What sector has been hit hardest by the COVID-19 pandemic? There are a few candidates, with restaurants and physical retail leading the list. Retailers have been suffering, and the pandemic served to accentuate challenges that were significant and unresolved pre-pandemic.
All that said, the more we hear of pundits describing a “retail apocalypse”, the more we feel compelled to look under the covers and see if this dark future will materialize. To date, our research at the Wise Marketer tells us that this is not the case.
Providing encouragement to this cause, we continue to discover new concepts and technologies that enable retailers to engage, identify, and connect with their customers. This week, we read a white paper published by Coniq, self-described as the “Total Customer Engagement Company”, which supports shopping centers, outlets, and retailers. Coniq is based in Chicago with offices in the UK, Europe and the Middle East. Coniq states that its digital platform powers over £1 billion of sales annually for its customers, with more than 20 million consumers shopping at 1,800 brands in 24 countries worldwide.
“Why Proximity Marketing is the Future of Customer Engagement for Retail” is the title of the white paper and it introduces the concept of Geo-Loyalty. As we digested the information, we learned that Geo-Loyalty is more than a catchy nomenclature and is in fact a brilliant evolution of what was originally known as location-based marketing.
We contacted Coniq with a few questions and share this exchange to give you a head start on understanding this new concept of Geo-Loyalty and what it means to the retail industry.
Wise Marketer (WM): The year 2020 was a tumultuous year for retailers as well as shopping malls. What’s your view of how malls will rebound? Can they provide a valuable social outlet for consumers in the coming year?
Coniq: The retail landscape has been under intense pressure for several years and the performance of shopping malls has been impacted. But if you take a closer look, you will see that retailers aren’t headed towards a disaster; they are turning a corner to a new and exciting world in 2021 and beyond. Today, it is more important than ever for the malls themselves to lead in creating vibrant shopping environments for their tenants. We believe Proximity Marketing is the key to creating a new shopping experience for customers that generates more sales for retailers.
WM: Your whitepaper makes distinctions between location-based marketing and Proximity Marketing. Why is Proximity Marketing the concept that mall operators should be focusing on in the future?
Coniq: It’s important to distinguish location tracking from Proximity Marketing. Although both use the same core technology of location aware apps, they differ in one key way. Location tracking collects information anonymously from a multitude of apps to predict where people are moving at an aggregate level. This is useful to predicting footfall, but the information can’t be used for marketing at an individual level. Proximity Marketing collects location information with full permission from the user, such that the location information can be used to personalize messages, trigger events, and even to reward shoppers for their visits.
WM: So, is Proximity Marketing the next generation of location-based marketing or something entirely different?
Coniq: Proximity Marketing has been around in various forms for many years and is essentially the process of using the location of customers to send targeted and relevant communications such as promotions. In the past, this has been attempted with mobile phone tracking by installing expensive hardware or, more recently, by trying to build large networks of i-beacons. However, none of them has really worked for marketing at scale due to the complexity of hardware, and the limitations of users’ phones.
The dramatic rise of location aware apps (Uber and Nest are just two examples) created opportunity for Proximity Marketing to become the backbone of a mall-wide customer engagement and loyalty strategy. The mall operator can become the catalyst of their retail tenant’s future success as well as their own. It’s profitable too. A survey of US retailers that have integrated Proximity Marketing into their strategies showed a 9% increase in profits and a 175% uptick in ROI.
WM: Where does the Geo-Loyalty concept come into play?
Coniq: Geo-Loyalty is where Proximity Marketing and Customer Loyalty meet to provide a new future for retail destinations by providing the capabilities to successfully engage and influence consumers in store and online.
Geo-Loyalty enables sophisticated mall e-commerce value propositions where you use store visit information to generate higher levels of sales. For example, you can know exactly which stores a loyalty program member has visited and, if they did not make a transaction in the store, you can follow-up later when they are home with a personalized email showing relevant products from those stores and, with a discount code, take the customer to the mall’s e-commerce store. You can use your imagination to see how powerfully Geo-Loyalty can be implemented for success in this arena.
WM: You mention that Gen Z is an important influencer group for all marketers to consider in their planning, but what should mall operators specifically know about this group?
Coniq: One outcome of the events transpiring during 2020 was a strong uptick in consumers expressing a desire to “shop local”. This is expected to continue even as the world emerges from the pandemic. One survey found that 60% of Gen Z consumers surveyed said they intend to support local businesses and continue to shop locally post-COVID-19.
We believe we have a great opportunity to impart mass innovation. The behaviors adopted by Gen Z will jump with surprising speed into other demographic groups. From Instagram to WhatsApp, this is where we need to focus to predict the tidal waves of change to how we market. Proximity Marketing can unify the trends we see to bring a young demographic with high-potential future purchasing power into your shopping destination.
WM: What are the success factors for operating a Geo-Loyalty program? How do you successfully implement this type of program at the mall level and satisfy the needs of retail tenants who already have their own loyalty program?
Coniq: The strategic outcomes from a Geo-Loyalty strategy have increased visits and sales as well as improve customer retention at the top of their list. Key objectives of any Geo-Loyalty program created by the shopping center should include a selection from among this list:
- generating increased footfall
- driving value-added sales
- improving customer experience
- building rich business insights through collected data
- adding value to retail business owners
You also need to plan to measure data and financial results to determine success. This is important in sustaining a Geo-Loyalty program. Prior to launching a Geo-Loyalty program, you should establish criteria to measure sales lift such as visits, transactions, products sold, and revenue generated.
If you’re hungry for more, head over to Coniq’s website, and you too, can read their complete white paper on Geo-Loyalty.