9 Things to Know About Location-Based E-Commerce Marketing

The pandemic forced digital transformations across various industries. One such industry is location-based marketing services, which reached a value of USD 59.7 billion in 2023 from USD 33.4 billion in 2019.

Location-based marketing is targeting potential and existing customers based on their geographic location. It heavily relies on mobile device data to detect geolocation and alert the owner about an offer from a nearby business.

An e-commerce business can utilize location-based marketing to understand where its target market is located, provide personalized offers, promotions and tailor content based on that location.

Join us as we discuss 9 must-know things about location-based e-commerce marketing to help you leverage the concept successfully.

9 Key Insights into Location-based E-Commerce Marketing#

Here are some key insights and strategies that e-commerce businesses can leverage to reach the right audience at the right time:

1. Geotargeting and its role in optimizing e-commerce sales#

Geotargeting uses GPS, IP addresses or Wi-Fi data to identify a user’s location and deliver content, advertisements, or promotions. For example, a company running a clothing business from home could target customers in their nearby areas with ads showcasing winter apparel like coats or sweaters and offer a special discount.

Some of the benefits of geotargeting for e-commerce include:

• Ensures relevant ads are showcased to the customers in specific regions or countries, as not everyone is interested in products from all over the world
• Create personalized user experience by delivering location-specific content
• Testing a new product in a small and targeted geographical area can help you improve your offerings before a more significant launch
• Placing ads in the places where your products are available or already successful can help you allocate your marketing budget more effectively

2. Mobile commerce can target specific users#

Mobile commerce plays a crucial role in location-based e-commerce marketing, using device location to deliver personalized, geographically relevant content.

Mobile shopping apps usually ask for location access, which allows businesses to gather data on customer movements and preferences. This data can help craft targeted marketing campaigns catering to specific regions, cities, or neighborhoods.

Key elements of mobile commerce include:

• Geofencing helps businesses define a virtual boundary around a location and send notifications when a user’s device enters or exits the area
• Beacon technology consists of small, Bluetooth-enabled devices that transmit signals to nearby mobile phones. This allows businesses to send messages directly to users
• Location-based notifications can trigger SMS or push notifications when they are near a specific location
• Mobile retargeting can target ads at potential customers based on context, such as sending notifications and ads to consumers who have previously visited a mobile app or are near a store

3. Local SEO is important to attract nearby customers#

Local SEO can optimize your website to rank higher in search results, enabling you to reach more local customers and beyond online marketplaces. For example, when a user searches for "scented candles near me," local SEO will help your business appear at the top.

Consider the tips below to help you optimize your e-commerce business for nearby target audiences:

• Set up your Google My Business profile to help improve website visibility in Google search results and maps
• List your e-commerce business in online directories, as it will help increase SEO if your store comes up through a directory result
• Focus on earning backlinks, mentions, and citations to demonstrate domain authority. You can opt for guest blogging and develop press kits to send to local news outlets to improve domain authority.
• Accumulate reviews to build search engine credibility and increase target audience trust.

4. Personalization with hyper-local marketing#

Hyperlocal e-commerce marketing is an online business model in which local offline shops quickly meet customers' needs and demands. For example, an online grocery store offering same-day delivery or promoting local organic produce to customers nearby makes the shopping experience more convenient and personalized.

Consider these ways to personalize products through hyper-local marketing:

• Leverage local trends and send personalized product recommendations based on local fashion or cultural trends
• If you are into the apparel business, use real-time weather data to promote specific products, such as raincoats in rainy areas or summer wear in hotter climates
• Offer exclusive discounts or free delivery options to customers within a specific radius or location
• Prioritize products with local relevance or that have high demand in certain areas to meet customer needs

5. Geo-conquesting can help you win over competitors#

Geo-conquesting utilizes location data to target potential customers when they are near a competitor’s location and divert them away. This means an online retailer can display ads, exclusive discounts or free shipping to users when they visit a competitor’s website or store.

This impressive strategy uses GPS technology to target users near your competition, enabling businesses to win market share and new customers.

