How Has Location-Based Marketing Changed For Small Businesses Post-Pandemic?

Luke Fitzpatrick

Are you a local business struggling to bring in customers? You're not alone. The pandemic has affected millions of small businesses. But now, as we approach the post-pandemic era, small businesses are looking at revival.

Location-based marketing can help small businesses bounce back. The concept of location-based marketing isn't new, but the pandemic has changed it in many ways. Here's how the pandemic has changed location-based marketing for small businesses.

What is location-based marketing?

Location-based marketing is a marketing strategy in which you use a consumer's mobile device location to send targeted alerts, notifications, and advertising content. Typically, the content is sent through SMS, browser notifications, or in-app notifications.

Nowadays, people, especially millennials, are on their mobile devices all the time, especially when they're shopping. Small businesses can leverage this by sending a targeted message and encouraging consumers to take action.

Suppose you're a restaurant business located in a popular shopping mall. When people come in the vicinity of your restaurant, you can send automated alerts asking them to come to you. You can pique their interest by offering them a limited-time discount or providing an insight into the day's menu and special dishes.

The primary purpose of LBM is to encourage impulse purchases. A Statista report showed that more than 45% of purchases made by US adults aged 18-24 in 2018 were impulse purchases. As impulsive buying continues to rise, small businesses can leverage it using location-based marketing.

How does LBM work?

Location-based marketing utilizes geofencing, a technology that triggers automated alerts on mobile devices in a pre-defined geographic area. The devices used to define the geographic boundaries and send alerts are called beacons.

In addition to beacons, local businesses use QR codes to strengthen their local marketing efforts. You can put up a large custom QR code outside your shop and ask people to scan it in change for some benefit. In exchange, you can offer them a discount, promo code, etc.

Why should small businesses leverage LBM?

So, why should you care about location-based marketing in the first place? Well, if you're a local business, you don't have too many marketing options. Outside-the-house (OOH) advertising is an option, but putting up large banners on city bridges can be costly.

Online marketing is an alternative. However, PPC and SEO have become hyper-competitive, and getting instant results from them isn't possible.

Location-based marketing bridges this gap. It enables you to leverage online marketing strategies without making hefty investments. Here's are some reasons why small local businesses should consider using LBM.

1. Low-cost and targeted: LBM is one of the most affordable types of marketing. You don't have to pay for advertising networks to get traffic. With minimal investment, you can get highly targeted traffic with high buyer intent.

2. Understand your customers: While location-based marketing excels in attracting new customers, it also helps you understand your existing customers. For example, if you get 300 check-ins for the special Monday menu but only 50 for the Wednesday menu, it indicates that your customers are more interested in your Monday menu.

3. Reward customers: You can offer extra benefits and rewards to your existing customers. For example, you can provide a flat 10% discount to a customer returning to your restaurant. LBM helps you reward your customers and increase their loyalty.

4. Attract new customers: LBM helps you convert foot traffic near your business into customers. It offers an effective way to attract and engage consumers who haven't heard of you before.

5. Leverage impulsive buying: A consumer is more likely to enter a store if she's physically close to it compared with when she's at home. Location-based marketing targets people who're passing by your business, thereby increasing the chances of sales.

6. Enhance your local presence: Strategic utilization of LBM can go a long way in enhancing your local presence. More consumers will recognize you, resulting in increased brand recognition and awareness.

7. Measure your results: With QR code tracking, you can measure how many people have scanned the code and taken action. Unlike other OOH advertising techniques that aren't measurable, LBM enables seamless tracking and helps you determine the ROI accurately.

How has COVID-19 changed LBM for small businesses?

Location-based marketing has traditionally relied on foot traffic. If more people enter your store's geographical boundary, you can send more alerts and increase your sales.

But things aren't the same as COVID-19 has restricted people to their homes. Supermarkets and shopping malls continue to remain empty, adversely affecting local businesses like restaurants and retail stores.

In response, new location-based marketing trends are emerging that local businesses should leverage. Here's how COVID-19 has changed LBM for small businesses.

1. Beacon marketing

As discussed, businesses relied on foot traffic back in the day. But as the footfall continues to plummet, business owners are looking for other ways to target their customers. The biggest LBM trend that has emerged amid the pandemic is targeting consumers in a neighborhood or establishment.

Earlier, the geofence of businesses was small, limited to a few hundred meters in diameter. Modern-day beacons have increased this range substantially, enabling providers to engage customers far away from their location.

These beacons work the same way as the older beacons. They send notification alerts to the customers providing insights into prices, discounts, and inventory. Customers can then either walk to the store or purchase online.

