The growth of smartphone and tablets has given rise to many new technologies and the addition of other technologies like GPS has made it to stand out. We all know that GPS technology largely finds its application in navigation related services. Whenever we need to visit a known or unknown place, we just switch-on our GPS and get the correct directions to the destination. But this is not the only one use of GPS technology. GPS technology is also now being effectively used by marketing companies to present new products/offers to the consumers in real time.
Today, due to increase in competition, marketing has become essential for every company to reach out to their existing and potential customers. But reaching the right customer at the right time is the key for retailers and the present technology has the capability of facilitating this.
By making the use of GPS Technology, today, a retail company can get the current location of the customer and if that customer is within its territory, it can send the advertisement to the customer related to its products. Yes, you got it right. I am talking about the very eminent technology service called Location Based Service (LBS). LBS is basically user-driven, which means, it does real time marketing of the product based on the liking and buying behavior of individual customer, thus making pinpoint marketing rather than doing random/mass marketing which is generally the case in traditional marketing practices.
The demand for LBS, leveraged with GPS, is growing drastically among the retailers because it not only provides the location of customer but also gives a comprehensive analysis of customer behavior towards shopping. It gives the retailers an idea about what customer shops the most and from where. Like, for example, if the customer shops mostly from the competitor’s store, it can send more exciting offers and coupons to that customer and make them to consider the other better alternatives existing in the market. Basically, this gives the retail company an opportunity to poach customers from competitors through pull strategy.
LBS have lots of benefits for retailers. First and foremost, LBS provide marketing in a cheaper and effective way than any other means of marketing. Secondly, it provides better understanding of customers by extracting the location, behavior and exact need of customer. It can also generate an impulse behavior among potential customers by sending messages to them about the offers and loyalty points to their personal devices such as smartphones.
In India, the retail sector is emerging as one of the major vertical contributing close to 15% of the GDP. Also, it is considered as one of the fastest growing sector and technologies like LBS will further enhance this growth. According to The Cellular Operators Association of India (COAI), the LBS market in India was less than half a billion market in 2013. Given the growth of mobile technologies, these numbers are certainly expected to go up several folds in the coming years.
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