Imagine you’re in Philadelphia, PA. You just got off the subway and you make a left onto Walnut Street. Your phone buzzes and you see a push notification from my Urban Outfitters App that there is a Summer/Fall Sale happening in-store at the 15th Street and Walnut. Fortunately, you came to Walnut Street to check out the clothing retailers and buy some new clothing for the new season.
Why did this happen? And why did it work so well?
The Answer: Geo-Targeting
Through mobile technology, businesses can leverage a mobile user’s GPS signals and create a geographical perimeter to target/market advertisements to users in that area (Geo-Fencing). Users that fit the business’s desired target market/criteria are then pushed an opt-in advertisement. Why the concept of Geo-Fencing and Geo-Targeting are so successful is because they enable businesses to deliver the right content, at the right time. Essentially combining Place and Promotion of the Marketing Mix.
Geo-Targeting works exceptionally well for brick-and-mortar retailers that depend on the foot-traffic/ physical marketplace for sales. You wouldn’t really see online retailers like ASOS applying this concept unless they had a Pop-up or location, they wanted to drive traffic to.
However, geotargeting does have some drawbacks.
Mobile device users need to opt-in to having their location data shared. Lots of users feel reluctant to share their location data, as a result, making geo-targeting ineffective for some mobile users. Location-sharing and data privacy are both challenges that occur for businesses when leveraging geo-targeting. In addition, the data is not always completely accurate or true. Nike customers that want access to exclusive sneakers can alter their IP address to access geographically exclusive drops on their mobile SNKRS app.
All in all, location-based marketing is highly effective in: creating a highly engaging and personalized mobile experience, targeting and tracking customers.
I think URBN was successful in its location-based marketing because they leverage geographical fencing and their mobile application to segment users. By leveraging the UO mobile app, URBN can then further personalize marketing efforts by past purchasing behavior and interests on the app.