Proximity marketing is expected to grow at a compound annual growth rate (CAGR) of 1.6% through 2021, expanding well beyond retail applications to benefit other businesses such as gas stations, restaurants, movie theaters, and hotels. Companies that now begin to make strides in understanding and integrating proximity marketing trends into their current strategic models will be at the forefront of their industries.
How Proximity Marketing Is Used In Retail
As an industry, retail was one of the earliest adopters of beacon technology. There are countless ways to use proximity marketing in a retail setting:
- Collect consumer data: App engagement rates can increase by as much as 400% when retailers take shopper preferences and behaviors into consideration.
- Service improvements: Click-and-collect (transactions that are purchased online and picked up in-store) strategies can be streamlined through beacon notifications that can be used to direct shoppers to their pickup zones.
- Omnichannel marketing: Apps can alert customers about items in their digital shopping cart or on their wishlist becoming available at a nearby store. Customers may also add items to virtual shopping baskets or scan and pay using a mobile wallet.
- Special offers: Customers can earn reward points and/or offers when they are nearing particular aisles, entering changing rooms, or engaging with displays. Shoppers can also gain access to VIP events when they complete certain activities.
- Foot traffic: People walking near a store can receive targeted ads, offers, and flash sale notifications during slow periods, allowing brands and retailers to stay top-of-mind and increase engagement.
Proximity Marketing Trends per Industry in 2020: What to Expect
As far as the retail industry is concerned, the use cases for proximity marketing are sure to expand. However, there are other business areas that are expected to adopt proximity marketing trends in 2021 in modern ways.
Gas Stations/Convenience Stores
Gas stations and convenience stores are starting to look at ways to maximize business strategies with proximity marketing. Consider the following examples:
- Virtual rewards: Coffee is a popular purchase at each of these store types. Send out mobile punch cards for “Buy 9 Coffees, Get 1 Free” to increase sales and express customer appreciation.
- Category sale increases: Gas station convenience stores can increase sales in different product categories like snacks, candy, soda, or alcoholic beverages by sending out in-app promotions through a shopping rewards platform like Shopkick. Engaging in-app content can build awareness of reward-earning opportunities.
- CASE STUDY: A nationwide convenience store partnered with Shopkick to drive sales of low-consideration products. By rewarding shoppers for finding these products at-shelf and scanning their barcodes, Shopkick increased in-store product engagement from 380 scans per month to 3,000 scans per day. Beverages saw a 180% increased purchase conversion rate compared to the Shopkick average, and 73% of users said that Shopkick rewards would influence them to make similar purchases at convenience stores in the future.
- Data collection: Collected information can help determine local brand preferences.
- Partnerships: Local businesses like restaurants, shops, and hotels can work together with gas stations/convenience stores to cross-market.
- Competitive marketing: Beacons can be placed near a competing gas station to let locals know of better prices nearby.
Given the lowered cost of beacons and high creative potential, proximity marketing has grown more attractive to restaurateurs from big chains to small mom-and-pop shops. Consider these trends:
- Marketing messages: The most obvious use of beacons is to push out deals and flash sale notifications to nearby consumers who may be deciding where to dine.
- Tailored menus: You can create a pared-down, customized menu for your VIPs based on what they’ve ordered in the past or send tailored push notifications when you have an ideal meal on special.
- Food delivery: Expand your reach by marketing food delivery services to locals.
- Traffic alerts: Keep customers informed how busy the restaurant is before their arrival, with estimated wait times adjusted by the hour and alerts sent out during slower times.
- Custom pricing: Offer incentives to people who have never been to your restaurant before or give loyal customers a free meal after their seventh time dining.
- Data: Gauge traffic to improve staffing efficiency.
- Payments: Expedite bill checkout by allowing patrons to pay from their phones using a secure, branded micro-payment site.
Movie theaters can use proximity marketing to enhance personalization with:
- Interactive games: Keep moviegoers busy while they wait for the show to start with fun, engaging games that improve the value of the movie theater’s brand.
- Data: Movie buff profiles can provide information on age, gender, frequency of visits, use of third-party apps, movie preferences, and concession purchases to enable a more tailored experience and help theaters decide which movies to host in the future.
- Education: Beacon-triggered messages in the lobby can deliver supplemental information from movie previews and still photos, to details on the actors and presale tickets.
- Cross-marketing: Food, beverage, and shopping offers are particularly engaging to the moviegoing crowd, especially as people look to prolong a date or “make a day of it.”
Aside from the obvious use of promotional marketing that has become popular over the last decade, hotels are beginning to use proximity beacons for worker safety and staff productivity.
Hotels can also use proximity marketing to achieve superior customer service with:
- Expedited check-in: Check-in push notifications can allow for swift mobile reservation confirmation and digital room key pickup without needing to wait in line at the front desk.
- Navigation help: Beacons work better than GPS to help guests navigate indoor areas. They can easily find their room, the restaurant, or the pool using beacon mapping. Interactive tours can be uploaded to give guests a personalized experience.
- In-room controls: Bluetooth technology can give mobile devices control of the lighting, thermostat, TV, and room service ordering system using proximity-sensing beacons.
- Loyalty programs: Beacons can also be programmed to define micro-location alerts, offers, or promotions specific to guests’ location in the hotel. For instance, someone already at the bar can receive a promotion on another drink, or guests entering the hotel after a long day can be invited for free refreshments.
- Upsells: Guests can easily upgrade to a new room or receive discounts on future stays with beacon marketing messages upon entering the premises.
- Personal concierge: Suggest where guests can pick up mementos of their trip, grab a nearby bite to eat, or experience highly-reviewed local attractions.
- Check-out: Guests will receive a push notification for check-out on their last day to avoid the hassle of waiting in line while toting luggage.
- Data: Learn how long guests spend at different locations throughout the hotel, such as the pool, bar, and restaurant, to help gain insights into where to best allocate the budget.
Smartphone users have taken a strong liking to proximity marketing as part of their shopping experience. Its attributes enrich their lives with value, whether in the form of a helpful suggestion, personalized recommendation, convenience-adding feature, or special reward offer.
The companies that incorporate these trends into 2021 and beyond will not only see financial success, but will also see stronger customer relationships form that will lead to long-term loyalty.
Looking for a partner that can help you seamlessly integrate the latest proximity marketing trends into your overall strategy? Shopkick is a mobile rewards app that has successfully worked with retailers and brands on numerous occasions to help achieve their omnichannel marketing goals, and our roadmap includes expanded capabilities for a number of other industries. Read our success stories and contact us to learn more about how you can benefit from a Shopkick partnership.
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Image courtesy of Jacob Lund