This Christmas, things are a little different. The same Christmas decorations are appearing in shops, the same carols are being sung by buskers, but more and more customers are using their mobiles to shop online.
This rise in mobile use is also leading to a rise in location-based marketing that allows businesses to target customers using mobile devices who are passing by their stores.
FourSquare is the most well-known location-based application, with 25 million members. But the location-based marketing trend is taking off with a number of start-ups, including MiiBrand in Australia and Sense Networks in the United States developing location-based apps and platforms.
In the United States, the industry started from almost scratch in 2009 but is projected to grow to $6 billion by 2015.
The rise of location-based marketing is intrinsically linked to the rise of smartphones and tablets.
Figures released by Google last week revealed nearly 40% of shopping-related Google searches now come from smartphones or tablets.
Overall, Google reports the number of queries coming from mobile devices including tablets has more than doubled over the past 12 months.
Ross McDonald, industry leader for local and retail at Google Australia, said Google estimates that among large advertisers, only one in three has a mobile-friendly website – and that number is even lower for small to medium businesses, leaving would-be mobile shoppers feeling frustrated and ignored.
“That means the real moral of this year’s Christmas story is that retailers need to mobilise, and fast,” he says.
Shaun Dobbin, chief executive of Gomeeki, a service provider for business mobile marketing, told SmartCompany he believes Google’s numbers on mobile take-up are conservative.
“We would refer to it as a seismic shift. Mobile is now the dominant and primary means of consumers going online in Australia,” he says.
There are two main types of location based marketing, according to Dobbin: Consumers trying to find businesses and businesses actively trying to communicate with a consumer.
“I believe that there is a lot of opportunity in the second space as there are not too many people doing that at this stage due to the level of sophistication of databases,” he says.
To take advantage of the opportunities in location-based marketing, Dobbin recommends businesses ensure their website can be used easily on mobile devices.
“If you have a mobile-optimised website you can ask that the consumer accepts to provide their location when they are accessing your site, consumers are pretty comfortable with that,” he says.
“That allows you to identify where they are anonymously and start targeting them.”
Dobbin also recommends asking your customers for their mobile numbers and postcodes and building this information into your customer database so that you are ready to take advantage of location-based marketing.
However, getting started on location-based marketing can be as simple as using Google’s free service – Google Places.
“Make sure your product or service is listed with Google Places. It’s a simple thing to start with; you don’t need to spend a fortune to do these things.”
Dobbin warns business should also be careful in how they use location-based marketing to ensure they do not alienate customers.
“You can go wrong, you can be invasive and turn your customers off by doing things that your customers don’t like,” he says.
“Think about communicating at appropriate times of day and know what it is that interests your customers, you need to create things that are completely personalised.”
Dobbin says it all comes back to having a sophisticated database and what you are doing with that data behind the scenes.
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Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
