Geofence Marketing: 7 Best Practices For New Retailers In 2021

Small Business Canada

If you’re new to the retail industry and want a more creative way to market your merchandise than Facebook or Instagram, consider geofence marketing.

Geofence marketing is a location-based marketing strategy that lets brands connect with customers on their smartphones when they enter a “virtually-fenced” area. For instance, a retailer could set up a geofence that covers the shopping plaza where they’re located. Consumers who enter the fence get a message on their phone that says, “You’re just steps away from ABC Retailers. Stop by today and get 20% off your purchase.”

Research shows 75% of customers complete an action after receiving a location-based message. Intrigued? 

To help new retailers get acquainted with geofence marketing, we’ll provide a list of best practices. 

Best practices for new retailers

The concept of geofence marketing might seem a little daunting. However, with a few tips, you can easily implement your first geofence marketing campaign:

Geofences should be small

When you start out, you might be inclined to set up a fence that surrounds your entire town. However, geofence marketing is hyper-local and should really focus on a small area. 

If your retail shop is in a plaza where people walk from one store to another, set up a fence that’s within a five-minute walk of your front door. If your store requires customers to drive to it, the borders of your fence should be about a 10-minute drive in either direction. 

Give customers a reason to stop in

 When customers enter the virtual fence and receive a digital ad from your store, you have seconds to capture their attention. The ad should be short and enticing. A simple message that says, “Come visit ABC Retailers” won’t cut it. You need to tell customers that they’re close and give them a reason to go into your store. Consider giving customers a coupon or a free gift with their in-store purchase. 

Design with mobile in mind

Geofence ads are usually shown to consumers on their smartphone, so keep that in mind when you design an ad. The template you’re working with is small (think 300×50) so the design and messaging must be incredibly simple to be effective in such a small space.

Set up fences at appropriate times

Setting up dozens of ads that reach customers 24/7 is ineffective. Focus on timing that makes sense for your business. A nightclub, for example, might run ads from 8 pm-10 pm while a restaurant might run ads during the lunch hours to bring in more traffic. 

Narrow your focus

Setting up a fence is the first step, but you can target specific customers within that area through segmentation. For example, a high-end jewelry store might focus on older adults with a higher income, but a paintball venue might target 18-25-year-olds.  

You can layer customer data on top of your virtual fences and target people by age, gender, income level, education, or employment. 

Some platforms refer to this as secondary targeting. The location is the primary target, but those within the area are then segmented by a second set of data points. 

Get creative with locations

Your geofence doesn’t have to be a 100-foot radius from your front door, although that’s a good place to start. You can get creative with locations. Think about where your target audience hangs out and set up fences there. 

For instance, a local ice cream shop might get a lot of traffic after a little league game wraps up. The shop could set up a fence around the local ball field and give parents a coupon for an after-game ice cream. A ride-sharing app might set up fences around the airport or near a stadium after a game lets out. A bookstore might set up a fence around the neighboring coffee shop to encourage people to stop by after enjoying their latte.

Think beyond your front door. 

Know how you’ll track the success

You’ll need a marketing platform to deploy geofence ads. When you’re looking for the right fit, be sure to explore how campaigns are measured. What kind of metrics will you have access to? Of course, you’ll want stats like reach, impressions, store visits, and coupon redemptions, but you need to know this information before selecting a platform. 

You should also explore a platform’s ease of use. As a new retailer, you have a lot to do. You could be doing everything from ordering inventory to running the register, so make sure the platform is simple to use. CleverTap, for example, gives retailers the ability to drop a pin in a map to set up a fence, target customers at multiple store locations, and see metrics, like ROI, at a glance. 

Geofence marketing is quickly becoming a go-to marketing tool, especially since so many consumers shop with their phones in hand. If you’re a new retailer, consider geofence marketing as a creative way to introduce customers to your brand. 

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