In this chapter you will read:
• Why SoLoMo consumers are local
• Their characteristics of local behavior
• About Geosocial networking
• New trends in GeoLocation services
• How to use GeoSocial applications
• About online payments
• How to use coupons
• How to use beacons
• About the benefits of geolocation services
Introduction
Firms need to think Local. Of course, national brands have a bigger budget to spend than what a small business has, but consumers nowadays look for local businesses that can fix their problems and fill their needs. Affinity and proximity create the kind of top-of-mind awareness that drives sales and create a guaranteed success. In this chapter the authors will analyze the second characteristic of the SoLoMo consumer, which is “staying local.” Consumers are submitting more and more location data, with the use of geolocation techniques (Eugen et al., 2014). Social networks, such as Foursquare and Google Places, use these data of information in order to connect and coordinate users with local people or events that match their interests in the highest possible degree. In this chapter the authors are going to extensively analyze the following topics: new trends in geoLocation services, geosocial networking, use of geolocation applications (such as Foursquare) to check in, and finally payments, beacons, and coupons.
By using SoLoMo strategies firms could convince people walking to their store simply by offering a check-in deal on Facebook or Foursquare. Basically consumers are getting attracted to the store by the offer (i.e., Foursquare), but at the same time the store is connected in the mind of the consumer with a trusted online platform. If consumers trust an online social media platform and see an offer or a discount in that platform, subconsciously they trust the business.
Keep in mind that using a SoLoMo strategy is like using an integrated system. The different elements cannot maximize the value of the SoLoMo strategy if they are implemented separately. Small businesses cannot afford to underestimate the role SoLoMo plays in today’s purchasing decisions. Its ability to tap into networks of customers is probably the greatest unused marketing opportunity in existence.
SoLoMo Consumers Are Local
The Local marketing is the final element of the SoLoMo (Social, Local, and Mobile) marketing strategy. Consumers are adopting new technologies and social media interfaces that allow them to behave in a different way from how they did in the past. Nowadays consumers have more power. The new consumers do not waste time going through the traditional distribution channels through which their level of control was extremely low. Now, they are experimenting with new channels through which their voice can be heard. The key search engine companies have realized this new era, and they are trying to adopt it.
For example Google, which is the most prominent search engine, is changing their search algorithm in order to emphasize more on local results when it comes to search queries of consumers. Google did this because they recognized the new trend of the consumers which is to take action when they search for something over the Internet, so the results are now based more on local solutions. Through the new features of Google plus, the consumers now have great power when it comes to decide on a product or service that has been consumed by their friends on Google Circles. Through Google+ consumers could check trusted reviews all across Google. They could find out about new places close to them and can decide based on the recommendations of their friends. Google gives the opportunity to the consumers to give precise ratings and provide with comments in order to help other consumers to make fast decisions.
Although Google is important, firms need to make sure that they do not overlook the other search engines and social platforms. It is extremely important to use consistent and complete information. Another company that publishes crowd-sourced reviews about local businesses and is extremely popular is Yelp. Yelp had an average of approximately 139 million monthly unique visitors in the third quarter of 2014 and more than 67 million local reviews have been posted. According to a Nielsen survey (2014), 80% of the people who use Yelp visit the website before spending money, and 93% of those say that visiting Yelp leads to a local purchase. When the consumers were asked to rank the factors that help them find local business they replied that the leading factor is the reviews (44%), followed by ratings (26%), number of reviews (17%), and reviews written by someone they know (14%). The most common businesses that were searched on Yelp.com, according to the same study, are the restaurants, followed by beauty and spa, food, nightlife, home and local services and professional services. Other businesses commonly searched on Yelp included hotels and travel, auto, arts and entertainment, health and medical, real estate, and financial services.
The top three motivations for consumer to use location-based apps are receiving a coupon or deal, to learn more about the location, and to meet up with friends. Firms should try to incorporate all of these three elements in their apps. They should design their campaigns in order to offer an overall experience and not just another coupon or offer. An example of that realization from the firms’ side is Foursquare. They tried to reposition and rebrand the app and tried to separate the check-in and the location-based searching, because they realized that not all consumers want to check in wherever they go but they want to use the benefits of the geosocial networking. Foursquare’s recent separation of these two features was very smart as they can now target those who enjoy checking in and those who want to search within their location without to worry about privacy issues. The rebranding clearly came from the new needs of the consumers.