Let us elaborate with an interesting example. Burger King used geo-conquesting smartly by diverting McDonald's prospects back to their restaurants. Whenever any customer came within 600 feet of McDonald's, users would get promotions from their Burger King app to try a Whopper at one cent and then navigate customers to their nearest location.

6. Location-based push notifications can attract customers#

Location-based push notifications deliver timely and relevant messages triggered when they enter a specific geographic area. The immediate connection captures attention and creates a sense of urgency to act on the offer. It can also enhance customer experiences by offering location-specific services or QR codes that direct to in-store invitations.

Consider these tips to send impactful push notifications:

• Use kill switches to prevent users from receiving the same messages multiple times, as it can be annoying
• Combine location data, user profile data and behaviors to improve the relevancy of the message
• Use shorter messages that are simple and eye-catching

For example, Sephora uses geofencing to send push notifications to its users and nudge them to visit the store for a FREE mini makeover. This helps them get more footfall in their store and, probably, a full shopping cart from a delighted customer!

7. Data privacy is an area of concern#

Data privacy is a major concern for businesses wanting to maximize location-based e-commerce marketing. There is a thin line between using location data to enhance customer experience and being intrusive to customers.

That being said, customers are also wary of unethical use of their data, with 63% saying that companies aren’t transparent about how their data is being used.

Let’s understand some more areas of privacy concerns:

• Some users are unaware of their location data being collected and used for targeted marketing
• Constantly receiving notifications can feel invasive, making customers uncomfortable
• Storing and handling location data can bring new risks of security breaches
• Businesses may sell or share location data to third parties without the customer’s knowledge

To address these concerns, businesses must ensure that users can opt in and opt out when sharing location services by complying with privacy laws like GDPR ( General Data Protection Regulation) and CCPA (Central Consumer Protection Authority). Failure to comply with the laws can result in legal penalties and harm to brand image.

8. Tracking metrics is necessary to measure success#

To understand the effectiveness of your location-based marketing strategies, you need to define goals and track metrics by using a work task tracker. Businesses need to regularly evaluate these metrics with the help of platforms like Google Ads and Facebook Ads, which provide detailed performance reports.

Consider using an AI meeting assistant for more productive strategy sessions and data analysis meetings to streamline this process and ensure your team stays aligned on marketing goals and metrics.

Some of the important metrics to consider include:

• Click-through rates, conversions and impressions on ads targeting specific geographic locations
• Number of local users that make purchases compared to non-local visitors
• Foot traffic attribution to understand whether online ads lead to in-store visits
• Mobile app engagement to understand how location-based notifications influence user behavior, including push notifications, app usage and in-app purchases
• Online-to-offline conversions to track how marketing efforts translate into offline actions such as store visitors or phone calls
• Customer feedback and reviews by monitoring online reviews or surveys from customers in targeted locations

9. Understanding future trends is essential to improving location-based targeting#

Understanding future trends will help businesses stay ahead of the competition and understand evolving customer behaviors and regulatory changes. It will also ensure enterprises collect and use location data responsibly, building customer trust while refining marketing strategies.

Here are some crucial trends in location-based e-commerce marketing that businesses can harness :

• Increased use of AI and machine learning will enable businesses to predict customer behavior based on location data. This will allow for more precise targeting and personalized offers
• Integration with augmented reality could merge digital and physical shopping experiences. E-commerce brands may use AR to allow customers to experience virtual store displays, promotions or products specific to their exact location
• Expansion of geofencing and geo-conquesting will enable businesses to target customers near their stores and even competitors
• 5G technology will improve the speed and accuracy of your marketing efforts. This will help businesses to deliver real-time ads, notifications or offers more quickly

Wrapping up#

Location-based e-commerce marketing is excellent for providing personalized, relevant experiences for customers. However, it is important to proceed cautiously and use location data with transparency and privacy measures to maintain customer trust.

If you are thinking of exploring location-based marketing, this is the time. Begin with small, measurable campaigns and watch how your e-commerce business benefits from precise targeting and personalized customer engagement.