Geofencing is a relatively new marketing tactic. As with any marketing tactic, people like to wait and see if it really is as effective as it claims to be before adopting it themselves.
The good news is that geofencing has already proven itself several times as an extremely effective marketing tactic. A report issued by Market Research Future estimates that the geofencing market will grow to $2.2 billion by 2023. That’s good news for proximity marketing companies.
We are going to take a look at some specific examples of successful geofencing ad campaigns. The success of these campaigns indicates that geofencing has the potential to generate extremely high ROI for marketing efforts.
5 Examples of Effective Geofencing Applications
1. Sephora Store Companion
Popular makeup and beauty product retailer Sephora has a nifty store companion app that makes use of both geofencing and geotargeting services. The companion store app activates whenever a customer enters the store and draws from their past purchase history to push and recommend specific products. This campaign has been successful in generating high customer satisfaction and loyalty by delivering a personalized experience.
2. Van Leeuwen Ice Cream
New York-based ice cream store Van Leeuwen started accepting mobile payment options and developed a neat geofencing tactic that utilizes location data from PayPal. Customers who opted into the campaign would download PayPal onto their phones and link their accounts. The app would then use geofences to push notifications to authorized PayPal users when they were nearby a store.
3. Whole Foods
In 2018 Whole Foods launched a geofencing marketing campaign that placed geofences around competitor stores and a number of Whole Foods stores to push ads and deals to anyone who passed by. Whole Foods reports that their “geoconquesting” (placing geofences near competitor businesses) campaign yielded a 4.69% post-click conversion rate which is more than 3 times the national average of 1.43%.
Walgreens uses geofencing to boost customer retention rates and promote participation in their rewards programs. When customers enter a geofenced location, the Walgreens app pushes a notification and lets customers check their account and any promotional deals. The geofencing application pushes promotional offers from Walgreens’ rewards program.
5. Burger King
Lastly is the recent Burger King geofencing campaign which set up 600-feet fences around nearby McDonald’s restaurants. Whenever customers would enter one of these fences, the Burger King app would push a one-cent Whopper deal to entice customers to visit Burger King instead. This hilarious troll campaign resulted in millions of Burger King app downloads.
Every marketing strategy needs some time to prove its efficacy. Geofencing has already done that and more. These real-world examples of successful location-based marketing campaigns demonstrate that geofencing is an effective marketing tool.