Characteristics of SoLoMo Consumers’ Local Behavior
The SoLoMo consumers have some unique characteristics and that is why they have to be treated in a different way than the ordinary consumers. Firms need to realize the huge potential that technology is offering. By understanding these unique characteristics and by engaging them into a solid strategy that could create an unforgettable experience to the consumer. The Social aspect drives traffic (online and offline), the Local aspect drives action, and last but not least the Mobile aspect drives the opportunity.
As opposed to just a few years back, nowadays consumers have at their disposal an immense amount of information just by using their smartphones. They could easily check at any time and no matter where they are reviews and ratings about the products or services that they are interested in. They could also compare prices from different online and offline retailers; in order to find the lowest price, they could check the inventory and then proceed to the actual buy. If they want, they could also share their retail experiences and potential purchases with their friends through social media platforms.
The SoLoMo consumers, due to their unique nature, could be characterized as hyperconnected shoppers who constantly demand a more personalized experienced. Since they are sharing every single bit of information with the retailers, they expect in return to receive products that meet their exact needs and wants. Retailers need to understand that for the information they receive from the consumer, they should give them back something extremely personalized. That is something that most firms have not realized yet. They believe that consumers are sharing their information just because they want occasionally to receive a discount and that is more than enough to them. With the amount of information that is received, firms are able to perform marketing communication campaigns in a more efficient way and are able to target their audiences with a quite high success rate.
Without doubt, the most effective strategy in order to get, keep, and grow your customers while increasing their satisfaction and thus customer loyalty is to always be available to your customers. One of the main characteristics of the SoLoMo consumers is that they constantly seek that availability from the retailers they are interested in. They want to be able to interact with their favorite retailers 24/7. And the retailers must be there for them. Another characteristic of the local behavior of the SoLoMo consumer is that they constantly seek a way to interact with the retailers, not only through one social media platform.
SoLoMo consumers are using more than one platform in order to shop. That means that the retailers need to constantly engage with the consumers through various platforms and they should be consistent when they do that. That means that they should have the same type of information in every communication channel. For example, when the firm is mentioning the address of the shop, either through a pinpoint in their website or through Foursquare, they need to make sure that these two location match 100%. In many cases simple but yet crucial information, as the address of the shop, could confuse the consumers. Furthermore another characteristic of their local behavior is that this new breed of consumers is more acceptable to new mobile apps and SMS campaigns. However, localization is a low-hanging fruit opportunity for optimal SoLoMo strategies, by creating relevant assortments, marketing campaigns, and offers for specific stores and geographic areas. Retailers must not interact with the consumers if they do not have to offer something relevant to their needs.
Locality maybe one of the most difficult aspects in terms of implementation. It is the most difficult, simply because in an online environment the retailers are asked to provide a physical location. As much as we try to offer an online experience we must face the truth! Local stores are where the most important experiences will always happen. Even the world’s largest online retailers have started realizing this and have begun experimenting with pop-up physical stores. The physical experience is going to close the sale. That sale of course might not take place in the physical store, but it could take place online. In those stores consumers can touch and feel a product before making a purchase, or even ask questions about the product to one of the employees. Brands that really want to stay in touch do so across all channels, not separately within each channel.
With the use of geolocation technology every company is able to obtain information in real time and locate a mobile device (which is connected to the Internet) on the map with quite high level of accuracy at any given point in time. The information of the user could be collected through various ways such as GPS technology and cellular data information, credit card transactions, tags in photographs, and postings on social networks. It is an undisputable fact that geolocation technology has become the basis of every location-aware application on a mobile device.
From the firms’ perspective the geolocation data could be used in many different ways. They can be adjusted to the needs of the firm, and they could serve as starting point of the interaction between the consumer and the firm. The communication touch point becomes virtual. The localization of delivered content and the enforcement of access, which is based on geographic location, is definitely one of the main elements that firms are using nowadays. Along with this overflow of information some main security issues arise. Questions like “What type of information should be collected?” or “How often it should be collected?” are issues that puzzle not only the firms but also the users. There is an antithetical point of view from the part of the consumers. They want to have as much information as they can get, but at the same time they do not want to share their own information with other users. Therefore, it is imperative for businesses to be aware of issues that have to do with privacy, in order to be in position to use the geolocation technology in the best possible way.
