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Analyzing the effectiveness of location based marketing

Posted on by shopkick

Analyzing the effectiveness of location based marketing

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The way gurus talk about location-based marketing, it sounds like the panacea for the retail industry as we know it. And it might be⁠—with geofencing, beacons, proximity marketing apps, and augmented location data, we have the potential to target customers more specifically than ever before, in the very locations where they’re likely to be most receptive. Location-based marketing seems like selling umbrellas in Times Square during a rainstorm.  

However, by taking a more nuanced look at location-based marketing strategies, we’re forced to admit that there are significant challenges involved⁠—namely, the massive problem of consumer buy-in. With technology as it stands in 2019, push notifications and in-app messaging are the primary tools that execute on location-based campaigns. Without customer engagement in these specific areas, even the strongest location-based marketing strategy could fail. 

If your brand is preparing to invest further in location-based technology, be prepared to meet these inherent challenges head-on. The studies explored below illustrate how successful these strategies can be for retail brands across multiple categories⁠—and by pursuing innovative solutions, you can ensure the effectiveness of location-based marketing in producing a positive ROI for your brand. 

The True Effectiveness of Location Based Marketing

Though location-based technologies are still relatively new on the market, research is beginning to show their success. One particularly glowing report from Factual and Lawless Research surveyed 700 location data buyers⁠—536 of which were consumer brands⁠— and found that a vast majority were succeeding with location-based marketing strategies. Key stats from that report are highlighted below:

84%

of brands saw higher customer engagement when using location-based marketing strategies.

86%

of companies achieved customer base growth from location-based strategies.

89%

of companies saw increased sales when using location-based marketing.

When asked how these companies used location-based data to reach these success metrics, 65% responded with “ad targeting” as their highest priority. Other high-ranking applications included location-based offers, customer experience/personalization, and audience engagement. Surprisingly, heavily-discussed categories like beacons, weather-based ads, and event marketing came out near the bottom. 

All in all, these statistics paint a very promising picture for brands considering the effectiveness of location-based marketing. Based on the potential for success, it would make sense for every retailer to experiment with location-based tools⁠—and to prioritize solutions and applications that lessen the inherent challenges of this channel.

Surpassing the Challenges of Location Based Marketing

Push notifications are the most valuable player in the game of location-based marketing⁠—but they’re also the biggest challenge. Push notifications have been found to increase app engagement by 88%. But a significant number of users choose to disable notifications in an effort to preserve privacy, productivity, or digital minimalism. How can location-based strategies succeed when only a percentage of smartphone users opt-in? 

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The Problem

According to a study from Accengage, only 43.9% of iOS users opt-in to push notifications. (The rate is much higher for Android users, who are automatically enrolled.) Beyond the point of download, the same study found that one weekly push notification inspires 10% of users to disable notifications and 6% to uninstall the apps altogether. 

This could be attributed to the fact that, according to research from PushCrew, 31.37% of surveyed users don’t like getting push notifications at all. Of those who do, the vast majority prefer them to come from social media only. 

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The Solution

In order to maximize the effectiveness of location-based marketing strategies, brands have to find a way to get a wider audience to opt-in. The answer is to launch app touchpoints that add value far beyond what consumers normally get from retail brands. 

Mobile proximity rewards apps provide a unique solution to this problem. Rather than slashing prices or offering coupons, an app like Shopkick gamifies the shopping experience and makes errands more like rewarding scavenger hunts. Users opt-in for the adventure, and are continually rewarded for engaging with targeted content in store aisles. When customers are engaging with a proximity marketing app regardless of push notifications, you know you’ve won.  

Successful Location-Based Marketing Campaigns

Getting customers to accept a push notification when they are within a quarter-mile of your store is powerful. Incentivizing them to complete in-app video ads and actually pick up your products in store aisles? That level of engagement is priceless.

The following brands partnered with Shopkick to enhance their location-based marketing strategies and achieve game-changing results.

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Purina

Purina used the Shopkick app to send proximity messaging to users when they entered Target stores, which effectively kept their brand top of mind during the shopping trip. The brand then followed up with targeted content that inspired consumers to break habitual shopping patterns and trial their products instead. 

85% of shoppers reported that Shopkick motivated their decision to purchase, resulting in a significant increase in incremental sales for Purina.

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Rimmel-London

Rimmel-London also capitalized on the power of proximity messaging to drive customers into Walmart, Target, Ulta, K-Mart, and drugstore locations. Direct product engagement through Shopkick’s trial-in-aisle program helped Rimmel-London shine through the clutter of the cosmetics aisle and gain new customers. 

Through their campaign with Shopkick, Rimmel-London stole 14% of market share from their next competitor and earned a 5:1 ROI. 

