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Geotargeting drives key brand engagements even when stores are closed

While much of the talk around geofencing has focused on driving foot traffic with an ad delivered to a nearby customer, a growing number of retailers are recognizing opportunities with geofencing after stores close or when a location has shut its doors for good.

The trend points to the growing sophistication of mobile marketing, with brands increasingly looking beyond simple location to take into account other factors that can drive more contextually relevant experiences for consumers. For example, by geofencing stores that have recently shut down, retailer Ashley Stewart hopes to retain customers by driving them to another nearby outlet or to its mobile site.

?Geofencing - or location based targeting - can be an effective tool when stores close,? said Pehr Luedtke, CEO of Spotzot, San Francisco. ?Retailers can geofence an area around the closed store and alert consumers to nearby locations, and even provide special deals to those consumers if they go to another store.

?It's a way to maintain loyalty,? he said.

Customer retention
Ashley Stewart recently announced a Chap. 11 bankruptcy restructuring plan that includes the immediate closure of 27 stores and a likely sale of the company. The chain has 168 locations across 24 states.

Holding onto existing customers is critical for the retailer during this period of upheaval, with location-based targeting on mobile one way it is looking to retain them.

The retailer is currently working with Spotzot on a campaign that will launch in the next few weeks in response to the fact that some stores have been closed.

For the campaign, Ashley Stewart will put a geofence around the closed stores and leverage Spotzot to deliver coupons to nearby customers and direct them to the closest open Ashley Stewart outlet or online to its Web site.

?We want to geofence customers who shop at those stores and use Spotzot to get customers to shop at the nearest location or to transfer onto the Web so that we don?t lose that customer,? said Larry Gray, CRM director at Ashley Stewart, Secaucus, NJ.

?That is a very big project for us,? he said. ?It is very important to us.

?It helps us to reduce our churn and customers lapsing from the business and it gives us the opportunity to send new customers into the store that remains in the market.?

Better than direct mail
Ashley Stewart is also considering delivering coupons to customers nearby competitors? stores in a strategy known as geoconquesting.

Ashley Stewart has been ramping up a coupon-driven mobile advertising program over the past six months with a several different providers.

Mobile couponing is becoming increasingly important for the retailer as direct mail prices continue to increase.

?It is a very important strategy,? Mr. Gray said. ?It is a regular part of our couponing.

?We are reducing our direct mail with the postage rate increases, we are reducing that end of it and really pushing on this end of it,? he said.

?It is definitely more efficient than our direct mail ? I would say two to three times more efficient. It is probably maybe a quarter of the budget and then there is may be 50 percent that is direct mail and then there is email that rounds things out.?

Situational targeting
1800Flowers is also trying to use geo-targeting in more contextually relevant ways.

When a recent geotargeted campaign delivered to users within a mile of 100 franchise retail locations revealed significant click-through rates between midnight and 4 a.m., when stores were closed, the ads were tweaked to include a click-to-call button and a buy online button.

The results proved to 1800Flowers that geotargeted ads are not only effective when retail stores are open.

The retailer also gained a competitive advantage since other brands were not likely tailoring their efforts towards consumers who were out and about that late at night.

The lesson from these examples is that using geofencing to deliver ads should not simply about a location but needs to also take into account a user?s context.

However, geotargeting during off hours is likely to be more limited simply because there will be less traffic near a store during these hours.

?A great use case would be for a closed store to send a message to the customer saying the store was closed, but ?you can browse our inventory/order from us at our website? and/or point them to a different location,? said Janna Badalian, marketing director at MobileSmith, Raleigh, NC. ?This keeps customers from having to walk up to a door only to find the store is closed, as well as provides an alternative to drive sales.

?Retailers haven?t fully embraced geofencing yet, since it is so new,? she said. ?That said, people are coming up with new use cases for it all the time, and not just for retailers either.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York