Business-savvy brands know that the most lucrative way to woo shoppers is to move with changing times. Currently, the change compass is pointing toward social-networking and new media. And the hottest trend in technology right now is geolocation applications – more specifically, apps that can pinpoint the user’s exact location (called “geotagging”) and offer them real-time benefits – the latest sample sales in their 4-block radius, for example.
These apps have caught the eye of major brands in a range of industries, from food to fashion. And many retailers are seeing great benefits from partnering with them. Case in point: Two weeks ago, the online coupon site Groupon hosted a 24-hour flash sale for the Gap, which yielded over $11 million in sales.
Ann Taylor and Starbucks have also jumped on the bandwagon. Both partnered with Foursquare, the incredibly popular geotagging app that lets users “check in” to locations like bars, restaurants, and shops.
The collaboration between Ann Taylor and Foursquare, which began last month, offers shoppers 15% off a full-price purchase the fifth time they check in at any Manhattan store. According to Mashable, the deal will become a nationwide promotion if it proves successful for Ann Taylor in New York.
Granted, there could be some hurdles for Ann Taylor on this one: 40% of the retailer’s target demographic are women between 35 and 49, and older shoppers have been reluctant to embrace apps that let the world know their exact location. As the New York Times recently reported, “for all the attention and money these apps and Web sites are getting, adoption has so far been largely confined to pockets of young, technically adept urbanites. Just 4 percent of Americans have tried location-based services, and 1 percent use them weekly, according to Forrester Research. Eighty percent of those who have tried them are men, and 70 percent are between 19 and 35.”
Meanwhile, the Starbucks/Foursquare promotion has been going strong since May. Foursquare users who become “mayors” of a specific Starbucks branch (which occurs when you have the most check-ins at a that location) get to shave $1 off the price of their Frappucinos. No data is available yet on whether the promotion has led to higher sales for Starbucks, but we’ll be following the story in the coming months.
TheHighLow spoke to Foursquare founder Dennis Crowley about the application’s ability to appeal to major brands. “With Foursquare,” he said, “we’re trying to create a platform that encourages and rewards people for experiencing things in the real world. That’s why our points/badges/mayorships/specials are tied to finding new places…and showing loyalty to the places you’ve found that you enjoy. We’re finding that brands enjoy Foursquare as it gives them a chance to connect with fans of their content when they are ‘away’ from the television, magazine, newspaper, etc.”
Still, geo-location based apps have yet to prove their long-term success for retailers. But Crowley is optimistic: “As more people start [using] these apps and experiencing the benefits of sharing information about the places they visit, any trepidation about sharing your location with trusted friends will start to disappear….Over time, people start to learn that when they share pieces of their life online, life becomes richer and more interesting.”