A response to GeoRabble!

May 17

A response to GeoRabble!

A couple of months back David and I spoke at a GeoRabble symposium. It was a great night with a lively crowd. There’s a lot of stuff going on in this great city of ours and GeoRabble is one of them.

GeoRabble’s tweet:

“geofencing” vs. “showrooming”: http://on.wsj.com/L80jOg – looks like bad news for @streethawkapp ? #geonextconf

My answer: not at all!

For one thing the geofenced messages in the cases below are not personalised – so they’re like spam! Our mobiles are small and highly personal devices. Un-personalised messaging feels intrusive. Having said that, a study done by Ji-Wire last February (and other reports I have seen) say that 20% of shoppers will go to a store after seeing a relevant, location-based message. I guess the key to this is ‘relevance’. The creation of footfall for retailers by mobile has got to be higher than almost every other media out there

There’s no doubt that smartphones are causing problems for retailers, including showrooming. There’s a lot of chatter in retail press about it. However, smartphones do a lot of good in-store. These stats are from Google Insights, but they say that 70% of shoppers use their smartphones in-store, 50% to compare prices BUT 50% get promotions and coupons, 42% to read reviews and product info and 32% to search in-store inventory (more applicable to the US)

Smartphones are actually HELPING SHOPPERS TO BUY IN-STORE.

There’s no doubt that the days of using smartphones in retail is in its infancy, and no one thing or solution is a clear winner yet. We feel that we have a secret sauce in our RRR Matching Engine – which gets the right messages to the right people at the right place and time. This will cut through the clutter of de-personalised messages that will chunk up our airways soon.

Thanks for the tweet – allows me to get on my soap box again.

Geofencing: Can Texting Save Stores?


Retailers are trying to make smartphones work for them instead of against them.

Take Maurices. The women’s clothing chain last month started sending promotions to the phones of people who come within a few hundred yards of its stores. Consumers who opt in to the service are sent messages about in-store sales. There is little evidence that sort of marketing actually works, but Maurices wants to give it a shot, in hopes of drawing people to the chain’s bricks and mortar locations.

Some retailers are hoping that “geofencing”–when a customer who has signed up gets within a certain distance of a store, promotions pop into their smartphones–can help slow “showrooming.” Andrew Dowell has details on The News Hub. Photo: Bloomberg.

“If you don’t try, you don’t know,” says David Jaffe, CEO of Ascena Retail Group Inc., the parent company of Maurices.

Retailers desperately hope the technology—called “geofencing”—can be at least one successful response to the dreaded “showrooming,” where a shopper comes into a store to see an item but then makes the purchase online after finding a better price via smartphone.

The idea behind geofencing is to target consumers when they are nearby—and the promotions can get hyper-local, like beaming a special on umbrellas to people within a 10-mile radius during a rainstorm, or touting a markdown on aisle 6 when a customer is walking down aisle 3.

But adoption by shoppers has been spotty, retailers report, underscoring a fundamental imbalance of power when it comes to mobile. While consumers have figured out to use smartphones to retailers’ disadvantage by checking the prices elsewhere, chains are still fumbling around for a way to use mobile phones to boost sales.









Some 15% of respondents to a recent survey said they use their mobile phones in stores to compare prices to online-only rivals, according to market research firm Forrester Research. But fewer consumers use their devices in ways that could be beneficial to brick-and-mortar retailers: 8% of respondents said they used their phones to “check in” to stores, and 7% said they used phones to learn about in-store promotions or events.

Customers are becoming more comfortable with using coupons that arrive on their phones. More than 3.4 billion mobile coupons were redeemed in 2011 globally, according to Juniper Research.

Meijer Inc., a Midwestern chain of supermarkets, now uses sensors in its stores to offer customized information and virtual coupons via mobile phone. Customers who prepare shopping lists online can open up the retailer’s app inside the store, and the app reorders their list based on their location in the aisles, speeding up the shopping process. Coupons and weekly specials also appear, said Josh Marti, chief executive of Point Inside, a company that helped develop the technology.

“The question, beyond trying to get a defensive scheme against showrooming, is how can these retailers capitalize on that mobile activity?” says Mr. Marti, who said numerous larger retailers are working on similar programs. “What you have to do is engage with those customers in the physical domain.”

North Face, the maker of parkas, has been using geofences since 2010 through an app called Shopalert produced by mobile-commerce company Placecast. North Face has put geofences not only around its stores, but around parks and ski resorts, says Aaron Carpenter, vice president of global marketing for the clothing line, owned by VF Corp.

In the two years that North Face has had geofences, though, it has enrolled just 8,000 people. “These programs are all in their infancy,” Mr. Carpenter said about geofencing, social media programs and other experimental initiatives. “But they keep people connected to the brand.”

Some companies are expanding their experiments. Kiehl’s began a geofencing trial last July at its 44 free-standing stores but made the trial permanent this year, says Tory Diamond, director of customer relation management for the skin-care label, owned by L’Oréal SA. The company is now exploring geofencing for Kiehl’s kiosks located in department stores, she says.

The company’s fences range from half a mile in New York and other big cities to two miles in more suburban areas. So far thousands of customers have signed up for alerts, which Kiehl’s advertises at its cash register, social media pages and through its email list. In November, it offered customers a free lip balm for enrolling, causing its numbers to spike, she says.

Kiehl’s limits its texts to three per month, says Ms. Diamond, adding, “Texting is a very personal medium and it can annoy people.”

Yamilky Vincente, a 23-year-old banker visiting a New York store, was keen to sign up. She says she’s a newfound fan of the brand and text alerts would make it easier to find locations.

Write to Dana Mattioli at dana.mattioli@wsj.com and Miguel Bustillo at miguel.bustillo@wsj.com

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