Tracking a customer’s smartphone location and sending them a localised offer at a key moment is one way that Australian retail could gain a competitive edge amid declining sales and competition from major international retailers, says Esri Australia.
The latest solution from GIS technology company Esri Australia will enable retailers to place a virtual perimeter–known as a ‘geo-fence’–around a storefront, triggering push notifications to customers’ phones when they cross the boundary.
Personalised special offers – for example, promotions, time-sensitive discounts, or loyalty bonuses – will be delivered directly to the customer, via an opt-in app, to attract them into the sender’s store.
Esri Australia principal consultant Gary Johnson said the geo-triggered messages allowed retailers to start a tailored conversation with consumers at crucial moments during their shopping experience.
“Retailers place a high price on personally engaging customers as they walk through a shopping centre or district,” Mr Johnson said.
“Unlike SMS or email campaigns, the technology doesn’t bombard shoppers with random promotional material at an inappropriate time or place.
“Instead – by taking advantage of smartphone GPS features – GIS technology can provide retailers with precise details of customers’ movements in and around their business.
“This insight can be used to deliver targeted messages as part of a strategy to improve personal service to customers or as a value-add for a complementary business.
“For example, a shoe retailer could reach out to customers leaving a clothing store with a notification that reminds them to purchase footwear to match the new clothes they’ve just bought.
“Conversely, a retailer could establish a geo-fence in the vicinity of a competitor’s store which would trigger a time-sensitive special offer to tempt customers back.”
What was not mentioned, however, was how these hyper-local geo-fences would achieve accuracy inside GPS-hostile shopping environments.
Mr Johnson’s comments follow a recent report by commercial property firm Colliers International that revealed 28 international retailers, including H&M, Sephora, Next, Gap and Zara, are looking to establish 235 new stores in Australia within the next five years.
The report also expressed concerns that the international retailers’ global reach would enable them to bring products to Australia at greatly reduced prices and undercut smaller, local retailers.
Mr Johnson said introducing geo-trigger technology now would give local businesses time to consolidate customer loyalty ahead of the expected international competition.
“Early adoption of the solution will give established local businesses an edge over incoming retail juggernauts by enabling them to provide superior, personalised customer service,” Mr Johnson said.
“A major convenience store in the US has already seen a 10 per cent rise in sales nationwide using this technology.”
As with many of the standing loyalty schemes, participation would be voluntary, with consumers needing to ‘opt-in’ before their personal data and location are shared. However, whether or not a large proportion of customers will be willing to accept a constant monitor on their location as well as a new ‘bombardment’ of advertising and coupons being pushed to their handsets will only become clear in time.
“It is an equal exchange, the customer is prepared to provide some personal information, for example, their location and shopping habits, in return for special offers or higher quality service,” Mr Johnson said.
