Personalised instant alerts triggered by virtual boundaries and sent directly to consumers’ smartphones are the new weapon being investigated by retailers to gain a competitive edge.

The latest solution from Geographic Information System (GIS) technology giant Esri will enable retailers to place an invisible perimeter – known as a geo-fence – around a storefront, triggering push notifications to customers’ smartphones when they cross the boundary.

Personalised special offers – promotions, time-sensitive discounts or loyalty bonuses – will be delivered directly to the customers’ smartphones to attract them into the sender’s store.

Esri Malaysia CEO Lai Chee Siew said the geotriggered notifications would allow retailers to start a tailored conversation with consumers at crucial moments during their shopping experience.

“Unlike SMS or email campaigns, the technology doesn’t bombard shoppers with random promotional material at an inappropriate time or place,” said Mr Lai.

“Instead – by taking advantage of a smartphone’s GPS features – GIS technology can provide retailers with precise details of customers’ movements in and around their business.

“For example, the technology was used as part of a free virtual racing game in the United States, where players were sent a special promotion from AMP Energy – an energy drink owned by Pepsi Co – when they passed a 7-Eleven store.

“By buying an AMP Energy drink and scanning the can, players received special tips and tricks to help them win the game and claim a variety of prizes.

“This innovative approach to marketing allows retailers to clearly see the link between specific advertising expenditure and the results.

“The campaign drove sales distribution of AMP Energy Orange up 70 percent and total sales up by 5 percent at participating 7-Eleven stores during the promotion.

“Malaysian businesses will be able to use GIS technology in the same way to provide a greatly improved retail experience to shoppers, while taking ground back from competitors,” Mr Lai added.

Mr Lai’s comments follow a recent Nielsen-PayPal joint study, which reported nearly 50 per cent of Malaysia’s e-commerce market – worth RM 3.65 billion – was generated from mobile-related sales.

This figure is projected to reach 59.6 percent by 2015.

The report noted the country’s strong increase in smartphone users, which is now estimated to be more than 10 million, is the key driver for growth in mobile commerce.

Mr Lai added that introducing geotrigger technology early would give Malaysian retailers time to consolidate customer loyalty ahead of big sales events such as the 1Malaysia Mega Sale Carnival, and 1Malaysia Year End sale.

“Early adoption of GIS technology will give established local businesses an edge over incoming retail juggernauts by enabling them to provide superior, personalised customer service,” he said.

”As with many of the standing loyalty schemes – participation to receive geotrigger updates is voluntary, with consumers needing to ‘opt-in’ to receive the offers.

“It is an equal exchange – the customer is prepared to provide some personal information, such as their location and shopping preferences, in return for special offers or higher quality service from the retailers,” he concluded.

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