Optimizing Location-Based Targeting Through Predictive Insights
There's no disputing that in order to appeal to modern consumers, retailers must employ an “addressable marketing” approach — i.e., reaching a consumer contextually in the way that the consumer wants to be spoken to, with an offer that’s compelling and timely. Brands have used location-based marketing as a means to meet these conditions and to help shape the best possible marketing message. Traditionally, location-informed targeting used singular elements of shoppers’ past locations, or historical data, as context.
With the e-commerce landscape more competitive than ever, it’s vital for retailers to evolve this idea by taking a smarter and more holistic approach. By looking at a consumer’s entire shopping history, brands can determine where customers are going to be next.
The Winning Combination
Many brick-and-mortar stores struggle to engage in a meaningful way with their customers because they lack comprehensive knowledge of how shoppers have interacted in the whole universe of shopping experiences. To succeed today, it’s imperative to understand the entire retail environment, beyond the walls of a single store. This same ecosystem of data and insights is what informs the e-commerce outlets with which brick-and-mortar stores are competing. By using location-informed data, these retailers can access this intelligence and, in turn, enhance marketing effectiveness to drive sales.
If retailers don’t take into account the context of a customer’s physical location before trying to communicate with them, the message is wasted. For example, a mom at a department store dealing with her four young children won’t stop to watch a video advertisement on her phone. So although marketers have typically relied on the device (phones, tablets, apps, etc.) as a channel to reach and identify a shopper, it’s now time to look beyond the screen — which just happens to be what the consumer is looking at in that moment — and focus on the audience instead. What’s really important is to understand what the consumer is doing and where they are at that same point in time.
The key to success with this practice is the need for identity resolution, or accurately identifying the same shopper across online and offline touchpoints. The ability to connect a person with their historical and offline data informs what they like to buy, and where and how they bought it. By knitting together all the consumer’s insights definitively and with a great degree of accuracy, retailers are then able to more accurately predict future buying behavior.
The Next Generation of Location-Based Targeting
Just a few years ago, marketers were experimenting with the idea of location-informed marketing; today, it’s a burgeoning pillar of a retailer’s overall marketing strategy. As the industry becomes increasingly comfortable with data-driven marketing, the time is ripe for retailers to stop relying solely on transaction history. Instead, they must harness the combination of this historical data with the benefits of identity, geographical location and timing of purchases in order to effectively influence purchase decisions.
As an industry, we have every indication that consumers, especially the younger cohort, will soon be intolerant of ads and messages that don’t communicate information that’s directly relevant to them. Location intelligence is part of the marketing toolbox, and as marketers navigate consumer preferences and choices, it will be progressively more important to use all available information to make communication as contextually relevant and effective as possible.
Rick Erwin is the president of audience solutions at Acxiom, a data foundation for the world's best marketers. Tim Jenkins is the CEO at 4INFO, an ad tech platform that helps brands reach very precise audiences across mobile devices and desktops, and determine the success of their campaigns based on actual in-store sales lift.
Related story: How Retailers Can Leverage Location-Based Marketing in 2017