The trend towards location-based marketing is growing and getting some well-deserved attention with the recent developments and statistics provided in regards to consumer use of mobile coupons. Location-based and proximity-based marketing, a rapidly expanding channel combines the benefits of digital and mobile interactions. In particular, marketers are increasingly using this channel to deliver digital coupons and other sales promotions to reach consumers. From an advertising perspective, this medium is particularly effective because the mobile channel is ideal for reaching today’s technologically-savvy consumers within the context of a place, location or proximity to a retail space.
Consequently, there has been a significant growth in mobile and location-based promotional services such as Groupon, Yowza etc. In addition, many retailers and companies have started using these promotional methods to attract, and retain consumers. Kraft Foods Inc. has released software for Apple Inc.'s iPhone that help consumers find a recipe or create shopping lists. Supermarket chains Kroger Co. and the retailer Target Inc recently expanded programs that let customers redeem coupons using mobile phones. More recently, super market chain Stop & Shop has been testing opt-in apps that push coupons to consumers based on tracking their location in a specific product aisle inside the supermarket.
However, companies are still a bit unsure as to the true impact these types of marketing can have, largely in part due to the lack of specific research. A recent report by the mobile marketing association and NCH marketing services suggests that mobile and online coupons account for barely 2-3% of total coupon redemption even though the sector is growing at a phenomenal rate. Given this, businesses struggle to implement effective location-based marketing or mobile coupon promotions that would work best for them.