Proximity marketing: Merging the digital and physical worlds (Commentary)

Oct. 5, 2012

By Alex Romanov

CEO, iSIGN Media

A shopping scene from the 2002 science fiction film "Minority Report" launched a thousand consumer nightmares with a depiction of a store's over-the-top digital marketing strategy: The hero's retinas were scanned to identify him as he entered the store, and a hologram sales clerk materialized, addressing the potential customer by name and aggressively attempting to make a sale based on previous purchases.

Ten years after the release of that film, there actually has been a merger of the digital and physical worlds in the marketing and sales arena, but the effects are decidedly not so dystopian. Proximity marketing uses the consumers' ubiquitous, portable portal to the digital world — the smartphone — to send permission-based messages. No personal information is collected, and the transaction is entirely voluntary. Best of all, consumers can get money-saving offers on items for sale in the store they're visiting, and merchants can realize amazing ROI.

Digital devices give signage a new role

An overwhelming majority of adults in the U.S. now use mobile phones — almost 90 percent (Pew Internet). The majority of mobile phone users visit websites on their devices, keeping in touch with family and friends via social media platforms, staying up to date on news and sports scores and conducting research on products and services they're interested in buying. People in public places are constantly consulting their mobile devices to help them navigate the physical world and stay connected.

This merger of the digital and physical realms has already had profound implications and is doubtlessly affecting our lives in ways yet unrealized. But one known result is new opportunities for marketers to reach consumers at the point at which they're most likely to make a purchase, as well as fresh opportunities to gain extraordinarily valuable information about shopper behavior and preferences.

Digital signage has an important role to play in this process. Merchants who combine point-of-sale digital signage with location-aware technology to deliver messages to customers are taking advantage of every avenue of interaction in a non-intrusive way that delivers value to both customers and retailers.

How merchants benefit from digital signage-based proximity marketing campaigns

With a well-designed proximity marketing campaign that uses digital signage to transmit offers to consumers, retailers can affordably drive major sales increases, gain keen insight into consumer preferences and enhance their customers' shopping experience. They can achieve all these goals while protecting consumer privacy, thus avoiding any resemblance to the in-your-face aggressiveness of the campaign depicted in "Minority Report."

A digital signage-based proximity marketing campaign that uses Bluetooth and Wi-Fi technology to transmit messages protects consumer privacy. No personal data, such as phone numbers or other identifying consumer information, is collected. Consumers have a choice to receive or decline the marketing message, and there is no charge associated with the message transmission.

But merchants still receive incredibly valuable, real-time insights into consumer behavior and preferences from a proximity marketing campaign. An efficient campaign can deliver metrics instantly, letting retailers know how consumers are responding to messages and at what rate offers are turning into sales.

Merchants can use this information to refine their messages to drive higher ROI. They can even link sales information with inventory data, tailoring offers to meet sales goals. A digital signage-based proximity marketing campaign reaches consumers who have already expressed an interest in shopping by coming within range (typically 300 feet from the sign) of the store.

Response rates vary, but retailers using digital signage-based proximity marketing tools generally reap exponentially higher response rates than they would for a traditional direct mail or static signage campaign. And proximity marketing campaigns are typically much less expensive. It's a clear win for merchants.

How consumers benefit from digital signage-based proximity marketing campaigns

On the consumer side, reaction to proximity marketing campaigns is typically positive, with customers appreciating the opportunity to save money on items for sale at the retail outlet they're visiting. A large digital signage-based proximity marketing campaign was rolled out recently at a prominent North American convenience store chain, and merchants didn't receive a single complaint after reaching hundreds of thousands of customers.

The technologies used to deliver the messages — Bluetooth and Wi-Fi — come standard with virtually all smartphones and mobile devices and are used by millions for a host of mobile communication purposes. No consumer download is required. Bluetooth and Wi-Fi are both ubiquitous technologies that consumers generally trust, so they are an excellent medium to send and receive proximity marketing messages.

Aside from the peace of mind that comes from using a familiar medium, proximity marketing campaigns deliver real value to consumers in the form of relevant offers. Since the shopper is generally already in, or in close proximity to, the store sending the message, consumers have displayed a preference to the merchandise being sold by their very presence, and receiving a money-saving coupon or other offer can help consumers make choices and stay within their shopping budgets.

What merging the physical and digital worlds means in commerce

In the early days of the Information Age, many analysts were focused on the impact of e-commerce on "brick-and-mortar" retail establishments, with some predicting that consumers' ability to go online and order practically any item for home delivery would doom commerce as we knew it in the pre-Internet age. Those predictions proved premature: Although e-commerce platforms have had a profound impact on how people conduct business, the brick-and-mortar business model is still very much with us. As it turns out, people do still like to leave their homes occasionally.

But with the proliferation of mobile devices, the Internet and digital communication are now a part of the great outdoors and public spaces. This enables consumers to fully participate in the digital communications smorgasbord wherever they are. Proximity marketing leverages their focus on their portable portal to that world — the digital device — and creates a connection to where they are in the physical world. This development can have just as profound an impact on commerce as the rise of home-based Internet access once did. And it is benefitting both merchants and consumers.

Romanov is CEO of iSIGN Media, a North American multiplatform advertising solutions company that utilizes Bluetooth, mobile, Wi-Fi and location-aware technologies to deliver rich media, permission-based messages to engage consumers.

Read more about digital signage and mobile interactivity.

Topics: Digital Merchandising , DOOH Advertising , Mobile Interactivity , Networks , Retail

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