Proximity Marketing and m-commerce – the way ahead

September 9, 2014     By : LTP Team

“IBM study shows that 72% of the consumers will act on a call to action from a marketing message if they receive it while in sight of the retailer.

In-Market study shows that consumers who receive a location-based message are 16% more likely to use an app in-store than those who do not, and consumers who use apps while in-store buy 14% more than those who don’t.”

Smartphone users and usage is on a rise, which has resulted in an increase in m-commerce and proximity marketing. M-commerce (mobile commerce) is the buying and selling of goods and services through Smartphone and Tablets and proximity marketing offers simple, consistent and frictionless engagement, using QR codes, NFC tags, SMS and BLE technologies delivered to Smartphone and Tablets. m-commerce and proximity marketing has a strong co-relation. Studies show that consumers are more likely to make in-store purchase as a result of contextual campaign instead of general offers received via email.

Recent study by Knowledgefaber shows that the Mobile Proximity Market in U.S. is close to $3 Billion and m-commerce sales in U.S. is$42-52 Billion. Analysts feel both m-commerce sales and mobile proximity marketing to grow exponentially by 2017. Mobile is a key component in Omni channel sales, as a result of which most of the retailers are trying to build a strong m-commerce platforms. In case of proximity marketing which was initially driven by SMS and WiFi, transformation started with the introduction of NFC. The BLE technology gave a meaningful direction to proximity marketing. With recent developments in BLE technology and companies like Apple, Qualcomm into the arena, proximity marketing is a hot area where both start-ups and world leaders are banking on.

Proximity platforms could also transform digital out-of-home, or even traditional billboard marketing. Proximity marketing can be done at bus stops, sporting arenas and events are all areas where beacons or even near field communication chips could create multichannel campaigns. Companies like Shopkick, Estimote, Scanbuy, Thinaire, Swirl Network, Nomi, Sonic Notify, Roximity, Inmarket, Proxama and Blue Bite are already working with retailers and brands to increase the effectiveness of proximity marketing. Many of these companies are providing Analytics as an add-on feature which helps in measuring advertising and promotion effectiveness and better understands the customer journey. With an analytics engine, marketing insights with rich and actionable intelligence can be delivered such as in-location traffic, app downloads, tap-ins, hot area and paths to purchase.

Although more and more companies are jumping into the arena, there are only few companies who are trying to address the customer pain points. Let’s talk payments have interviewed multiple companies in the last few months but we found only few companies who are addressing customer pain points and preparing an end-to-end solution. Most of the players in the current market are me-too players with no proper focus.  Pilot projects in 2014 shows that proximity platforms can significantly improve the shopper experience and the retailer’s bottom line, but retailers and brands are cautious about the success of proximity marketing when rolled out on a large scale.

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What does Let’s Talk Payments feel about proximity marketing?

Proximity marketing can bring radical transformation to the shopping environment. Providing only beacons or NFC tags won’t help, also guiding a shopper to the aisle will not help. Companies need to build product sets which can address customer pain points and play a major role in path to purchase. Proximity marketing companies should build solution that initiates customer interaction as soon as the person enters the store, send contextual campaigns, help the customer to redeem its coupons through his or her smartphone and has the ability to complete the transaction. Companies making such solutions are ought to succeed in the days to come.

LTP Team

A group of content writers, bloggers, journalists and editors from the Lets Talk Payments team.

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