Firms have in their disposal two main ways to gather geolocation data, and these are the “active way” and the “passive way.” In the active way the collection of geolocation data is performed through the GPS chip and/or through the cellular data. In the passive way the collection of geolocation data is performed through other third-party geolocation service providers or through a correlation with stored databases obtained from purchase records and user-provided information.
In order for firms to be able to build a sustainable relationship and maximize the value of each consumer they need to understand the privacy issues that users are having. They should respect their boundaries when it comes to the use of location-based information. The message that comes through geolocation services should be delivering the maximum experience to the user. That means it should be relevant and engaging in order to increase the possibilities of creating a well-established relationship that will lead to increased profitability. If a firm is overdoing it with location-based messages, then the user is going to start ignoring the messages even if they are targeted to a very specific group. The key of the success is for the firms to be transparent and to make the consumers understand the ways they are going to use the information that they share with them.
Geolocation data generally are used for three purposes:
1. Georeferencing is basically used by the firms in order to obtain the location of a user and to put that information in a map. That information could be viewed live, or it could be stored for future reference.
2. Geocoding is when information about a place stored on a map, and then this information is shared with other users, for example, when a user is trying to find a hotel that offers very specific facilities.
3. Geotagging, is basically adding geographic information to usually a photograph and being able to send that photograph with all the information attached to it.
Geosocial networks are definitely winning grounds in our everyday life, but still consumers are not ready to use their full potential. By now consumers are used to build connections to other consumers online. They feel quite comfortable to connect with someone they have not met in the past and to share information over the Net. Consumers do not even think twice before they share their information to strangers. Of course doing this in real life is something completely different. Consumers, due to their introvert nature, are still not ready to start conversation with somebody who they tracked, through their app, in the couch next to them.
A few years ago social media interfaces were asking their users to write down their status and what they have been up to. This level of interaction is considered to be outdated. Nowadays the users could easily upload the place they are into and share it with their group of friends. In this way the users could let their friends know where they are, or to find places that people that they know have recommended. At the same time they can use this service in order to remotely check in at clubs, bars, and restaurants. So basically geolocation is the process of finding, determining, and providing the exact location of a mobile phone or any other networking device. It enables device location based on geographical coordinates and measurements.
The GPS of the phone is using satellite data in order to calculate the exact position of the user. When a GPS signal is unavailable, geolocation apps can use information from cell towers or even from Wi-Fi networks. In this way the geolocation app on the users’ phone can spot the position fairly accurately. The main problem with the GPS technology is that it does not work accurately inside buildings. For example, inside a shopping mall geolocation apps cannot make use of GPS technology. In that case users should check in manually from within the app interface. Eventually, though, more-advanced GPS systems should increase the accuracy of geolocation positioning inside buildings.
The geolocation apps are designed, on the one hand, to report the location of the user to other users, and, on the other hand, they associate real-world locations (such as restaurants and events) to the users’ location. Since the majority of the SoLoMo consumers use a smart mobile device, more and more data are being collected and then shared to other SoLoMo users. Geolocation applications could also run in a desktop, but you do understand that as they run in a mobile device they create a far richer experience because all the data change according the change of the location of the user.
New Trends in Geolocation Services
Sometimes when consumers use an app on their smartphone, the app asks from them permission to identify the location of the phone. Actually for some apps that is imperative and they do not work otherwise. When a person uses an app on their smartphone, the app may ask for permission to access the location data of the phone. In most of these apps (especially in the free versions) they are lots of ads that all belong to the advertising network close to location of the phone. By using this method your firm could easily target through advertising a very specific group of consumers. This extremely targeted local advertising message is tailor-made to the consumer’s special interest and location. This hyperlocal marketing strategy is used by Amazon. Amazon segments the market by location and sends e-mails to user, by pointing out offers close to their location.
In the USA, the majority of national brands are expected to increase or maintain their local marketing budget for the next few years. This shows that firms have actually started realizing the real potential of the SoLoMo strategy. Especially small firms need to take advantage of the new location-based trend and thus skyrocket their profits. Of course small firms do not have the resources to compete with big corporations, but the only thing they need to do is to make sure that the consumers are aware of every single place (online and offline) where they could interact with the firm. Many times firms are concentrating only in the online touch points and forget all about the offline. Only the synergy of both online and offline could create a holistic approach for the SoLoMo consumer.
