, retailers in North America with both a mobile website and a mobile phone application make 67% of their sales on their mobile apps.

Tech Crunch reports that consumers now spend fives hours per day looking at their cell phones, and according to Mobile Business Insights, SMS messages are read by 98% of consumers who receive them.

Having their own mobile app allows retailers like Target to send push notifications to their app users.

Geofencing investment to hit $1.7 billion

But the cherry on the ice cream may be the combination of GPS with geofencing.

With geofencing, retailers can selectively message mobile phone users when they are within say a mile radius of the store. It also allows retailers to set up geofencing perimeters around competitors’ locations to target offers to consumers considering the competition’s options.

With geofencing, retailers can selectively message mobile phone users when they are within say a mile radius of the store.

Investment in geofencing is expected to race past $1.7 billion in 2024, with the fastest growth seen in the Asia-Pacific region, according to a study by Global Market Insights.

“As more and more brick-and-mortar retail businesses are implementing proximity-based marketing campaigns, the applications of geofencing-based marketing solutions are poised to increase rapidly over the forecast period," the study found.

Key players in the geofencing market are Apple, Google, Thumbvista, Esri, Urban Airship, Bluedot innovation, Gimbal, Embitel, Placecast, Simplifi.fi, Swirl Networks, Radar Labs, UpSnap, GeoMoby, PlotProjects, Localytics, Pulsate, Mapcite, and DreamOrbit, the study said.


Mark A. Browne

Mark A. Browne

Mark A. Browne is Portada's Marketing Innovation Editor. He is a bilingual (English-Spanish) writer, media relations manager, and content creation professional with an established record providing journalism, copywriting and analytical content services to major publishers, PR agencies and businesses in the United States, Latin America and Europe. His award-winning career as a reporter and editor includes daily and weekly newspaper experience and free-lance writing for major print and online publications.

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