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Geofencing: Can Texting Save Stores?

Retailers are trying to make smartphones work for them instead of against them.

Take Maurices. The women’s clothing chain last month started sending promotions to the phones of people who come within a few hundred yards of its stores. Consumers who opt in to the service are sent messages about in-store sales. There is little evidence that sort of marketing actually works, but Maurices wants to give it a shot, in hopes of drawing people to the chain’s bricks and mortar locations.

Some retailers are hoping that “geofencing”–when a customer who has signed up gets within a certain distance of a store, promotions pop into their smartphones–can help slow “showrooming.” Andrew Dowell has details on The News Hub. Photo: Bloomberg.

“If you don’t try, you don’t know,” says David Jaffe, CEO of Ascena Retail Group Inc., ASNA -0.87% the parent company of Maurices.

Retailers desperately hope the technology—called “geofencing”—can be at least one successful response to the dreaded “showrooming,” where a shopper comes into a store to see an item but then makes the purchase online after finding a better price via smartphone.

The idea behind geofencing is to target consumers when they are nearby—and the promotions can get hyper-local, like beaming a special on umbrellas to people within a 10-mile radius during a rainstorm, or touting a markdown on aisle 6 when a customer is walking down aisle 3.

But adoption by shoppers has been spotty, retailers report, underscoring a fundamental imbalance of power when it comes to mobile. While consumers have figured out to use smartphones to retailers’ disadvantage by checking the prices elsewhere, chains are still fumbling around for a way to use mobile phones to boost sales.

Some 15% of respondents to a recent survey said they use their mobile phones in stores to compare prices to online-only rivals, according to market research firm Forrester Research. But fewer consumers use their devices in ways that could be beneficial to brick-and-mortar retailers: 8% of respondents said they used their phones to “check in” to stores, and 7% said they used phones to learn about in-store promotions or events.

Customers are becoming more comfortable with using coupons that arrive on their phones. More than 3.4 billion mobile coupons were redeemed in 2011 globally, according to Juniper Research.

Meijer Inc., a Midwestern chain of supermarkets, now uses sensors in its stores to offer customized information and virtual coupons via mobile phone. Customers who prepare shopping lists online can open up the retailer’s app inside the store, and the app reorders their list based on their location in the aisles, speeding up the shopping process. Coupons and weekly specials also appear, said Josh Marti, chief executive of Point Inside, a company that helped develop the technology.

“The question, beyond trying to get a defensive scheme against showrooming, is how can these retailers capitalize on that mobile activity?” says Mr. Marti, who said numerous larger retailers are working on similar programs. “What you have to do is engage with those customers in the physical domain.”

via Geofencing: Can Texting Save Stores? – WSJ.com.


About Bob Innes

Who am I and what I do best! I am a skilled Sales and Marketing team player known for performing behind the scenes miracles that increase base distribution, improve customer relationship management, exceed annual sales volume,and profitability for Consumer Packaged Goods companies. And I've been doing it for over 15 years. My successful contributions include such clients as Kraft Foods, Mars, Bumble Bee Foods, Unilever, Johnson and Johnson and SC Johnson, and JM Smuckers.


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