Location-Based Mobile Retailing
Location-based Marketing Models

Location infrastructure is just starting to get used by carriers and adopted. But strategic thinking on how to make money off location based services is still in its infancy. Take for instance, the following consumer-type scenario: Imagine a mobile customer inside a mall and carrying her Location Aware 3G mobile phone or WI-FI or 802.11b enabled handheld devices. She is 50 ft away from a Macy's store and 200 ft away from a Dillard's store.

What wireless location-driven pricing/bundling/couponing strategy should each retailer adopt to attract the customer to their store? What location-based incentives should Macy's and Dillard's mail using SMS or MMS to lure her into their respective stores? Given the limitations of the device and the attention deficit nature of consumer behavior, what are the effects on mobile retail strategy? How will the customer choose between the competing mobile offers?

The next mobile marketing problem is the issue of single product incentives versus bundled product incentives. What bundle of goods should be offered to maximize the chain profits once the customer is inside the store? What is the role of CRM in enabling a sophisticated bundling strategy? How do you create a "brick, click and flicks" strategy that enhances customer experience and satisfaction? How do the strategies change if the customer is a first-time visitor versus a repeat customer versus a loyal customer?

Imagine a different location-based mobile scenario. A competitive food court on one of the concourses of an airport has many competing stores vying for customer attention. For instance, Edy's Ice Cream has an ice-cream store in the court. However, at 11.00 AM, the store is empty. How does Edy's use mobile computing to attract and maintain a steady stream of customers? How does Edy's use mobile computing to minimize variation in demand? How do you devise an off-peak or even a "flash" offer that is valid for only a certain length of time to nearby customers on their mobile devices to create a spurt in your demand?

Other key questions that location-based services providers are wrestling with: Will the cost of the infrastructure prohibit it from reaching the very consumers it's meant for? Will the infrastructure be in place to support it? Will consumers even care? Based on the technology diffusion curve, is this the right time to be doing something? 

Want the answers? Creating location-based services (LBSs)? Want to maximize the ROI of the location-based platform investments?