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The rise of e-commerce during the pandemic demonstrated the profound impact of digital experiences on the retail industry. Online shopping has become integral to the consumer experience. However, the role of physical stores remains critical as well.
By the end of 2021, e-commerce’s share of total retail sales accounted for only 15% of sales industry-wide. Currently, 80% of all shopping still happens in stores. The truth is that e-commerce and in-store retail make a good team. The ICSC’s latest “halo effect” report has shown that a new store drives a 6.9% boost in online sales, while a closed store reduces online sales by 11.5%.
There is a clear link between maintaining a brick-and-mortar presence and driving online sales. Retail chains need to steadfastly allocate resources to improve customer engagement, enhance loyalty programs, and optimize in-store operations. Geofencing emerges as a prime tool for addressing these retail challenges.
Improving customer engagement for retail efficiency with Roam.ai’s geofencing API
According to the latest data, people spend an average of 4 hours and 37 minutes on their phones daily. This might not come as a surprise. We live in a digital age where the smartphone has become an all-encompassing component of daily living. We use them to complete payments, check calendars, text friends, consume media, and take photos. Beyond these functions, smartphones have enabled a one-to-one direct relationship between retailers and customers through social media, messaging, and apps.
Most major retailers have a mobile app, which has proven advantageous in creating a loyal customer base. Between 2020 and 2021, Nike gained 70 million members thanks to its app offering everything from free athletic guidance to special membership deals on Nike products. This is just one example of how the one-to-one relationship between brand and consumer has thrived, offering a platform for online shopping, direct communication with support staff, and increased customer engagement.
However, to truly improve customer engagement and retail efficiency, geofencing adds a dynamic layer. Location data provides crucial context that can make any marketing campaign more relevant to customers. While you may know what a customer prefers to buy online, you risk engaging them at the wrong time and place when crafting your campaigns. Geofencing’s virtual boundaries around real-world locations give your marketing efforts the advantage of reaching customers when they are most likely to engage—with their location serving as a strong indicator of intent.
At Roam.ai, we offer a geofencing API that allows you to reach customers with effective location precision. With access to over 16 million points of interest (POIs), our API enables marketers to create niche campaigns and targeted advertising with accurate polygon boundaries. These polygons are especially effective for large areas like malls, stores, or competitor locations, allowing you to set geofences that drive better engagement and conversions. For example, setting geofences around competitor locations lets you send promotions through push notifications, guiding customers from competitor locations to your own.
Refining loyalty programs for retail operational efficiency
Mobile apps have transformed the way retailers approach loyalty programs. Direct communication channels have strengthened customer relationships and improved operational efficiency. Take Sephora, for instance, with its Beauty Insider club—a rewards program offering birthday gifts, discounts, and free samples. The program allows Sephora to send personalized communications and recommendations, which has proven highly effective in fostering customer loyalty.
Another reason these programs are so popular among retailers is the data they generate. A loyalty program serves as an internal database for understanding customers and building profiles based on their interests and behaviors. This is further enhanced by geofencing and location-based marketing.
Roam.ai’s geofencing API enables retailers to use location-based promotions to enhance their loyalty programs by rewarding customers for visiting specific store locations. A location-triggered push notification with a tailored discount on a favorite product is the type of reward system that fosters loyalty. Starbucks, for instance, has a reward-based system that uses location-triggered promotions to ensure a consistent flow of foot traffic to its stores.
The benefits of this approach extend beyond building loyalty. Retailers can also collect insights from location data, such as visit frequency, dwell time, or purchase behavior. A unique advantage of Roam.ai is its integration with Echo Analytics’s GeoPersona product. This combination allows the geofencing location data to enrich customer profiles for more effective audience segmentation. By analyzing this mobility data, retailers gain a deeper understanding of customer behaviors, interests, and preferences, allowing for the creation of highly personalized campaigns.
Optimizing retail in-store operations with geofencing
Not everyone will notice out-of-home advertisements that populate billboards, windows, and walls of city centers, shopping streets, and public transport. Some people may sit in a café opposite your store, completely unaware of a sale or product launch—even if they are loyal customers. In today’s environment, where customers have seemingly endless options, driving in-store traffic can be challenging. Given the strong relationship between physical and online stores, converting traffic is more important than ever.
Customer engagement efforts and loyalty programs powered by geofencing increase conversion by driving foot traffic to your store. The various location-based campaigns available ensure a steady stream of foot traffic. For instance, using customers’ locations to send reminders to redeem gift cards or coupons when they are near one of your stores adds a personal touch. These efforts help customers feel connected to the brands they interact with, ultimately encouraging them to visit your stores.
Effectively reaching your customers, while respecting their privacy, has made geofencing a popular tactic among successful global retailers. It has brought digital marketing into the offline world without taking away from the in-store experience. In today’s competitive retail landscape, geofencing solutions have proven instrumental in transforming the customer experience.