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Household Cleaning Company

A leading household cleaning company used the Shopkick app to launch proximity messaging that greeted and rewarded customers for entering retail locations at Kroger, Lowe’s, and Bed Bath & Beyond. In-app promotional content drove users to scan products in store aisles and purchase bundles for even bigger rewards. 

Shopkick’s promotional unit days brought 92% increased sales and 232% increased foot traffic, with 58% of customers motivated to purchase by in-app content. 

According to projections from Bia/Kelsey, location-based ad spending is slated to reach $38.7 billion by the end of 2022⁠—growing from a mere $17.1 billion in 2017. Based on the growing array of location data applications and technologies available on the market today, your company could spend an incredible amount on location-based marketing tools alone. Make sure that you’re allocating spend wisely and investing in innovative solutions that will mitigate the challenges of this channel and further your brand’s long-term business goals. 
The proliferation of location-based marketing has only just begun. Join our partners and get on board today with a solution like Shopkick. Contact us to learn more about the effectiveness of our location-based marketing tools.

How retailers are using these 8 innovative shopping experiences to boost consumer engagement

Posted on by shopkick

How retailers are using these 8 innovative shopping experiences to boost consumer engagement

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Some people say the retail industry is in crisis. They point to stores closing, sales dropping, and customers who are trading in their loyalty for the convenience of an online shopping cart. Others see things differently. Retailers are facing significant challenges—but these challenges are better seen as catalysts for unprecedented innovation. For decades, brick-and-mortar retail remained the complacent king of local economic activity. Today’s technological innovations have sparked a long-overdue revolution. 

Retail brands have to adjust, adapt, and re-evaluate their priorities in order to maintain and expand a customer base in such a market. As a result, stores are now being designed to increase consumer engagement. Retail is no longer about convenience, cost-reduction, or quality. The industry is now dedicated to creating innovative shopping experiences above all else. 

The following examples show how smart retailers are stepping up to this challenge, creating exciting omnichannel experiences for customers, and disrupting the industry as we know it.

#1: Augmented Reality

AR technologies broke onto the retail scene back in 2016 and have been rapidly expanding ever since. These tools offer an exciting new experience for customers, who get to experiment with new products from the convenience of their smartphone screens. AR has shifted the way customers purchase clothes, furniture, beauty products, and even cars (as you can see below).

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Innovations in beauty

Brands like Sephora, L’Oreal, MAC Cosmetics, and Estee Lauder are taking advantage of AR tech specifically designed for beauty brands. These tools create virtual try-on experiences using a combination of machine learning and facial recognition technology.

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A new kind of showroom

Jeep released an app titled Jeep  Adventure Reality which uses AR tech to help customers “explore every possibility” by creating their own custom vehicles straight from their iPhones. With 360° views, you can walk around and even go inside your ideal Jeep without ever setting foot in a car dealership.   

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Try before you buy

Target now lets customers try out potential furniture purchases through AR functionality in the Target app. Customers can click straight from a product page into an AR module that lets customers see how the new furniture would look in their space, easing the journey to conversion. 

#2: Frictionless Checkout

Self-checkout is standard—but “no checkout” is the future. When Amazon Go launched their first register-free stores, customers poured in by the thousands to experience a new level of convenience. A combination of computer vision, machine learning, and sensor fusion technologies created Amazon’s “Just Walk Out” formula, which automatically tracks and charges customer purchases and eliminates the need for a register, cashier, or queue. Frictionless shopping is the experience all customers crave, and the retail industry is moving rapidly to accommodate.

#3: Shoppable Social Media

Retailers have been marketing items extensively across social media platforms for years—particularly on image-heavy platforms like Instagram—and consumers have long been clamoring to purchase items seamlessly from within those platforms. Today, Instagram hosts its own checkout platform, YouTube offers a product carousel option, and Twitter provides “Buy Now” functionality. Burberry was one of the first major retailers to take advantage of shoppable social technology, but they certainly weren’t the last. Today’s customers now expect innovative shopping experiences to extend from stores to their social feeds and beyond.

#4: Innovative Rewards Apps

Loyalty programs are also getting a facelift in today’s retail revolution. While sales, discounts, and coupons are still some of the most common strategies used by retailers to entice returning customers, many brands are innovating with rewards apps that don’t eat up profit margins. Proprietary loyalty programs can now be combined with third party apps like Shopkick, which turns an everyday shopping trip into a rewarding and exciting scavenger hunt. Innovative rewards apps like Shopkick drive sales, increase market share, and boost customer engagement for a wide variety of retail brands, including the following:

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Stand out from the crowd

Rimmel London used Shopkick to drive customers to their product line and fight the clutter and noise of the cosmetics aisle. Their highly successful trial-in-aisle engagement strategy resulted in 14% market share taken from a competitor and a 5:1 overall ROI. 

