Report: 71% of Retailers Now Leverage Location Data for Advertising

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Continuing its slow but steady climb toward the main stage, it appears that geolocation targeting has finally reached a tipping point. According to a new report by WBR Insights and Future Stores, sponsored by the location data technology firm Blis, nearly eight in 10 retailers now partner with third-party data providers to collect geolocation data, and 71% are leveraging location data for advertising purposes.

Blis’ interest in looking at the digital-to-physical strategies of more than 100 retailers was shaped by the nearly nonstop conversations about the supposed death of retail, explains Gil Larsen, VP, Americas, at Blis. The report was designed to help Blis understand what brands are doing and what their needs are, particularly having to do with mobile location and behavioral advertising solutions.

“It is more important than ever that retailers think about the right way to improve their value to the customer—not only [at] the right time but the right place,” he says.

“Retailers must expand their digital marketing strategies to include location services so that they can widen their reach and guide buyers in-store with relevant messaging.”

More than 100 senior managers, directors, VPs, SVPs, and c-suite retail leaders at companies with at least $250 million in annual revenue were surveyed in the report, with findings that indicate that retailers using a location strategy have greater lift in retail footfall. WBR Insights and Future Stores also found that location-based digital initiatives are helping retailers convert customers with customized content at precise moments.

“Most of the retailers surveyed are already leveraging location data techniques and finding success,” Larsen says. “Retailers using location strategies and tactics are reporting a greater lift in footfall traffic and a higher customer conversion rate. Most retailers are using re-targeting strategies, marketing automation, proximity tools like geofencing and beacon technology, and in-market consumer targeting.”

More specifically, 68% of retailers said they use retargeting to guide visitors to physical stores and 55% said they use proximity tools like geofencing and beacon technology.

Although the report found that the majority of retailers include a digital-to-offline component as part of their customer journey, 70% rate their performance as merely adequate, in need of improvement, or poor. Just 2% of retailers said they would rate the performance of their digital strategies for guiding visitors to physical stores as “excellent.”

One way to explain these findings has to do with the resources being dedicated to location data. According to the report, nearly half of retailers (46%) have either fewer-than-10 or 0-person teams dedicated to in-store localization efforts, and 57% of retailers have no documented plan.

The report also includes anecdotal stories from major brands like Columbia Sportswear Company and AAA. Using location insights, AAA has been able to pinpoint when members are near one of their locations and deliver timely content, which provides value to consumers and increases the efficiency of marketing dollars.

Extrapolating from the results of a survey like this can be challenging, but Larsen says he believes that data shows that the future is ripe for marketers to optimize on location-based strategies. To that end, Larsen says Blis has introduced a cost-per-visit model where brands pay based on when consumers go to the desired location. He sees this sort of approach as the future of location marketing, as it is a transparent method that minimizes risk for brands.

Results showing that 70% of retailers already report a positive outlook on their location strategy performance also paint a positive picture for the future of location data in retail.

“Impactful brand marketing is no longer just about reaching the right person at the right time; the content of the message also needs to be tailored for the right place,” Larsen says. “Location information allows retailers to go beyond generalized understandings of consumer behavior and develop quality, right-time and -place, personalized experiences.”

Stephanie Miles is a senior editor at Street Fight.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.