Location Based Apps and Consumers

Written by: Ashley Baader

The landscape of shopping has drastically changed. Online retailers have emerged and allowed people to shop from home and look for the best deals. This practice has severely affected the average brick and mortar store. According to one study, 67 % of people who shop in a brick and mortar store will check their Smartphone to try to find a better price somewhere else and 62% will leave the store and buy the item online at a lower cost (Helgeson). This practice has come to be known as showrooming. Retailers want to eradicate showrooming since it seriously affects their bottom line. Technology has led to the rise of showrooming, but it “can also be the ultimate weapon against it” (Helgeson).

Location technology is one of the methods used to combat showrooming. Using location-based technologies allows retailers to highlight an offer to customers as they comeby the store. This will entice shoppers to enter the store and buy the product there as opposed to buying it online (Helgeson).

The App Swirl has in fact been based on this principle. Swirl uses in-store spying to the customer’s advantage by delivering discounts to consumers (Cohan). Essentially, Swirl promotes discounts by offering them directly on the customers Smartphone who in turn opts in to allow the store to spy on them (Cohan). This can translate, for example, to a customer receiving on their phone a discount on shoes as they walk past the shoe department (Cohan).

Swirl’s creator, Hilmi Ozguc, wanted to take advantage of the fact that “93% of retail transactions still happen in stores and 65% of in-store shoppers have their Smartphone’s on while they’re in the store” (Cohan). What resulted is the creation of an App, which, according to Ozguc “offers shoppers individualized discounts based on their location in a store using Bluetooth Low Energy technology. Consumers who opt-in will get, say, a text delivered to their Smartphone as they walk by the department that sells the item” (Cohan). What’s special about this service is that it is unique and exclusive to each individual shopper. For example, if you have already purchased a pair of shoes you might receive a discount for a jacket (Cohan). The idea is that consumers will be willing to opt-in to this service and be spied on if they get paid (Cohan).

Showrooming is a common occurrence, but retailers can use the consumer behavior that encourages showrooming to their advantage (Helgeson). Apps like Swirl are a great weapon against showrooming because they can provide the customer with what they want at the moment they want it (Helgeson).  

In general, mobile marketing strategies can be beneficial. Smartphone’s are another way to develop mobile marketing technologies since it has the ability to combine, Bluetooth, location-based marketing, and other technologies with web-based and physical store marketing in order to create the optimal customer experience (Azhar and Persaud). Smartphones have become personal devices for individuals and are used for things as varied as business, entertainment and social networking (Azhar and Persaud). Smartphones are also seen as a status symbol that allows people to express their individuality through ring tones, case designs and apps (Azhar and Persaud). These are factors marketers must be aware of in order to develop strategies that engage consumers with their brand (Azhar and Persaud).

Location-based marketing via Bluetooth is very different compared to traditional marketing and internet marketing (Azhar and Persaud). This is because “location-based marketing is very personal, ubiquitous, highly interactive, and very context-specific” (Azhar and Persaud). Brand relationship and loyalty with consumers can consequently be built on the basis of convenience and flexibility (Azhar and Persaud).

In order for mobile marketing to succeed it needs to provide value for both the customer and the retailer (Azhar and Persaud). Value doesn’t necessarily mean to just provide consumers with information and coupons (Azharand Persaud). Instead, customer benefits encompass things like convenience, efficiency, flexibility, and relevance (Azhar and Persaud). Ultimately, when it comes to mobile marketing, the content, format and timing of delivery must be personalized, contextual, and helpful for consumers while at the same time not being invasive (Azhar and Persaud).

 Works Cited

Cohan, Peter. “Swirl Pays Shoppers To Let Stores Spy On Them.” Forbes. Forbes, 10 Jul. 2013. Web. 20 Oct 2015.

Helgeson, Henry. “The Best Weapon That Merchants Have To Combat ‘Showrooming’”. Business Insider. Business Insider, 28 Apr. 2013. Web. 20 Oct 2015.

Persaud, Ajax and Azhar, Irfan. “Innovative and mobile marketing via Smartphone.” Marketing Intelligence and Planning 30.4 (2012): 418-443. Web 14 Nov. 2015.