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Nail the big moments

Leading up to the Super Bowl, Tyson Foods used Shopkick to drive foot traffic to their products in Sam’s Club stores. By offering rewards instead of discounts, the brand was able to secure greater in-aisle engagement numbers (57,000, to be exact), sell over 14,000 units, and impact over $193,000 in sales in just two months. 

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Try something new

Georgia-Pacific encouraged customers to engage with their new Dixie Ultra® Deep Dish Plates by using Shopkick’s rewards app. Shopkick drove customers to seek out the new products in aisle and incentivized actually picking up the product—an experience which ultimately drove incremental purchases from 50% of new shoppers.

#5: Small Format Stores

Small format stores are rapidly changing the face of retail going into 2020—especially those that are storefronts for digital native brands. Bonobos and Modcloth both recently opened innovative small-format stores without carrying inventory. Customers try on the clothing and simply have their purchases delivered later. More recently, the small format store has extended beyond the pop-up shop and the niche retail space. A large group of retailers, including Target and IKEA, are heeding customers’ call for small format shopping experiences. Both of these brands launched small format stores this year with limited inventory and significantly increased customer engagement.

#6: In-Store GPS

Mobile connectivity has solved one of the greatest customer pain points in big box stores: they don’t know where to find things, and they can’t find an employee to ask. Home Depot launched in-store GPS functionality with voice and image search to lead customers directly to their target items straight from their mobile app. In a similar vein, the Lowe’s Innovation Lab recently experimented with a pilot project for LoweBots—AI-driven customer service robots that can answer questions and guide customers through the store. Talk about an innovative shopping experience!

#7: Subscription Services

Companies like Birchbox and Fab Fit Fun may have launched back in 2010—but they’re booming now thanks in part to aggressive influencer marketing strategies and the public’s desire for innovative shopping experiences. Subscription services aren’t just for beauty brands anymore. Gwynnie Bee, Stitchfix, and thredUP all offer apparel options, while companies like BarkBox and Dollar Shave Club are making the rounds in more surprising categories. Even HP offers an Instant Ink subscription service to alleviate the hassle of purchasing refills. Subscription services combine the elements of personalization and surprise—both of which are both highly lucrative in today’s retail market.

#8: Experiential Concepts

Experiential retail is a valuable extension of the small-format trend, and has grown so popular it deserves its own mention here. Concept stores have cropped up in the last year from brands as small as Flowerboy Project all the way up to household names like Nike and Adidas. The goal: to provide such an innovative shopping experience that thousands of customers will be attracted into the store just to witness it for themselves. There is nothing more exciting in today’s retail market than the experiential concept store—and executives are behind it as a money-making strategy for retailers looking to expand into new markets. We’ve highlighted some groundbreaking examples below.

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Care for a nap?

Casper entered into the brick-and-mortar retail scene with a powerful concept store, which housed a collection of small “houses” where customers could take naps and test their mattress selection. Never in the history of retail have more customers walked through a mattress store “just for fun.”

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Think multiuse

House of Vans London is an example of a concept store that’s more concept than store, and infinitely more popular because of it. The location houses cultural events, bars, workshops, a cinema space, and the only indoor skate park in the entire city of London—which is free and open to the public. Vans now benefits from the crowds of tourists and locals who flock to London’s hottest skate destination. 

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Opposites attract

When Capital One launched their first video advertisements for Capital One Cafe, some people called them crazy. Wiser onlookers saw the biggest innovation in the banking industry since the advent of the ATM. Capital One created a space where community events, lunch meetings, and finance coexist—bringing in new customers by the thousands.

Altogether, these innovative shopping experiences aren’t just desperate attempts to hang onto fleeing customers. They’re the future of the retail industry. Together, we’re creating a world where stores aren’t mindlessly transactional buildings—they’re cornerstones of community, exploration, innovation, and discovery. By combining cutting-edge technology and a desire to offer unique and exciting experiences, retailers have the opportunity to participate in (and profit from) the rebirth of this industry.  
Shopkick is an award-winning shopping app that’s changing the face of retail rewards for brands and retailers across the United States. Our partners use Shopkick to create truly innovative shopping experiences in stores and offer customers a rewarding path to brand loyalty. Contact us to learn more about how a partnership with Shopkick could help your brand rise to the challenge of today’s changing retail market.

eBook: 6 Trends Dominating This Year’s Holiday Shopping Season

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The holiday shopping season, a time in which consumers plan to out-spend every other spending event throughout the year, is fast approaching. In order to find out how, when, and where consumers plan to shop this holiday season, we polled over 29,000 Shopkick users.  Continue reading “eBook: 6 Trends Dominating This Year’s Holiday Shopping Season”