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How Proximity Marketing Works for Bricks-And-Mortar Brands

Looking for a way to up your game when it comes to personalization? It would be a wise move! Smartphone users tell us again and again that when it comes to the way marketers communicate with them, irrelevant content and inconsistent messaging continue to dominate the pick of the pops when it comes to their biggest frustrations. But as technologies advance and consumer needs become ever more sophisticated and nuanced, brands that fail to personalize the customer experience will simply be outrun by the competition – at an alarming speed. 

Step up to the plate, proximity marketing, currently enjoying its long-awaited moment in the spotlight as smart brands with a brick and mortar presence get busy engaging customers with hyper-relevant, valuable content – and by default, boosting the bottom line. It’s no flash-in-the-pan either; the proximity marketing sector is being projected to reach $244.5 billion over the next 5 years, expanding way beyond the retail sector to include QSRs, hotels, shopping malls, and airports. Bottom line? If you’re not already on board, it might be time to take a closer look at how proximity marketing works for brick-and-mortar stores, powering new growth opportunities and boosting the bottom line …

How does proximity marketing work?

In a nutshell, proximity marketing means using a customer’s location to market the products and services that best meet that customer’s specific needs. So when I walk into my local Macy’s, for example, and I receive an offer on my cell for a product that I was looking at on the Macy’s website last week, that’s proximity marketing hard at work .… Or when I pass Sephora on my lunch break and I receive a buy-one-get-one-half-price offer on their new makeup range – that’s proximity marketing … or maybe Nordstrom will get to me first, luring me away from Sephora with an even more appealing offer and making the most of proximity’s latest ‘craze’, ‘conquest geofencing’. But however it’s done, using proximity marketing ultimately allows for the finely-tuned personalization of your marketing campaigns, taking them from average to brilliantly effective. Let’s take a look.

Benefits of proximity marketing 

  • It can deliver a hyper-personalized user experience. Finely-tuned personalization has the potential to increase both the time and the dollars that new and existing customers will spend within your brick-and-mortar locations; proximity marketing will help you make huge advances in your quest to deliver a personalized customer experience that your audience loves.
  • It will give you a competitive advantage. Proximity marketing enables a level of personalization that customers love – and we all know that brands which have personalization at the heart of their growth strategy will enjoy faster growth than those that don’t.  
  • It will help increase your conversions. Delivering the right message or offer at the right time, and in the right place, will help you to hang on to your customers far more effectively than hit-and-miss campaigns that rely on pot luck. Regular, relevant, valuable offers which can be delivered to customers near or in your brick and mortar stores will help drive in-store purchases and keep your customers close to you. 
  • It will boost those engagement and retention figures. A great user experience is critical to retaining customers, and a well thought through proximity marketing strategy that reaches users with regular personalized offers, rewards and content when they’re most likely to want it can really help keep them engaged, and coming back for more.

And if that’s not enough to convince you, then consider this: 

  • 89% of U.S. marketers reported that personalization on websites or apps resulted in an increase in revenue. (Google Think)
  • 58% of us want personalized marketing from the companies we do business with (Salesforce)
  • 72% of consumers say they only engage with personalized messages (SmarterHQ).
  • Consumers are twice as likely to add items to the basket and 40% more likely to spend more than planned when experiences are highly personalized. (Google Think)
  • Providing a highly personalized CX means  20% higher on net promoter score (NPS)6, which measures how likely it is that a customer would recommend a product or service to a friend or colleague.

Types of proximity marketing

There are several technologies you can leverage to kick-start your journey into proximity marketing … let’s take a look at each of these, how they can be used, and real-life examples to inspire your own campaigns:

QR Codes

For a long time, no one believed QR codes really had a future, but technology and consumers have changed, and along with them, the humble QR code’s popularity. Today, 54% of shoppers aged 18 to 19 reported using QR codes at least once in the past three months, and 59% of shoppers in the US say that they’ll be using QR codes permanently – not bad for a technology that’s had more than its fair share of naysayers over the years! Today, most marketers have at least considered QR codes as part of their proximity marketing activities. As a result, most of us are no strangers to scanning QR codes to pay for goods at the till, grab in-store discounts, reap loyalty rewards and view menus (52% of the one million+ restaurants in the States use QR code menus). Long and short? You can do a lot with QR codes and proximity marketing.

Who’s doing it well?

Retail giant Walmart is no stranger to the QR Code, using the technology in ever-more innovative ways, and in the process elevating the brand to dizzying heights. They were the first brand to use QR codes to facilitate in-store payments; the first brand to open a virtual toy store (no mean feat in 2012) in which every item had a QR code displayed beneath it which when scanned would take you to the relevant product on their website, and more recently, their new store experience, ‘Time Well Spent’, a QR-Code-driven initiative which amplifies  “the physical, human and digital design elements in its stores to inspire customers and elevate the experience.” 

They do this by incorporating QR codes and digital screens across these newly designed stores to “create opportunities for digital exploration”, and focusing on navigation and wayfinding. The initiative has been so successful that they now have almost 1,000 stores incorporating this new design and helping customers save time in finding what they’re looking for. 