2. Geo-conquest

If you're fond of tower defense games, you know what we're talking about. These are hard times for small businesses as they continue to struggle to get traffic and customers. To overcome this issue, some providers have set up beacons and geofences near their competitors' locations.

Why would you want to do that? Let's understand with an example.

Suppose you're a fashion apparel store. A customer goes to your competitor, another fashion apparel store, that's offering a flat 15% discount on the new edition of Levi's jeans. The customer has made up his mind to purchase from your competitor, and he's on his way to the store.

But on his way, he receives a notification alert, stating that you are offering a 20% discount on the same new edition. Wouldn't the customer pause for a moment? Now, what if you add a sense of urgency by limiting the offer for 24 hours only. Wouldn't the customer reconsider?

Now, what if you also provide your address and map directions? Wouldn't the customer come to you?

That's how geo-conquest works in a nutshell. And no matter whether you're a fashion store or a restaurant, the right geo-conquest strategy works for all businesses.

3. Localization of mobile apps

We live in a strange world, don't we? A few years back, when digital marketing was on the rise, every small and medium business wanted to become popular worldwide. And now, when we live in the globalization era, brands are trying to go local again.

The element of relevancy has a critical role to play in this paradigm shift. While large-scale, country-wide, or worldwide marketing helps you get more eyeballs, it doesn't translate into sales. The local audience, on the other hand, is specific with high buyer intent.

Therefore, local businesses are focusing on delivering location-based content to their customers. Since mobile apps have become the go-to medium for consuming content online, businesses are localizing their mobile apps to cater to their customers' requirements.

4. Personalization and relevant advertising

This isn't a new trend, but its magnitude has surged during the post-pandemic era. Earlier, location-based advertising wasn't entirely relevant. Automated beacons sent notification alerts to anyone who entered the geofence. This led to poorly targeted advertisements and lower conversion rates.

Now, brands have become highly specific in terms of who they target. Instead of sending out bulk messages to everyone, the beacons will now ensure the customer is relevant and can take action.

5. The rise of smart spaces

Smart homes are the new normal now, and voice assistants like Alexa and Echo have become essential parts of our lives. Since location-based marketing and smart spaces share the same technologies – Bluetooth and Wi-Fi – businesses are looking forward to amalgamating the two.

For example, your refrigerator can alert you that you're running out of eggs. Businesses can collaborate with smart device providers and send customers promotional messages via these devices.

More of this marriage between smart spaces or LBM needs to be explored. But since the use of smart devices continues to rise, this trend can soon come to the mainstream.

Common location-based marketing mistakes to avoid

LBM is a trend among local businesses, and you might be planning to hop on the bandwagon too. But no two providers are the same, and what works for your competitor may not work for you.

If you want to leverage location-based marketing, avoid these mistakes.

1. Targeting unscalable locations

The success and failure of your LBM campaign will depend on the quality and quantity of foot traffic in the nearby area of your business. If you're located in an isolated region where not many people arrive, your location marketing efforts won't drive results.

Smaller markets provide a limited audience. As the market size increases, the audience multiplies, ensuring more traffic and sales.

If you're getting started, look for malls and multi-use buildings. You can find widespread markets as well. In all, just make sure you get enough relevant traffic.

2. Offering common products

Let's return to the fashion apparel store example. What if instead of selling the new edition of Levi's jeans, you were selling outdated items that were available in every store? Would people bother coming to your store? Likely not.

Location-based marketing works well in two conditions. First, there's no competition. If you're the only fashion store that sells Levi's jeans in the building, people will have no choice but to come to you.

But if there are multiple fashion stores, people will only choose the one with the latest edition of the jeans. So, invest in location-based marketing only if your product is unique and isn't available at every second store.

3. Giving up sensitive data

If you're a business that deals with sensitive data, you need to be extra careful with location-based marketing. These businesses include healthcare providers, government offices, etc., that might work with confidential information.

Privacy compliance firms like the Digital Advertising Alliance and Network Advertising Initiative have specific guidelines to handle opt-in permissions. Be sure to comply with the regulations when using location-based marketing for your business.

Keeping up with the evolution

The COVID-19 pandemic has changed location-based marketing in several ways. But the premise remains the same. Businesses should send out valuable advertising content to highly specific audiences that are likely to take action.

As we enter the post-pandemic era, new trends in LBM will emerge. As a small business owner, ensure that you stay updated with the latest changes and tweak your business accordingly.

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Academic Speaker | Freelance Journalist | I have contributed to a variety of publications such as Forbes, Tech In Asia, and The Next Web. I cover a variety of topics ranging from fintech, big data, AI, blockchain, to lifestyle and breaking news stories.


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