Of course not all online media could be used with an extreme ease. In many cases firms need to seek the help of an expert in order to optimize their online marketing assets so as the search engines locate the content of the website. With this technique (search engine optimization) the firms maximize the potential of their online content. During the last years most of the firms have established an online presence. In many cases firms are not paying attention to the mobile friendliness of their website. The website should be able to adapt when it is accessed by a mobile device (tablet or a smartphone), because the SoLoMo consumers are using only this type of devices when they perform their online research and online shopping.
Of course being local means that the firm needs to be aware of “what is out there.” They need to be extremely focused when it comes to the monitoring of their brand over the Internet but as well as the monitoring of the consumer. Through the various social media channels the firms should be able to gather all the information about their brands. Good comments or bad comments should be equally welcomed because they provide useful information about the future success of the brand. Of course the firms are not performing brand and consumer monitoring only for their brand but also about the market and the competition. It is an unofficial type of market research which is updated constantly. This could be accomplished through the use of free online tools like Social Mentions or even Google Alerts. Another way for firms to have a more successful local marketing approach would be to experiment with location-based services such as Yelp, Foursquare, Tinder, Gowalla, Groupon, Google Places, etc.
The new trends in geosocial networks expand in every sector, since all firms no matter their size have realized the necessity of using this method in order to approach their consumers. A very recent trend in geosocial networks is that of “food sourcing.” When consumers enter a restaurant they could not check in only themselves but also their orders. They could also choose the extra ingredients they desire in their food and award points for every selection. In order for restaurants to support and enhance this new trend they award their customers by giving them discounts and coupons.
Another trend in geosocial networking has to do with “freelancing networks.” These networks serve the purpose of allowing users to find new job opportunities. Users set up a profile, and they are allowed to connect with future employers and employees. Mood sourcing is becoming a must in between the geolocation application. With mood sourcing the user could check in not only his location but also his mood. In order to do that they use prefixed emoticons or text (Feeling Happy☺). “Stuck” and “Pocket Life” are two examples of mood sourcing geosocial networking. Pocket Life also has integration with Facebook through an app and has its own social networking features.
Firms have realized the real potential not only of online shopping and the benefit that they add to online personality of the brand but to the offline as well. For that reason they should take advantage of the “social shopping.” With this geosocial networking service users are able to create their own unique profiles and collect information for different brands they find online and offline. Usually when a user buys or sees something that has already bought or would like to buy, they post it on a social media platform (Facebook or Instagram) in order to check the reactions of their friends. With the use of a geosocial network app users are able to download images of the products that they are interested in and share it with their friends, without taking pictures. This is an extremely useful feature and online retailers need to affiliate with geosocial networks, even to the extent of giving commissions to them. Some retailers have installed sensors in their retail shop so they can track if the users are physically in their shop (because they could also check in remotely) and give to those users more offers and promotions.
Another technology firms can use is “geofencing.” Basically by employing that strategy the firm is creating a virtual bubble around the physical location of the business. Within that range people are going to receive notifications if they have opted to receive messages from the firm. By using geofencing apps business could just ping a deal to anyone who follows them on Facebook and happens to be in their neighborhood.
As for how businesses can use location-based apps, the future lays in the development retail mapping. It will be interesting to see how retail mapping will play out, and to see the future of location-based apps in general. As users become more and more accustomed to the use of smartphones, undoubtedly the future of location-based apps will change. More and more users of smartphones are taking them with them on their trips. Especially if the trip is a shopping trip, then an app like Shopkick is going to give them another level of experience. Apps like that are typically location-based rewards program where consumers get points for just walking in the store.
Use of Geosocial Applications to Check in
There are two basic types of location-based services. The first type is the one that is accumulating users’ information (based on location) and provides those aggregated information to other users, and the second type is the geosocial services that let users “check in” to specific locations and at the same time allows them to share that with their friends. In the beginning geosocial apps were using one type or another, but nowadays most geosocial apps combine those two types. With almost all geosocial apps users could “check in” and provide information about their location, and at the same time they could provide information about their activities in the shared location. Seventy-four percent of adult smartphone users get directions or any other type of information based on their current location.
