2014 CX Predictions: eBook and the Coming of Geofencing

January 9, 2014

I was honored to take part in a recently-released eBook entitled:

CUSTOMER EXPERIENCE PREDICTIONS 2014 | Views from Customer Experience minds from around the globe

If you are looking for insightful predictions as to what 2014 will bring to the field of customer experience or just a little inspiration, this eBook will get you thinking and focusing on your 2014 strategies. This collection was assembled by Chantel Botha of BrandLove and includes these great customer experience experts and thought leaders:

To check out the eBook, click here.

My entry in the eBook is included as today’s post. Please enjoy and let me know: what’s your prediction for 2014?

Predictions are tricky business, and single predictions are the trickiest of all. One change in the customer experience space for 2014 is that mobile engagement through geofencing will begin to see mainstream adoption.

The year 2014 is likely to see a number of advances in customer experience management. From the increased prevalence of customer experience positions in large organizations to the further acceptance of social media as a customer channel, 2014 promises to see exciting changes for those who work in the customer experience field.

Among those changes is a move towards increasingly real-time customer interaction and feedback underpinned by the continued increase in mobile usage.

For many years, online retailers have been leading the way in using technology to create real-time customer interactions. Pop-up surveys, post-transaction emails, and even text messages have increased contextual engagement and drastically shortened the time between purchase and feedback.

2014 CS Predictions: Rise of Geofencing

In 2014, brick and mortar organizations will begin to take this shortened cycle to the next level with mobile apps and, in particular, geofencing.

Geofencing is the concept of creating virtual boundaries, based either on global positioning systems or RFID. These boundaries form an invisible “fence” of sorts, which trigger notices or actions when they are crossed.

The combination of mobile apps and geofencing promises to create five key benefits for brick and mortar retailers in 2014.

1. Fighting Back Against Shopping Apps

One of the challenges brick and mortar retailers have faced in recent years is from shopping apps, like Amazon’s Price Check app, that allow customers to compare an in store price with online prices. This trend of “showrooming” has been challenging for retailers like Best Buy that incur massive costs in rent, labor, and inventory only to be used as “Amazon’s showroom.” However, brick and mortar retailers can use geofencing to fight back against showrooming by pushing special offers directly to customers on their sales floor.

2. Fencing the Competition

Geofencing creates an opportunity for companies to interject themselves between customers and the competition. Geofencing competitors presents an exciting opportunity to help prevent defections and customers who might “test the waters” elsewhere. How does this work? Let’s say a customer gets within 100 feet of a company’s closest competitor; the company’s app could instantly send a message offering a coupon or offering double rewards points for the company’s loyalty program.

3. Geofencing Complementary Uses

Once an app is installed, it can be used for any geographical construct. Instead of just fencing competitors, organizations can also fence complementary uses. 1-800-Flowers geofenced jewelry stores (link no longer available) that were close in proximity to their flower stores, based on the idea that people shopping for jewelry might be in the market for flowers also. Shoppers near the targeted jewelry stores received a coupon for a flower bouquet.

4. Generating More Data

As if organizations did not have enough data to sift through already, geofencing adds another layer onto the mass of mobile and location data being generated by customers already. Analyzing data from geofencing campaigns, American Eagle was able to pin down purchase interest based on time of day and location and to find that “location-relevant messages sent at the most opportune time in a consumer’s day drove purchase behavior as high as 65 percent.” Geofencing data has the potential to be highly actionable data.

5. Generating Real-Time Feedback

Geofencing has the potential to provide opportunities for generating customer-feedback in real time. Brief surveys or other feedback mechanisms can be delivered to in-store customers while they shop, giving organizations the opportunity to generate instantaneous feedback and to quickly address service issues while they are still in their early stages.

If all of this seems a bit stalkerish, that’s because it is. Geofencing has a number of challenges, not the least of which is how to do it well. Organizations must create apps that offer value to customers without being creepy, that benefit the organization without being salesy, and that are appealing enough to be installed in the first place.

Therein lies the second great challenge to geofencing: end-user adoption.

Can organizations get enough consumers to install their apps to produce a positive ROI on the investment and effort? Like many initiatives in the ever-changing world of digital technology, organizations will have to decide how much to invest in testing and developing apps with little prior history to help predict the likelihood of success.

The North Face began geofencing its stores, as well as parks and ski resorts in 2010. By 2012, it only had 8,000 people signed up. And The North Face is a national brand with a very devoted following. If The North Face found it challenging, how well will a five-store chain of pizza parlors do with it?

However, the challenge of adoption that organizations have struggled with in the past is one of the reasons geofencing is my prediction for a customer experience area that will see a significant increase in 2014. As more and more of life and business moves to handheld devices, businesses will become more inventive using geofencing to create value for customers and to encourage greater adoption. As adoption increases so will the resources dedicated to improving the apps – a circle of self-reinforcing improvement and investment.

Inevitably, some organizations will overreach. 2014 will see news stories of geofences that “cross the line” much as big data has seen over the past few years. However, organizations will find their sea legs soon enough and find the right balance between providing customers value and providing customers space.

2014 will be a transformative year for customer engagement through mobile devices. Geofencing is likely to be central part of this transformation.

1 thought on “2014 CX Predictions: eBook and the Coming of Geofencing”

  1. Pingback: Customer Experience Benchmarking:The State of Mind of CX Professionals

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