White Paper - Geofencing in Urban Fashion Industry

Download White Paper - Geofencing in Urban Fashion Industry

Post on 12-Sep-2014

111 views

Category:

Documents

2 download

Embed Size (px)

TRANSCRIPT

<p>Geo-Fencing in Urban Fashion Retailing</p> <p>ABSTRACT Mobile marketing is on a roll right now. Geo-fencing as an essential part of the mobile marketing exploits the potential of the urban fashion industry.</p> <p>1</p> <p>Table of ContentsTechnology ....................................................................................................................... 3Whats Geo-Fencing? ....................................................................................................................................................... 3 How it works?...................................................................................................................................................................... 4 Why Geo-Fencing (Overall Perspective)? .............................................................................................. 5 Why Geo-Fencing (Organizational Perspective)? .................................................................................. 6 How Can We Apply This Technology? .................................................................................................. 7 Current Applications In General ............................................................................................................. 8</p> <p>Industry............................................................................................................................ 9Characteristics of Urban Fashion Industry.............................................................................................. 9 Brand ..................................................................................................................................................... 10 Targeted Customers .............................................................................................................................. 10 Future Trend of Urban Fashion Brand .................................................................................................. 12 Current Applications In Urban Fashion Industry .................................................................................. 13</p> <p>Future .......................................................................................................................... ..14Whats the Next?................................................................................................................................... 14</p> <p>Exhibit ............................................................................................................................ 16 References ..................................................................................................................... 21</p> <p>2</p> <p>TechnologyWhats Geo-Fencing ? A Geofence is a virtual perimeter on a geographic area using a locationbased service, so that when the geofencing device enters or exits the area a notification is generated. The notification can contain information about the location of the device and might be sent to a mobile telephone or an email account.1 Geo-fencing is a feature in a software program that uses the global positioning system (GPS) or radio frequency identification (RFID) to define geographical boundaries. Geo-fence programs allow an administrator to set up triggers so when a device crosses a geo-fence and enters or exits the boundaries defined by the administrator, an SMS or email alert is sent. (Exhibit 1) The mother of all geo-fencing patents, Where. Patent No. 7848765, also defines a geo-fence as possibly being associated with a moving location that is associated with a portable electronic device. In this case, the geo-fence is placed around individual users and moves with them. The patent describes practically every mobile app with any kind of geo-trigger, from simple location-based alerts to verifying transactions and tailoring information to the behavior of a user. (Exhibit 2) The full abstract reads: Provided herein are methods and systems relating to location-based services such as social networking, providing demographic information, tracking mobile devices, providing business information, providing an adaptable user interface, remotely effecting a change on a portable electronic device, providing a geofence, outputting location-based information on a mobile device, varying transmissions to and from a mobile device, providing locationbased alerts, verifying transactions and tailoring information to the behavior of a user2</p> <p>1</p> <p>Wikipedia. "Geofence." Wikipedia, the Free Encyclopedia. 17 Jan. 2011. Web. 5 Apr. 2011. . 2 Schonfeld, Erick. "Where Is Awarded The Mother Of All Geofencing Patents." TechCrunch. 21 Dec. 2010. Web. 23 Apr. 2011. .