Nowadays users do not want only to know where you are but what you are doing in that place. Foursquare is a perfect example of this duality. Foursquare, as a geosocial service, was originally aiming at users who just wanted to share with their friends their location. The 12% of adult smartphone users use a geosocial service such as Foursquare to “check in” to certain locations or share their location with friends. The system originally was based on collecting points, and every time the user was checking in at the same place, he was earning more points. That was of course serving only the purpose of sharing location. Foursquare very soon realized that users wanted something more than that. For that reason they incorporated into the system real-time location-triggered suggestions, activities, and recommendations that could be shared with friends as long as with other users. For example, when a user enters a retail shop, Foursquare sends a push notification saying “Your friends loved this offer.” These push notifications, since they are coming from a trusted source, are prompting the user the check out the same offer that their friends saw earlier. After the great success of Foursquare almost all major social media incorporated the function of location. Facebook, Instagram, and Twitter have added an optional location services. Some other social media platforms are using Foursquare so that users could send their location and share their information about the place that they have checked in.
The most common geolocation service users are engaging with is Facebook and then Foursquare followed by Google Plus. Instagram and Yelp are not being used so often for “check-in” purposes.
With the increased use of geolocation services, many social media platforms are providing to the user the option to automatically “tag” their updates with the current location they are in. Almost one-third of the social media platform users, in the USA, have enabled this option in their accounts. People of age group under 50 live in suburban areas are more likely to use the new trend of automatic geolocation tagging. These trends show the ascent of location awareness and the role it might play in the life of users as well as the technology companies that are striving to provide more alert-style applications that are able to tell people who and what is near them. Local is a bigger part of the broader social media landscape, and the rise of local services is strongly tied to the increase in smartphone ownership.
On the other hand, over 33% of smartphone users have turned off the location tracking on their phones, or they allow only to specific applications to have access to it. At the same time most of those users have tried to access information, provided by other users, in a geolocation app. These users are concerned about their privacy, but at the same time they would like to have access to other people’s information. This paradox is quite evident in today’s online environment. Users want to remain anonymous, but at the same time they want to have access to the information that other user provides. The numbers do change a bit when it comes to teenagers. Almost half of them (under 17) have turned off the location services on their phones not because they worried about other people or companies being able to access that information but because they do not want their parents to know where they are.
There is a growing trend throughout the world concerning the country of origin effect. Country of origin serves as a cue from which consumers make inferences about product and product attributes. The country of origin cue triggers a global evaluation of quality, performance, or specific product attributes. Consumers infer attributes to the product based on country stereotype and experiences with products from that country. That is something that local stores should take under consideration. For example, there is a big movement which is called “Made in the USA” and is basically urging the consumers to buy local food. Basically the aim of this movement is to make consumers buy food and vegetables that was grown close to their houses.
That is all about the locality of the SoLoMo strategy. Firms should take advantage of this local trend and should provide customers with better local discounts and coupons. That will initiate the first interaction and will probably lead to a fruitful relationship.
Payments
One of the most exciting trends of geolocation services is that of payments. As explained previously smartphones either through GPS or through mobile data could have access to the location of the user. Smartphones recognize the place the users are located in and make the payment without even the users to touch their phones. Any business could accept mobile payments no matter their location by using this type of technology. The most successful app that performs geolocation payment is “Wallet.” Through the app, the smartphone of the user automatically detects the exact location, through a check-in feature, but also in some cases the user could also do a manual check-in. The user could buy a product or a service and through the Wallet integration with the app used by the employees, the payment is done without even taking the phone out of his or her pocket.
Similar examples of this geo payment trend can be found in transportation apps such as “myTaxi.” The app myTaxi recognizes your arrival at the destination previously specified by yourself and undertakes the payment just with a simple confirmation, after both driver and passenger see a confirmation that they have arrived to the destination, as well as the final cost of the ride.
More and more users have started paying by using geolocation services, and it has raised some security concerns. According to big financial and credit firms geolocation not only helps give the consumer more relevant offers but also prevents fraud because it links the payment with the physical check-in of the consumer. Most firms believe that geolocation payment adds an incremental value to the consumers which will be essential for digital wallet adoption to grow. Basically that will happen because it is far easier to tap than to swipe. Of course some researchers stress out the fact that it is easy enough to swipe a physical card so there are no obvious benefits to replacing that with tapping or scanning a phone. So they argue that geolocation payments are trying to solve a problem that does not exist. That is why firms need to focus more on the benefits of the security that these type of payments offer.
