The 3 Critical Steps That Will Boost Geocommerce Adoption

Apple’s new product debuts are known to be ‘must-see TV’ for gadget geeks. We all get excited about the BIG announcements, such as the iPhone 5S or the iPad Air. But as is typical with Apple, there are smaller debuts tucked into these presentations that trigger very big waves in other, less consumer-focused industries. The most recent example of this is iBeacon.

iBeacon is Apple’s latest attempt to insert themselves into retail services (they continue to stop just short of a full payment solution, but they’re inching ever so close). Basically, iBeacon utilizes Bluetooth Low Energy (BLE) to connect consumers and their iPhones with main street (retailers) via small beacons placed throughout the merchant’s brick-and-mortar store. This technology enables the merchants to send push notifications with hyper-relevant messages based on where someone is located (down to the aisle), lure them into the store and promote certain products/services.

A customer is near the denim section? “All jeans are 10% off today!” is the type of message that may pop up on a phone. And it works: According to RetailMeNot, 51% of consumers admitted they would be more likely to buy an item, even one that isn’t from their preferred brand, if they received a mobile coupon while in-store.

Geocommerce is hot, and Apple isn’t the only one trying to get into the game. Early in September 2013, PayPal unveiled their take on it called “Beacon.” Beacon focuses more on hands-free payments, but the concept is the same: outline a location with electronic fenceposts that talk back and forth with a consumer's phone to enable instant commerce away from the POS. And companies like Qualcomm and their Gimbal platform are enablers with their SDK to power developers and new start-ups wanting to play in the space, or those simply wanting to deploy their off-the-shelf Beacons as well.

But, once again – we arrive at a familiar crossroads – the technology has been developed, there is a bit of early adopter consumer interest, investors are beginning to line up, and yes - a handful of merchants have begun to test. Yet, like mobile wallets, geocommerce systems are likely going to face a healthy adoption curve.

Here is my take on three things that need to happen for these systems to speed that curve and propel the consumer adoption that will be critical for long-term success:

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1. Focus on merchants

Consumers won’t adopt until merchants are on board, and merchants aren’t interested if consumers aren’t signing up. The primary solution to this chicken-and-egg scenario is simple: merchants are critical players at the table to any new payment or marketing solution, whether push or pull. They must be engaged early on.

2. Get smart about deals

The days of throwing out a 50% offer aren’t over, but many merchants have learned hard lessons taught by a deal gone awry. Marketers and merchants have to work together to craft the right offer based on merchant goals.Example: a merchant with an average ticket of $75 promotes a threshold offer, $20 off a $100 purchase.

This delivers a larger basket size than the merchant’s average sale and can be targeted to those people who haven’t already spent more than a few minutes in the store, or haven’t even entered the store yet.

These are the types of messages consumers are looking for, and in turn they’ll deliver incremental, profitable business to the merchant.

(For our perspective on smarter coupon campaigns, check out Dave Bona's series of posts here)

3. Lower the adoption barriers

It must be simple and cheap for merchants to adopt the technology. That means no expensive hardware, no complicated procedures that require extensive associate training, and no negative disruption to the consumer shopping experience. The simpler the setup and execution, the quicker the merchants and consumers will see the benefit. (I’m personally encouraged by Qualcomm’s price point)

There are other considerations that will play a key role in the adoption process, such as the responsible collection and use of data, but the provider that places as much focus on building merchant content as technology building will be in position to set the adoption curve.

Geocommerce gives marketers an opportunity to place the right messages and deals in the hands of the right customer at the right time. Everyone involved in this industry needs to be working closely with merchants to understand their goals and the behaviors of their target audiences. Delivering superior value to consumers that turns into incremental profits for merchants is the simplest way to load the funnel for long-term geocommerce success.

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Topics: Customer Incentives, Mobile Coupons, Access Development, ibeacon, mobile engagement, geocommerce, kelly passey, mobile payments, mobile commerce, customer loyalty, paypal

Written by: Kelly Passey

Kelly Passey is the EVP of Business and Product Development at Access Development.

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