</p> <p>3</p> <p>Overall, geo-fencing can be defined as the creation of boundaries that trigger an action or notification when a person enters or exits the area, or as a predefined place around individual users and move around with them. In this paper, the focus is on the geo-fencing technology and applications from the retailers perspectives; which means that we define a geo-fencing as a virtual boundary that triggers an action or notification when a person enters or exits the area.</p> <p>How it works? Geo-fencing can rely either directly on GPS tracking technology or on the carriers network to establish a subscribers location. A smart phone or GPS enabled phone is not a requirement. On the basis of GPS tracking technology, the GPS receivers location is recorded and transmitted through a wireless network. (Exhibit 3) The placement of a boundaryfence- can be set by entering a center point and length of radius on a street image; a square made by dragging over an area of a map with a mouse; or, with some GPS tracking devices, several exact coordinates can be input, and the area will be defined by connecting the points in a polygon shape. When the vehicle or the person enters or exits the boundary, it is recorded and the notification including email or SMS text messages will be delivered to the user. In the situation in which geo-fencing relies on the carriers network to establish a subscribers location, instead of locating mobile users by GPS tracking technology, the carriers network adopts the network-based tracking techniques that utilize the service providers network infrastructure to identify the location of the handset.3 (Exhibit 4) Whether geo-fencing works on the basis of GPS tracking technology or via the carriers network, these two applications have their advantages and disadvantages. While the carriers network enables geo-fencing to work for the regular cell phone, broadening the base of potential users, geo-fencing loses the opportunity to be further integrated with other mobile marketing application such as Augmented Reality or Location- Based Service. While a GPS enabled smart phone has applications, it limits</p> <p>3</p> <p>Tracking a suspect by mobile phone: Tracking SIM and handset". BBC News. 2005-08-03. http://news.bbc.co.uk/1/hi/technology/4738219.stm. Retrieved 2010-01-02.</p> <p>4</p> <p>the audience, given that only 21% of American wireless subscribers were using a smart phone in 2009.4</p> <p>Why Geo-Fencing (Overall Perspective)? Why markets and retailers should adopt the geofencing? What are its advantages and disadvantages? According to Alistair Goodman, CEO with Placecast: Consumers can opt in to engage with a brand they care about and we create geo-fences to areas which are relevant to the brand. When a consumer crosses a geo-fence, they get a message relevant to the brand and to the area they are in.5 Geo-fencing enables retailers or marketers to deliver a message to the consumers at a certain place and time, including location relevant information, in an environment friendly way and at low cost6. The message sent to the consumers would not only to drive traffic to the stores but also to acknowledge them about what they can do to engage with the brand. And, the location relevant information such as weather or traffic headlines would remind customers of the existence of the stores, increasing the brand awareness, as well as the brand attitude. Furthermore, the coupon or promotion inside the message also would increase the purchasing intention of potentials customers. Beyond the message, geo-fencing doesnt require users to have a smart phone or to open up specific apps all the time. Delivering information through notifications/ text, geo-fencing frees its users to manage hundreds of different apps on the control panel of their smart phones, and doesnt eat up their batteries. In a landscape where smartphones dont yet represent the majority of mobile phones (as of the fourth quarter 2009, Nielsen estimates 21 % of American wireless subscribers were using a</p> <p>4</p> <p>Vazquez, Paloma. "Geo-Fencing: A Location-Based Service Alternative - PSFK." PSFK - the Go-to Source for New Ideas and Inspiration for Creative Professionals. 18 Oct. 2010. Web. 23 Apr. 2011. . 5 Knight, Kristina. "Geo-fencing Gives Message Options to Brands - Advertising - BizReport." BizReport - News &amp; Insight for Online Marketers. 14 Sept. 2010. Web. 23 Apr. 2011. . 6 "GPS Cell Phone Tracking - I Know Where You Are." Maps and GPS Info - Useful Information on Maps and GPS. Web. 23 Apr. 2011. .