Use of Coupons
The location-based mobile coupon services are becoming more and more popular not only to the users but also to the firms since they have understood the full benefits that could have from them. With the use of coupons marketers can upload the store location that participates in any coupon promotions. When users are in close proximity to the store, they could receive notification that will remind them that they have a coupon for that specific store. This type of reminder has proven to be of great success, and it does increase the gross sales of the store. In many cases coupons could include a list of nearby participating locations. In addition to that they could give the consumers very easy access on the information regarding the specific store. From the business perspective, when consumers are using coupons, it is tremendously easy for the firm to track down information about the user.
Undoubtedly location-based marketing offers great potential not only to the consumers but also to the firms. It has been characterized as a way of joining together people, places, and media. Firms are in a position to know the current location of their consumers, and also their history. By taking advantage of such information firms are able to give the users more-relevant, timely content experience. Although firms have this great power, they should not treat their brands carefully. If they collect this huge amount of information but at the same time fail to give back to the consumers a valuable experience, the consumers could just disable the location sharing or could just delete the app.
Use of Beacons
The location technology should be thoroughly understood by the firm. The three great advantages that offers are presence, history, and proximity. These three key aspects enable the brand to deliver a spot-on targeted message in the most relevant time and place and at the same time to achieve extremely high levels of engagement. That is the dream of every marketer!
Since geolocation services do not work in the optimum way inside a building, firms need to deploy the technology of beacons. This type of technology enables firms to track their customers within a matter of inches (microlocation). This offers a great advantage because firms could precisely locate someone within a big retail shop and offer real-time experiences to their customers. Market research companies used to deploy a bunch of researchers inside the stores in order to observe the movements of the consumers. There is no need for those now because consumers willingly provide that information to the firm. Knowing the exact parts of the shop that the consumers are going around provides a huge benefit to the firm. Since they have that information, they can send follow-up messages to a targeted audience.
In addition to the targeted messages, firms could also use microlocation in order to know the exact location of the consumer inside the shop. By doing that, they could potentially guide them through and help them locate products inside the store. Basically they could offer corridor-to-corridor directions inside the retail shop. Their loyalty cards could just pop up along with personalized barcoded coupons that they could use in the cashier scanner.
Benefits of Geolocation Services
The benefits of geolocation for the businesses are applicable to almost every single sector (i.e., retailing, financial services, transportation, etc.). Along with the increased supply of location-based apps (from the firms’ side) there is an increased consumer demand for more apps. The users have understood that they benefit as well by sharing their information with the firm as well as with other users.
One of the main benefits of geolocation apps from the firms’ perspective is that the advertising is extremely targeted. Since the marketing budget is getting more and more shrunk, the marketing managers need to spend it wisely. With the use of geolocation data firms are able to advertise their brands in very specific areas in order to maximize the effectiveness of the communicational campaign. In addition to that firms are able to understand more deeply the needs and wants of the consumers and are able to have an understanding of customer requirements and expectations for their brands.
Another major benefit for firms is that they could customize the content as well as the delivery of a service plus they could achieve a better asset management. Firms could easily gather information about the actual but also about their prospect clients in order to be able to approach them in the future. Other examples for the use of geolocation services could be highway toll devices, vehicle ad hoc networks (that are used for emergency), etc.
Companies do recognize the benefits of “geomarketing” and that of the apps that give discounts and promotions directly to the user, when they purchase a product or a service, providing real-time and extremely valuable information about the customer preferences. Otherwise, in order for firms to acquire such data they would have to invest huge amounts of money in marketing research. Since the budget of the marketing department is constantly getting lower, firms should make use of these services in order to collect data. These data could provide information on key market trends, or integrated into a customer profile to provide a more personalized experience. Without the geolocation services this type of real-time information would be extremely difficult to be collected. On the other hand, users do benefit in a great degree. By using the geolocation service they could receive information that is relevant to their purchases. They could also receive information about offers and discounts in relevant shops that are nearby their location.
Geolocation service is definitely the future of businesses. This type of technology could be used in combination with other online platforms and provide an immense amount of information regarding the consumers. This information will be used in order for firms to create an online as well as offline fully customized experience.