*Ping* the bag you want is on offer at the store beside you

Ms Lisa Libretto, a stay-at-home mum who has little time to shop, says she has been enticed to buy a handbag after her phone alerted her to a discount on it when she was close to a store.
Ms Lisa Libretto, a stay-at-home mum who has little time to shop, says she has been enticed to buy a handbag after her phone alerted her to a discount on it when she was close to a store.PHOTO: NEW YORK TIMES

Retailers are banking on location-based mobile marketing to sway shoppers’ buying decisions

NEW YORK • During a pre-holiday shopping trip to New York, Ms Lisa Libretto received an enticing alert on her iPhone: an offer for a US$25 (S$35) discount on a Vince Camuto handbag that she had coveted on the retailer’s website.

“If my phone is alerting me to the discount or some information about items I might like, that will totally pull mein,” said Ms Libretto, who lives in Connecticut.

The alert arrived at an opportune time, pinging as she neared the entrance of the Vince Camuto store. It cemented her decision: She would buy the purse after all.

But the timing was no coincidence. The app that she had downloaded from ShopAdvisor used beacon technology, a new addition to location-based marketing, to pinpoint her whereabouts before sending the discount.

When you give people a marketing message about something that they actually want, in a location where they can act on it, that doesn’t feel like an ad or an annoyance.

MR SCOTT COOPER, ShopAdvisor’s founder

“I hope it’s a technology more companies will use,” she said. Ms Libretto, 44, an artist and stay-at-home mother with two young sons, has embraced online shopping. “My time is so short that when I do get to shop, the alerts are fantastic,” she said.

Retailers are acutely aware that despite the popularity of online shopping, nearly 92 per cent of retail sales are made at brick-and mortar locations, so a technology that will help drive shoppers into stores is certain to attract attention.

And with the ubiquity of smartphones, now owned by two-thirds of Americans, retailers and technology companies have spent the last few years trying, with modest success, to find ways to combine a shopper’s desires with innovative mobile apps, to get legions of consumers into stores.

Now, ShopAdvisor, a four-year old company based in Concord, Massachusetts, has added a wrinkle to location-based mobile marketing that it hopes will be the breakthrough retailers are seeking. GPS-based mobile apps are not new and geo-fencing, the ability to create a virtual perimeter around a designated location such as a shopping mall, has given retailers the ability to send push alerts to prospective customers nearby.

But beacon technology can pinpoint a customer’s location so precisely that a retailer knows when that shopper is lingering in the shoe department or browsing through lingerie. ShopAdvisor, which offers its own mobile shopping app and specialises in creating multichannel mobile shopping platforms for media companies, as well as retail brands, has incorporated beacon technology in a novel way.

With the aim of driving shoppers into stores, ShopAdvisor incorporates data analytics that filter a shopper’s preferences and provide a way for retailers to send personalised alerts to consumers who have downloaded a brand’s app, offering discounts, highlighting sales and providing content such as product reviews that might instantly sway a buying decision.

“We’ve had at least three years of heavy-duty location-based marketing under retailers’ belts,” said Mr Kim Ji Young, senior vice-president for Ansible, the mobile division of the Interpublic Group, the global marketing company. “Everybody has the same tool and targeting alone can only take you so far.”

What makes the ShopAdvisor approach enticing, Mr Kim said, is that it not only precisely locates a shopper in a store, but also provides personalised creative content from that retailer to that shopper on the spot. Offer that shopper a 20 per cent discount on some new black pumps she has been eyeing, along with a positive review from a popular fashion magazine, and a purchase is far more likely.

Shoppers who have downloaded apps from various retailers in the last three years have been flooded with repetitious push alerts that have become like robocalls and tend to be annoying. For proximity mobile marketing to be effective, it requires something more.

“When you give people a marketing message about something that they actually want, in a location where they can act on it, that doesn’t feel like an ad or an annoyance,” said Mr Scott Cooper, ShopAdvisor’s founder and president. “It feels like a service to them.They tend to respond to it.”

The company’s revenues come from monthly fees paid by clients such as media companies and retailers. It also draws revenue from retailers that subscribe to its proximity marketing service.

Despite the early success indicators, however, analysts remain wary. “Beacons are very new and these are very small examples,”Mr Kim said.

“This is a crowded and very competitive space, and everybody wants a piece of what ShopAdvisor is doing. Because of privacy issues as well as not wanting to freak people out, nobody wants to be the first to do something dumb with a technology that powerful. The results so far are good, but they are still in the very early stages.”

NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on January 07, 2016, with the headline '*Ping* the bag you want is on offer at the store beside you'. Print Edition | Subscribe