Consumers can now shop wherever and whenever they wish. Gone are the days of needing to visit a physical location — consumers are instead always on, and ready retailers need to be prepared at any time of the day to facilitate a purchase.
But the rise in e-commerce doesn't mean that consumer behavior in the real world should be overlooked. In fact, the rise of mobile devices, which has enabled much of the e-commerce revolution, also provides value for retailers in another way.
These devices also act as an anonymous way to gauge offline consumer behavior. For e-commerce, this can generate powerful insights, improve personalization, and allow online stores to be able to adapt to consumer changing environments and needs.
We are going to look at how e-commerce companies can use location to transform their strategy.
What is location data
Location data is the aggregated data points from smartphones that provide insights into how people move and behave in the real-world.
This moves beyond the simple IP geolocation that traditionally is used in e-commerce. Mobile device location data is far more accurate and provides a more detailed snapshot of consumer behavior.
This location data is then aggregated to provide significant scale insights into audience movement and consumer behavior.
These insights are unique from online and digital insights as they are based on real-word movement. This is a great indicator of intent and consumer behavior.
Uses in e-commerce
For e-commerce and retail, the center of the experience is no longer the store (online or offline). The consumer is now at the center of the shopping experience. This means that e-commerce brands need to focus on the individual needs of the consumer.
E-commerce companies have the technology to build a highly custom solution for their customers, from the personalization of the shopping experience to delivering the best promotion to the right customer at the best moment.
The reality is that despite this need for detailed consumer insights, e-commerce companies are primarily focused on consumer's online behavior rather than how they behave in the real world.
This is where location based marketing can be effective for e-commerce brands — mobile device location and behavior can assist across many different areas. Let's have a look at these in more detail.
Segmentation, targeting and getting offers to the right customer at the right time
E-commerce companies can use location as a way to identify consumer behaviors. These behaviors can be used to segment audiences into smaller segments that share similar characteristics.
Examples can be customers that visit specific stores, such as a flagship store. Another method of market segmentation involves looking at devices that visit competitor's real-world stores and building audiences based on this. These consumers can then be targeted with promotions that aim at pushing them to buy at your online store or physical retail environment. This is effectively stealing offline shoppers and converting them on your e-commerce site — think, "we offer this product cheaper online at our store."
The segmentation of consumers allows you to be smarter in how you convert e-commerce customers. For example, if you have detailed behavioral insights into a portion of your customers, you can better target your messaging to these customers to boost conversions or other important metrics.
Behavioral targeting for e-commerce is useful because it allows you to reach consumers with the right offer or promotion at the right time. For example, you can build a segment based on your customers that you know regularly visit electronics stores. Targeting these customers with similar products in your weekly newsletter will be more fruitful than a generic list of products.
Engagement and personalization
This same behavioral information can be used to boost engagement and personalization. Identifying interests and behavior allow you to create an e-commerce experience that is personal to each customer based on how they move and behave in the real world.
Creating a dynamic and customized e-commerce store is something that most e-commerce sites do already. Using location-based behavior is a method of going further to deliver an improved e-commerce experience. These offline insights, when incorporated into a personalization strategy, will drive engagement and improve conversions.
This goes beyond merely delivering the website in the local language, but using detailed behavioral information to provide a fully personalized e-commerce experience. This could be from pre-filling click and collect details based on the user's frequent store visits to dynamically loading product categories based on where the consumer regularly visits in the real world.
A great tool to achieve this is Bunting’s Personlize solution. Combining it with behavioral data allows e-commerce sites to deliver the right content to the right customer at the best time.
Omnichannel — driving visits to store and vice versa
Attribution to store
For e-commerce businesses with an offline store presence, connecting the dots between online and offline activity is an important task.
It is difficult to close the attribution loop. It's especially challenging to understand how online ad campaigns convert in physical stores. Sometimes surveys and other feedback-driven solutions try to do this. Another solution is loyalty, which ties purchases to a single identity across online and offline shopping behavior.
However, this isn't always simple or effective. Not all customers will sign up for this kind of scheme. Device behavior is a powerful way to fill these gaps and measure the effectiveness of online advertising and marketing on physical store visits and behavior.
This same data can help to understand consumers across multiple touchpoints and attribute sales to different sources and move customers more effectively along the path to purchase.
For example, a customer might become aware of your store via an ad on a physical out-of-home advertising screen or billboard. After this, they might visit your store and use the in-store display to identify some products that interest them and try them on. Next, they might purchase on the e-commerce store.
Without an omnichannel view, this customer's path to purchase might look like a direct website purchase. But in fact, there was a complex omnichannel process that guided the consumer to purchase.
Location data can help to achieve this holistic view of consumer behavior, in the same way that it is being used to transform the out-of-home advertising industry. The more information e-commerce businesses have around how consumers behave and interact with the real world, the easier it will be to understand which elements of their marketing strategy are working and converting customers.
As well as this understanding, cross channel interactions allow businesses to understand the effect of each touchpoint in more detail and then deliver a more personalized and engaging experience at each stage of the consumer journey.
Understand your user profiles — create more detailed user segments
In a world of consumer centricity and people-based marketing, it has never been more important to understand who your customer is, how they behave, what they want, and how they want to consume it.
Supplementing online profiles with offline behavior is a powerful way to take customer insights to the next level. Better insights can help with several key areas for e-commerce businesses:
A deeper understanding of consumers can help to inform future products or whichever category of product your customers are interested in.
For example, you can use location insights to see where your customers spend time. Your consumers might over-index in visits to coffee shops. Based on this, you could offer more products in this category, or even provide crossover offers that include more products in this category.
Product matching can also help to combine promotions and other offers to understand which combinations are likely to convert users.
When thinking of your customer personas, site behavior can give a narrow view of an individual. Complementing this with real-world movement allows you to create richer consumer profiles and personas.
These behavioral personas can inform decisions across the marketing process, and form campaign targeting, optimization, and even site copy and personalization.
The richer these personas, the easier it is to scale your e-commerce sales and find new customers that are more likely to convert and buy your products.
Building lookalike audiences based on outdated customer profiles can lead to wasted ad budgets. Location data is real-time and current. It's a great indicator of consumer intent, and your audience can be easily overlapped with new location-based audiences to scale your e-commerce store to new customers.
How to activate location data
To activate location data, you need to find a provider that is accurate and has scale. E-commerce sites can deploy location in a first-party way if they have a mobile e-commerce or shopping app.
Third-party location data can be used to achieve the same goal by integrating the data into a centralized data governance center or customer management solution, such as a CRM. This can be used alongside data acquired from web scraping, for example.
Each use case provides different setups. Location data is centralized around a mobile advertising ID. This is the identity that can be stored in CRMs or other data systems. It can be tracked across the web and sent into the programmatic advertising stack.
Ultimately, location data is a powerful tool for e-commerce businesses. It can help provide much more detailed insights into current customers to deliver a more personalized e-commerce experience. It can help to build new audiences based on real-world movement and connect the gap between e-commerce sites and physical stores.