Cashing in on location-based technology: Will consumers use it this holiday season?

by Affect Team on November 17, 2010

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Earlier this month, I attended the inaugural Geoweb Summit in Brooklyn, which billed itself as “bringing together pioneers from different aspects of the emerging geoweb industry.” Having kept up on my industry reading, I went into the event having been recently barraged with news announcing the availability of new location-based services and applications, mixed with reports that no one was using them.

The morning of the summit, Pew Internet released a study that found that only 4 percent of online Americans use location-based services. It was no surprise then that the main topic of conversation during the summit was where the market lies for location-based services – namely, who wants to use them and how.

While much has been published debating best practices for leveraging location-based services for marketing, here are a few key take-aways from the summit that resonated with me:

  • Make it interesting, useful and tailored to me. The founder of 8Coupons.com, a neighborhood deal aggregator, underscored that successful location-based marketing relies on giving consumers the right information at the right time and place. And it must be highly personalized.
  • Don’t re-create the wheel. Placecast, which offers a location-based marketing platform, instructed that for retailers to find success with location-based technology, they should view it as one more channel for their current marketing strategy, and not to create a new, standalone campaign.
  • It’s not for everyone. Smaller retailers may not be able to eat the steep acquisition costs that location-based marketing often requires. To grab a consumer’s attention, a deep discount often needs to be extended, which can translate to losses for the neighborhood coffee shop. Location-based marketing is not a profit maker, but rather a tool to build your database that higher volume, big box retailers are better able to swallow.

Black Friday… or Mobile Saturday?

With Black Friday looming and retailers furiously spending marketing dollars, things are looking a little brighter in the location-based industry. This morning, a new study issued by WiFi provider JiWire was announced. It found that 9 in 10 WiFi users will access location-based apps during the holiday season. Reporters who cover the study are rightly skeptical, noting that this is a very high percentage in light of other recent reports like the infamous Pew study. JiWire does emphasize that its audience is made up of tech enthusiasts.

The bottom line is that as location-based technology matures, it looks like retailers are beginning to discover what consumers want. I think Steve Smith hit the nail on its head in yesterday’s Media Post article on mobile technology and shopping – first and foremost, consumers want to know about deals and specials. It’s all about extending useful information to the shopper at the right time and place. In the end, we won’t know for sure if, and how, consumers will use location-based services for holiday shopping until after the ball drops. I know I’ll be keeping and eye on the results.

{ 2 comments… read them below or add one }

Jenn 11.18.10 at 2:33 am

Hey Elissa – have you tried out http://geotoko.com ? We use them at our agency and have seen a good ROI. Just passing it along, since you mention placecast. Cheers

Elissa Ehrlich 11.18.10 at 10:10 am

Hi Jenn – thanks for the suggestion, I’ll check it out.

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