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Don’t Fence Me In

Rather than targeting customers when they’re in the general vicinity, retailers should use geo-fences to target customers based on where they’re at inside the store.

Advertisers have so many new targeting options these days with mobile technologies, GPS and what-have-you, nobody is quite sure what to do with it all yet.

Take geo-fencing, for example. A geo-fence is a virtual boundary around a geographic area. Think of it like one of those “invisible fence” dog collar systems to keep Rover in your yard and out of the neighbors’. Except, when you cross the line, instead of getting a nasty electric shock from your collar, you get discount offers on your mobile from nearby merchants.

The most common approach I’ve seen so far isn’t as effective as it could be. Seems like the current thinking (from Placecast ShopAlerts, Google, Apple Passbook, etc.) is to target potential customers when they get within a certain range of a retail store. For example, let’s say you arrive at a shopping centre. A big box retailer delivers an offer to your phone—maybe 10 percent off anything in the store, or a buy-two-get-one-free deal on a particular product. The goal is to get you into the store. But really, what does the retailer know about your intentions at this point? Very little. Of all the thousands of products they sell, how do they know what to promote? They don’t.

There’s a better way. Rather than establishing geo-fences outside the store, why not create them inside the store? I think this is the next generation of geo-fencing.

If retailers can identify what area of the store you’re in, they can tailor their offers that much more. If you’re in the pasta aisle at the grocery store, you might get a coupon for marinara sauce.

Knowing that people are near a store is interesting. Knowing where people are within a store—that’s really valuable.