Beacon Technology

Using beacon technology in retail is a fast, low-investment way to connect with your in-store customers. Not only does it enable you to engage with the right people at the right time, but it can provide valuable customer insights to help you refine your campaigns. Beacons are small devices that transmit Bluetooth signals to smartphones. Sounds innocuous enough, right? Yet brands utilizing the technology, using it to send alerts, discounts, coupons and offers to their app users, see a significant increase in engagement, retention, and spend – and over 70% of consumers say that beacon-triggered personalized offers and content increase the likelihood of them making a purchase in-store. There’s just one caveat –  the intended recipient of your offers must have your app installed on their smartphone, but when they do, utilizing it to send discount codes, rewards points, special time-sensitive offers and helpful information will go a long way to boosting engagement and leveraging loyalty.

Who’s doing it well?

In a similar vein to Walmart, Target implemented an indoor mapping element to its mobile app back in 2017 to help shoppers navigate their way around their often vast stores and find the items they need, at the time calling it “GPS for your shopping cart.” Sounds almost unremarkable until you realise that rather than just showing a map to customers with the endpoint they’re aiming for, the beacon technology used allows for the real-time tracking of a customer’s location, showing them where they are as they move. 

Customers can also use the app to create shopping lists at home, and then in-store use the app to locate the items. What’s more, once a Target customer has downloaded the app and enabled Bluetooth, beacons ensure they’ll get product recommendations and offers via push notification for the department they’re located in, though limiting these alerts to two per visit to avoid overload. Sounds like our kind of weekly shopping experience!

Geofencing

Compatible with over 90% of smartphones, geofencing works by creating a virtual ‘fence’ around a specific location in GPS or RFID-enabled software. When a person enters or exits the area defined geofence, the predetermined action will trigger, and, they say, success shall be yours! It’s been a long time coming, but today geofencing is one of the fastest-growing methods of marketing that brands are using to reach their customers, and for good reason; campaigns that serve content through geofencing see double the click-through rate of the more ‘regular’ approaches. Use cases for geofencing are similar to those of beacons … so for example, when a customer passes a geofenced pizza outlet, it’ll trigger a push notification with a buy-one-get-dessert-free special … or perhaps send you a QR code to show at the till for a one-off discount. But that’s not where the story ends. Brands can also establish a geofence around a competitor’s location – called ‘geo-conquesting – so that when your customers get a little too close to being tempted inside, they’ll get a timely, irresistible offer from you, luring them back to you and out of harm’s way. 

Example

One of the most famous examples of geofencing a la geo-conquesting is Burger King’s 2019 Whopper Detour campaign which saw them make bold moves on Mcdonald’s customers by offering its Whopper burger for just 1 measly cent. The catch? There wasn’t one – except for Macdonald’s, because the offer was only available to customers with the Burger King app who ordered with it while in a Mcdonald’s restaurant. Ouch. 

Of course, there was a lot of groundwork that took place before this infamous coup. First, BK had to collect data on literally thousands of McDonald’s restaurants so that they could implement geofences around each one and trigger the promotion. Asides from the overwhelming success of this audacious campaign, the publicity it generated at the time was utterly priceless. 

NFC

Brands and retailers with a brick-and-mortar presence need ever more innovative tools to connect with their customers and deliver an exceptional CX, and NFC continues to deliver. When it comes to technology, NFC is positively old-school, having made its debut in 2002 – yet today it’s frequently utilized by big brands to connect with customers and deliver these hyper-impactful moments that can make or break a campaign. With almost 1.5 billion NFC-enabled smartphones in the world right now, it’s easy to see the attraction! NFC – near field communication – works by enabling nearby smartphones to communicate with an RFID chip (radio frequency identification), so the chip can send content to the smartphone user. Most commonly used in stores for contactless payments, brick and mortar brands that have cottoned on to its capabilities use the technology to instantly share content such as video, images, product reviews, and descriptions when customers point their smartphones at the RFID chip, usually on an in-store poster, point-of-sale, flyers, product shelves – or even chips on the products themselves.  

Example

Clothing brand Timberland’s New York store is packed full of NFC tags, introduced back in 2017 to help make the in-store experience both hyper-engaging and helpful for the tens of thousands of customers that pass through its doors every year. When customers enter the store, they can borrow NFC enabled devices that allow them to browse in-store products (all of the products have NFC tags), learn more about them and enjoy offers and discounts on certain products that might catch their eye. 

As well as creating a great CX, the brand captures invaluable customer insights through their interactions with the products and store environment and uses these insights to continually fine-tune the in-store experience. 

Conclusion

Maximizing the customer experience and building the loyalty needed to power growth and keep you one step ahead of the competition means constantly looking for new ways to reach your customers with personalized, valuable content. As we make big strides into hyper-personalization, we’ll see more and more brands – big and small – refocus their strategies around proximity marketing to deliver moments that really matter to customers. To find out more, and how we can help, let’s get the conversation started.