What is Proximity Marketing and How Does It work?

Proximity marketing is about reaching the right consumer at the right time and place with relevant and personalized notifications. It delivers great results for businesses when combined with effective advertising strategies and tools.

In the last two years, we have seen brands in malls and airports use proximity marketing to enhance customer experiences.

Marketing managers in various industries are now realizing that proximity marketing offers more than just delivering coupons. These tools help understand customer needs and behaviors, revealing valuable buying patterns.

Looking ahead, marketing strategies will increasingly revolve around this technology. Proximity marketing campaigns highlighting sales will change how consumers perceive it, building trust by showing that the technology benefits them.

This article will explain the basics of proximity marketing, how it works, and what the future holds for this technology.

What is Proximity Marketing?

Proximity marketing is a way of advertising to people when they are near a particular place. For example, if you are near a store, you might get a special offer on your phone to encourage you to buy something.

It’s a way for businesses to reach out to potential customers who are nearby and ready to shop.

How Does Proximity Marketing Work?

Proximity marketing uses technology to send messages to people’s phones when they enter a certain area. These messages can be texts, images, or videos sent through a mobile app.

Key Requirements for Proximity Marketing

Consumer’s Mobile Device: The person needs to have their phone with them at the location where the marketing is happening.
Location-Based Technology: The area must have technology set up to send and receive messages. This technology detects when someone enters the area and sends them the marketing messages.
Relevant Mobile App: The person must have the specific app installed on their phone to receive these messages. This app can be your brand’s app or a larger app for the place, like a mall’s map app or an app for a specific store in the mall.

For instance :

Proximity marketing works by sending alerts to people’s phones when they come near a certain place. For this to work, the person needs to have their phone with them at that place.

There must be special technology in the area to send these alerts. Additionally, the person must have a specific app on their phone that can receive these alerts.

This app could be your company’s app or a general app for the location, like a shopping mall app.

For example, if someone walks into a mall and has the mall’s app on their phone, they might get a notification about a sale happening in a store nearby.

This way, the marketing message reaches the right person at the right time, encouraging them to visit the store and make a purchase.

Benefits of Proximity Marketing

Proximity marketing has several benefits for businesses. Here are some of the main advantages explained below:

1. Personalized Targeting:

How It Works: Proximity marketing allows businesses to send messages to people based on their location. For example, if someone is near a store, the business can send them a message about a sale or special offer.
Why It’s Good: This makes the message more relevant and personal, increasing the chances that the person will visit the store.

2. One-to-One Marketing:

Old Methods: Traditional marketing methods like radio, billboards, and TV send the same message to many people at once.
New Methods: Proximity marketing focuses on sending personalized messages to individuals. This one-to-one approach tends to result in higher conversion rates and better customer opinions.

3. Valuable Customer Insights:

Data Collection: Proximity marketing can collect detailed information about customers, such as their location, how often they visit a store, and the times they usually come.
Data Use: Analyzing this data helps businesses understand their customers better and grow their business. It also allows businesses to quickly reach customers with time-limited promotions or sales.

4. Reaching Remote Customers:

How It Works: Even if a customer is not near a physical store, proximity marketing can still reach them. For example, a company’s mobile app can use location data to send messages to customers who are near a relevant location.
Why It’s Good: This helps businesses reach customers who might not know about the store otherwise.

5. Increasing Brand Awareness and Loyalty:

Benefits: Proximity marketing can increase brand awareness, improve conversion rates, and build customer loyalty.
Cost Savings: By targeting customers who are already interested in the business, companies can reduce advertising costs.

Why You Should Invest in Proximity Marketing?

Proximity marketing is a smart approach to improve your business. Here’s why it’s worth investing in:

1. Engaging Customer Experience:

Concept: Proximity marketing is about delivering the right content at the right time and place.
How It Works: It uses customer location and current activity to create a personalized and engaging experience. For example, if a customer is near a shoe section, they might receive an offer for 20% off on shoes.
Benefit: This approach encourages customers to buy and builds strong relationships with the brand.

2. Drives Instant Traffic:

Immediate Impact: Proximity marketing sends alerts that are highly relevant to customers, driving immediate conversions and high traffic to your store.
Example: A retailer can send a special discount offer to customers near a specific product aisle, encouraging them to make a purchase right away.

3. Competitive Advantage:

Industry Usage: Big retailers like Ikea, Walmart, and Macy’s are already using proximity marketing to increase store traffic.
Statistics: Research shows that 71% of retailers can track and understand customer behavior, and 75% of US retailers use proximity solutions to boost profits, potentially increasing operating profit by nearly 9% with an ROI of 175%.

4. Offers Personalization:

Customer Focus: Proximity marketing allows for personalized customer service. For example, when a customer enters the store, they might receive a welcome message, and staff can be alerted to whether they are a repeat customer or a first-time visitor.
Benefit: This personalized treatment enhances the shopping experience and promotes business growth.

5. Real-Time Experience and Cost-Effective:

Tracking Results: You can easily track and measure the success of proximity marketing. For example, you can see how many customers visit your store after receiving a proximity alert.
Cost: This marketing solution is inexpensive and flexible, allowing retailers to use it as needed. It provides a cost-effective way to gain a competitive edge and boost business.

What Does the Future Hold For Proximity Marketing?

Proximity marketing will help brands gather detailed data about their customers. This data will allow them to communicate in a more personalized way, improving customer satisfaction and increasing profits.

As a result, brands will see a significant positive impact on their bottom line.

1. Collecting Valuable Data:

How It Works: When people use proximity marketing, their actions are tracked. For example, when they enter a store or respond to a notification, that information is recorded.
Why It’s Important: This data shows what customers like, where they go, and what they buy. It helps brands understand their customers better.

2. Changing Communication:

How It Works: With detailed customer data, brands can send more personalized messages. Instead of generic ads, customers get information that matches their interests and needs.
Why It’s Important: Personalized communication makes customers feel valued and understood. They are more likely to respond positively to messages that are relevant to them.

3. Positive Impact on Profits:

How It Works: When brands use data to improve their marketing, it leads to better customer experiences. Happy customers are more likely to make purchases and stay loyal to the brand.
Why It’s Important: Improved customer experiences lead to more sales and higher profits. Brands can also save money by targeting their ads more effectively, ensuring they reach the right people at the right time.

Quick Links:

Closing Thoughts

Are your shoppers not having the best experience that would encourage them to buy more? It’s not about changing how they think; it’s about changing how you market to them.

If you’re still blaming the pandemic for low sales, it’s time to rethink that.

While the pandemic did change how people shop in stores, recent trends show that in-store shopping is coming back.

People are returning to their favorite stores, helped by technology, especially location-based technology.

Related Videos: