Location based services is the new marketing tactic that companies are considering in order to forge better relationships with their customer base.
IN this digital age, it’s often assumed that commercial activities, especially in the retail sector, have lost the personal touch. As more and more businesses turn their emphasis towards refining the online experience, there seems to be less attention given to real life encounters at physical stores.
Many consumers have come to regard the kedai runcit (sundry shop) where shop owners would know you by name and were intimately aware of your personal preferences and shopping needs as merely a thing of the past. There are, however, companies out there who have not forgotten the value of personal relationships with their customers.
Through the use of location data gleaned from consumer’s mobile devices, shops are looking at new ways to offer each and every customer a unique experience.
Grabbing your attention
“It’s really important to build a connection with your customers, be they potential or even existing ones,” says Patrick Wee Kok Han, chief marketing officer at My Healthland Sdn Bhd.
“Nowadays, it’s not just about advertising and telling people what you have to offer. It’s about building a relationship and having a platform where you are able to provide information that is of value to your customers.”
Healthland operates wellness centres that offer spa and health treatments. It has launched a mobile app which contains location based features. This has enabled the company to use what is known as proximity marketing to reach out to its customer base at relevant points in time.
For example, whenever one of its app users gets near to one of Healthland’s outlets, he or she would receive a notification with directions to get to the shop via Google Maps.
This is called geo-fencing and it makes use of the GPS (global positioning system) signals to set a digital boundary that will detect a location-aware device such as mobile phone entering or leaving the perimeter.
In addition, Wee says that the information gathered from user interaction with the app has also been linked up with the company’s POS (point of sale) system.
By doing so, the company hopes to develop a more holistic understanding of each customer’s behaviour and preferences through the data collected in its integrated system. It can then customise the offers and promotions it highlights to each of its customers, focussing on wellness packages that are best suited to their health or physical needs.
This is in stark contrast to old marketing tactics where businesses would blindly bombard its entire customer base with generic mobile ads or SMS offers.
“If you’re a member of our mobile community, we’ll be able to really track and understand your needs,” he says. “What this means is that the information that we send to our members would be based on their respective profiles. I think customers would appreciate it when the information given to them is more relevant and useful.”
Meanwhile, at KyoChon, a fried chicken restaurant chain, staff members are alerted to the arrival of customers through the use of iBeacon technology.
“The moment they walk in through our front doors, we know who they are,” says Terry Goh, managing director of Double Fry Sdn Bhd, the master franchise owner of KyoChon in Malaysia. “We’ll be able to see what their previous orders were and access the past records we have about them.”
iBeacons are small indoor positioning sensors that are able to detect Bluetooth signals emitted from mobile devices that have KyoChon’s app installed on them. As the would name suggest, the sensor was developed by renowned consumer electronics firm, Apple Inc.
Essentially, iBeacons perform a similar function to GPS, but the difference here is that they are able to detect signals within the confines of a building whereas GPS cannot.
Goh points out that the motivation for using location based features within the KyoChon app was to provide greater convenience to its customers.
“What’s the most important thing people carry with them every day? It’s their phones. In that realm, communication is instant and rapid. So why should we (as a brand) continue to reach them through traditional marketing methods? That doesn’t make sense anymore,” he says.
South Korean cosmetic brand, TonyMoly also held a similar view when it decided to make use of both the GPS and Bluetooth information it had access to via its mobile app.
“We wanted to look at how we can improve our customer experience,” says Yong Soh Sung, chief operating officer at TonyMoly (M) Sdn Bhd.
“From the features in our app, we can record and study the buying patterns of our customers, their purchasing power and how frequently they are visiting our outlets. Based on that, we can offer them better advice in terms of which products are more suitable for them.”
TonyMoly has taken the use of iBeacons a step further by placing them at various strategic positions within the interior of its outlets.
When a customer’s phone is within a designated range of the sensors, they would receive information on their phone about the products they are currently browsing on a particular shelf.
At the same time, TonyMoly can collect and analyse data to help it determine which display racks consumers frequent the most and where would be best to place specific products.
“Each iBeacon can be programmed to do different actions. It’s configurable according to the company’s requirements,” explains Kenneth Ng, regional general manager at Zukami Sdn Bhd, the developer behind TonyMoly’s mobile solution.
“It could be product details, a promotion or even a YouTube video. The function here is usually more towards product interaction.”
According to him, the iBeacons can be set up to detect Bluetooth signals from mobile devices that are between 1m to 10m away. Likewise, companies can also determine the radius within which it will engage mobile users via geo-fencing.
In order for all these location based services to work on your mobile phone, it’s necessary to have your GPS and Bluetooth settings turned on.
In the case of apps such as the ones used by companies like Healthland, KyoChon and TonyMoly, these settings are typically activated the moment you switch on the apps.
For instance, if you were to tap on the push notifications sent to your device, this would automatically open up the corresponding app which will then the phone’s GPS and Bluetooth capabilities.
Some users may worry that such behaviour would drain the battery life of their phones, but this is apparently not the case anymore. In particular, iBeacon relies on the Bluetooth 4.0 protocol (also known as Bluetooth Low Energy) which is said to consume less power.
“There is this misconception that everyone has that keeping GPS and Bluetooth settings on will drain battery. It does consume energy, but not that much,” claims Danny Chan, business development director at ATA Retail Solution Sdn Bhd.
Furthermore, most location based services (such as the ones developed for the companies mentioned earlier) have been targeted at mobile devices running on the iOS and Android operating systems. So, if your phone operates on a different platform, you may miss out on enjoying these features for the time being.
“The reason that we are focussed on iOS and Android systems is that when we look at the analysis of these users in Malaysia, they already make up about 85% (of the mobile population),” says C.P. Lim, ATA Retail Solution managing director.
However, he says that those on Windows devices can probably look forward to getting the chance to experience these features in the near future.
“It’s already in the pipeline and it will most likely happen by the third quarter of 2015,” Lim adds.