When marketers talk about geofencing, it’s usually in the context of pushing offers to potential customers when their smartphone enters a specific zone. It’s been a pillar of strategy for retail brands looking to connect with customers in real-time. And for those doing it well, it's paying off in a big way.
The ruthless efficiency behind the rise of Amazon -- remember, the company was initially going to be named Relentless -- has given way to what some call “The On-Demand Economy.” Other services -- think Uber/Lyft, Postmates, Favor, etc. -- have sprung up around this. Even Netflix and Prime are examples. The basic tenet they all have in common: customers expect things to be there almost immediately. As The Wall Street Journal said as far back as 2015, the on-demand push is “reshaping society as we know it.”
Well, increasingly retailers are feeling pressure there -- and specifically logistics managers. If you’re a mid-size brand and aren’t in bed with Amazon in terms of having a dedicated shop, how can you compete with the customer experience of Amazon? Close to 72% of retailers are attempting to enter the same-day delivery world, which can be an emotional and physical drain on resources.
This all matters majorly monetarily too: research from the Georgia Institute of Technology on supply chain issues shows that companies with those types of issues report 6.92% lower sales growth and 10.66% higher growth in cost.
Geofencing allows for a better customer experience because it can provide real-time alerts to customers on where their package is. Let’s say your package enters the fencing zone on a truck and you immediately receive a push notification that it’s nearby. Or, if it's with Amazon, you can get real-time tracking on exactly where your package is en-route:
Image Source: The Verve
From a business perspective, geofencing also addresses that Georgia Institute of Technology stat above by delivering real-time intel to managers on route problems and general delivery glitches. Logistics directors can replan routes based on construction or other recurring issues.
The customer side and the organizational side get married together when a customer can use geofencing and push notifications to alert a brand that the package has been received safely. Brands can build a conversational exchange off this interaction, including pushing about quality of delivery, packaging, and initial experience. Using those conversations effectively can help with customer retention, which is obviously a cornerstone of any brand strategy.
And lest you think this is all about brown and white trucks whizzing around your neighborhood, it’s all going to move to the skies. Big providers like Amazon, Walmart, and DHL are already wading into the regulation space for geofencing and avoidance technology around drones. In five years, you might be getting a push that your Charmin is about to be dropped into your backyard. That’s honestly not even a joke. It might be happening that soon.
97 percent of the way we’ve thought about and discussed geofencing for years is around ads, customer acquisition, and event/trade show management. There’s another side, though! It’s a bedrock element of the on-demand economy’s growth and customer satisfaction rates.
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