</p> <p>5</p> <p>smartphone), geo-fencing may represent an effective means of capturing a broader consumer base with location-based offers.7 While geo-fencing brings in retailers and marketers various benefits, it also raises privacy and safety concerns, and may erode the brand image of retailers or brands by bombarding and pushing customers. Privacy Concern In order to locate the customers inside and outside the geo-fence, geo-fencing technology would need to locate the customers constantly. And that would incur the privacy concern. According to Tasso Roumeliotis, CEO of WaveMarket, the key to geo-fencing is being transparent to users and providing ways to opt in and out of the services, which means explicitly telling users that a certain application is accessing their location and reminding them periodically that it is still active.8 Safety Concern Because that most of the geo-fencing applications will send the target customers notifications or text messages, it may distract them from driving and therefore raise the safety concern. Erode the Brand Image The adoption of geo-fencing technology may not benefit the retailers or marketers. According to Roumeliotis, the last thing people want is somebody calling them, trying to sell something, and the second-to-last thing is getting a text message trying to sell them something. Geo-fencing should always provide a service, not an ad. Bombarding and pushing sales would not drive people in the stores but would keep them aways and erode the brand image.</p> <p>Why Geo-Fencing (Organizational Perspective)? From the organizations (the retailers) perspective, geo-fencing benefits various departments in various ways:</p> <p>7</p> <p>Vazquez, Paloma. "Geo-Fencing: A Location-Based Service Alternative - PSFK." PSFK - the Go-to Source for New Ideas and Inspiration for Creative Professionals. 18 Oct. 2010. Web. 23 Apr. 2011. . 8 Manninen, JP. "Geofencing Enables New Location-based Apps, Raises Privacy Concerns | VentureBeat." Tech News | Innovation News | Money News | VentureBeat. 23 Apr. 2010. Web. 23 Apr. 2011. .</p> <p>6</p> <p>Marketing &amp; Communication Department Geo-Fencing enabled the retailers to promote their product, especially for the launch of new or modified products, to collect the response of consumer for sales projection and demand forecasting, to personalize the message delivered to the targeted customers, and to increase the brand awareness, brand purchasing intention and brand attitude. Sales department Geo-fencing would drive traffic in stores, therefore would assist to increase sales volume and the cross selling opportunities. Warehouse Geo-fencing enables the retailers to do more promotions targeted at different groups of customer, therefore, can reduce the slow inventory. Store Geo-fencing would drive traffic in specific stores, exposing the local retailer to broader customer base.</p> <p>How Can We Apply This Technology? Currently, there are several third party geo-fencing services providers that are enabling the retailers to carry no fixed cost for the infrastructure and at a low cost to access the service. Take an example from AT&amp;T ShopAlerts (Exhibit 5): AT&amp;T ShopAlerts AT&amp;T has become the first American carrier to throw its weight behind location-based ads by teaming up with Placecast to launch the so-called AT&amp;T ShopAlerts service in four markets: New York, Los Angeles, Chicago, and San Francisco. For the retailers, ShopAlerts provides scalable soultions, messaging to the widest audience, mindset messaging, proven best practices, consumer preferences, and location-based analytics. Scalable Solutions ShopAlerts is licensed and deployed by operators, digital marketing agencies, large retailers, and resellers around the world. The exposure of this service broader the potential customer base for the retailers. Messaging to The Widest Audience ShopAlerts is not tied to any one app, operating platform, carrier, or device, so it is scalable and can reach a mass audience.</p> <p>7</p> <p>Mindset Messaging Each message can be tailored dynamically based on place, day, time, and CRM or loyalty data in order to deliver the most relevant messages to the customers in the optimal mindset to take action. Proven Best Practice Placecast would assist the retailers to create and manage the programs with customized geo-fences and messaging based on the marketing needs and promotional calendars. Consumer Preferences The customers of retailers can manage their messaging frequency and content preferences, which gives them much-appreciated control. Location-Based Analytics Quantitative and qualitative measurements are tacked in order to support the retailers marketing strategy. And for the potential customers of the retailers, what they have to do to enable the geo-fencing is simply fill out some basic information such as phone number, e-mail, age, gender, and zip code, in the AT&amp;T website. (Exhibit 6)</p> <p>Current Applications In General Some companies such as Starbucks and North Face were already using geo-fencing in order to attract their customers. Starbucks Starbucks used geo-fencing to send a coupon to customers through O2 More when they were near a Starbucks chain store. If you're passing a Starbucks and you get a message alerting you to a discount on coffee, then you're much more likely to make an impulse decision to buy a cup of coffee.9 The North Face The North Face, which sells outdoor apparel and gear, launched a new campaign using geo-fencing to send customers text messages as soon as they get near a store in order to lure shoppers into its stores (Exhibit 7). A text message would say, for example, TNF: The new spring running apparel has hit the stores! Check it out @ TNF Downtown Seattle. When someone steps into the geo-fenced area, a text message is sent, but only if c...</p>