Going Offline: 5 Ways to Use Location Intelligence for Online Business

September 17, 2018

Online retail sales now account for over 10 percent of total retail sales and are projected to grow to 17.5 percent of total retail sales worldwide by 2021. In the U.S., online mainstays Amazon and eBay together account for over 55 percent of online retail sales. Yet, traditional brick-and-mortar retailers, including Walmart, Home Depot and Best Buy, are increasingly capturing their share of online purchases as they build out their own online shopping experiences. At the same time, Amazon is venturing into brick-and-mortar retailing with its acquisition of Whole Foods. As consumers take their shopping online, and the line between online and brick-and-mortar retailers blurs, what can retailers do to remain competitive?

For online-only retailers, one answer may be in becoming a bit more like their terrestrial counterparts. Online businesses typically hold a wealth of information about their customers’ online activities but have little insight into who their customers are in the real world. Although online businesses have ready access to products purchased, pages viewed, and time spent on site, there is little opportunity to build a personal rapport, or to understand consumer behavior outside of past purchases. Aggregated, pseudonymous location data helps to close this gap and lets businesses of all kinds better understand their customers based on what they do in their daily lives.

Going Offline: 5 Ways to Use Location Intelligence for Online Business

What exactly can online businesses uniquely do with this information?

1. Get to Know Your Customers Better

Where people go and what they do in the real world gives us clues about their interests, lifestyles and passions. Using location intelligence, online retailers can augment their CRM systems with location-derived personas that reflect actual customer behavior, and reliably identify, for example, new or expectant parents, pet lovers, foodies, athletes and more. These location-informed insights let marketers design marketing programs and product promotions that better align with, and even complement, your customers’ lifestyle and key interests.

2. Improve Online Personalization

Chances are your online business is already using purchase data to personalize the customer experience on your website. But that personalization can be further refined with the addition of information about who your customers are in real life. Gravy’s location-derived insights make it easier to distinguish between a customer that’s a new parent, or someone who is buying a gift for an expectant friend. Or, use location intelligence to confidently recommend future purchases based on past, deterministic consumer behavior.

3. Discover Offline Competitors

With brick-and-mortar retailers investing more in their online shopping experience, online-only retailers must now consider both their online and offline competitors. Where do your customers shop in the physical world, and how do their store choices overlap with your offerings? When might they have purchased from you instead? By understanding where your customers shop in the real world, online retailers can better determine which local businesses are their brick-and-mortar competition, measure foot traffic trends, and even set the stage for conquesting campaigns.

4. Identifying Opportunities for Co-Marketing

By understanding the places and events that your customers visit, online retailers can also identify promising co-marketing and sponsorship opportunities. Do your customers often visit gyms or day spas? Frequently visited places that are complementary to your business might serve as distribution channels for your collateral or products, and even host sponsored events or pop-up shops. Considering a sponsorship for a local summer music festival? Location intelligence can help you choose the festival that attracts more of your target customers, helping you to maximize any return on your investment.

5. Pinpoint the Ideal Sport for a Brick-and-Mortar Presence

If your online business is considering a physical store, location intelligence can help to identify where to set up shop. Understand overall foot traffic patterns and volume, and the audience composition for a geo-fenced area before making any real estate decision. Using these insights, companies can better assess whether a location is a good fit with their customer base and corporate strategy. Does a short-listed store location attract people that look a lot like your best customers? If so, it may be a great area for your store – and if not, reaching the right kind of customer at that location may prove a challenge.

As more consumer spending takes place online – and more retailers become omnichannel in nature – retailers will need new and innovative ways to capture consumer mindshare and discretionary income. Location data that reveals where people go and what they do there provides valuable intelligence about consumer behaviors that can help any brand plan, predict and act. For online retailers, location-informed insights help to connect the dots between online activity and offline behavior, delivering a fuller, more complete picture of the customer and their buying journey. While we don’t know what 2019 will bring, we do know that insights derived from location intelligence and data should be front and center for strategic planning.

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