Proximity Marketing: why it is so important for Digital Marketing

In 1960, Professor McCarthy rose to prominence thanks to a book that went down in history. The work was entitled “Basic Marketing” and exposed the concept of the 4Ps, the mix of factors that must be taken into consideration to define an efficient strategy. Today, with the ever-changing market and individuals perpetually looking for information that not even they know they need yet, the need to add a fifth P has emerged: that of proximity.

In this article I will try to introduce the concept of Proximity Marketing, assuming that this tool is much more than a few lines written on a white sheet, telling the nature and applications of this revolutionary tool, whose potential is still far from being fully exploited.

What is Proximity Marketing, and how it works

Let’s start with a simple question: if there was one, what would be the dream of every single advertiser? It can be said with certainty that the development of a highly personalized and therefore effective commercial message, delivered to the right person, in the right place and above all at the right time comes close to this concept. Utopia? Well, with regards to the profiling and personalization of the message, it is necessary to consider many factors of which the brands themselves are protagonists. About the place and timing of delivery, today’s technology opens the door to unprecedented strategies.

This is where Proximity Marketing comes into play: also known as Local Marketing or Proximity Advertising, it uses the localization and proximity of persons to “ad hoc” technologies for sending multimedia content on mobile devices. Brands therefore have an available tool to convey their messages to people physically close to their products and when their propensity to buy is greater.

But let’s take a step back. How exactly does it work? What technologies do you need to have to take advantage of this opportunity?

The technologies of Proximity Marketing

This marketing technique is highly technology-enabled, that is, dependent on the use of technologies. To implement it, the person you want to interact with must have a smartphone. Of course, this is not an obstacle: testifying to the enormous potential of this new practice, the number of individuals who possess a smartphoneis growing exponentially every year, reaching the figure of more than 3.8 billion users in 2020 (Statista, 2020). This makes each of us a potential target for a proximity marketing campaign.

The technologies that make the transmission of this content possible are:

• Bluetooth: this technology is now present on every mobile device. Devices that use Bluetooth can be identified at a distance ranging from 30 to 500 meters.
• Wi-Fi: it is a very widespread type of network and is used mainly by physical stores. Its criticality is that it is not particularly effective in detecting devices within a limited area and requires credentials to be used.
• NFC: acronym for Near-field-communication, this technology used for short-range communication (often equal to or less than 10 cm) is employed, for example, to make contactless electronic payments possible.

The Beacons: a tailor-made device for Proximity Marketing

Finally, let’s focus on Beacons, small wireless transmitters that can be fixed anywhere: on the walls of a shop, in public places or even inside fairs or other events. The beacons use Bluetooth low energy technology to send signals to other nearby smart devices. Put simply, they make location-based searching and interaction easier and more accurate. Created specifically to facilitate the practice of Proximity Marketing, this technology has made great strides since it was introduced by Apple in 2013. Its only criticality lies in the fact that to reach the mobile device it is necessary for the user to have downloaded a specific application that allows the identification of the smartphone and the communication of incoming information.

However, their operation is very simple. The beacon sends a unique signal that is recognized by the nearby smartphone; the retailer’s app, previously connected to the beacon, sends a signal to its internal platform which in turn returns one to the app, ordering an action to be performed. The application processes the consumer’s data and finally sends the personalized content to the nearby device.

The advantages of mobile Proximity Marketing

Now that we have explored the nature of this technology and the devices that make its application possible, let’s move on to an even more interesting aspect, namely the reasons that prompt brands to use this technique to interact with people.

The advantages of proximity marketing for consumers

On the consumer side, the main benefit brought by proximity marketing is undoubtedly a more engaging and personalized shopping experience. Everyone likes to know that their favorite brand really knows you. Through this tool, we can receive promotional coupons or generic information on products that are likely to catch our attention – a guess made by technology based on a past shopping history. This dynamic produces a better “fit” between our desires and the products offered by the brand, increasing customer satisfaction, our willingness to pay and, indirectly, brand loyalty.

And for brands? All the advantages of proximity marketing

And here we come to brands, for which the benefits of proximity marketing are numerous:

• Advertising: proximity marketing offers personalized advertising in the right place and at the right time, predicting the moment when we will be most likely to make a purchase.
• Personalization: thanks to high personalization, brands can build long-term relationships by offering us tailored experiences. This not only makes us happy, but increases engagement and the probability of a purchase.
• Access to data: this is perhaps the greatest advantage. Proximity Marketing gives access to data relating to offline purchasing situations. This type of data is usually more difficult to capture due to the invasiveness of the detection methods. Proximity marketing, on the other hand, acts as a bridge between online and offline shopping, supporting the development of a more solid commercial and marketing strategy for sales in both channels.
• Increase in use of the App: by sending notifications and offers, our interest in the application increases significantly.

Practical examples of proximity marketing that improve the shopping experience

Who is already using this tool? What do these initiatives actually look like? Let’s take a look at some best practices of famous brands.

One of these is certainly Amazon Go, which has decided to use beacon sensors and cameras within its superstore to monitor which objects were picked up by the customer. When the consumer added something to their basket, the monetary value was added to their virtual card, automating the payment via the online account. In doing so, the brand eliminated the checkout and customers no longer had to worry about the checkout line. Definitely a step forward in the development of a more fluid and effective customer experience.

Another example concerns Carrefour. The French large-scale distribution giant has equipped some of its hypermarkets with iBeacons networks to ensure that its consumers can orient themselves within the stores, from area to area. The app was then sent information about promotions, products and personalized purchase suggestions while at the same time purchasing information was collected. The number of the App users has grown by 600% in seven months.

Data processing

If Proximity Marketing is truly a win-win situation, why has it not spread like wildfire among the major players in the Retail sector yet? Perhaps the reason lies in the fact that Proximity Marketing is a constantly evolving world, whose diffusion dynamics depend on a subject as important as it is thorny: privacy. In fact, companies must comply with a series of European regulations that define the processing of data. Once this knot has been dissolved, even the most skeptical subjects will be able to change their minds and brands will be able to tap into the full potential of a revolutionary marketing tool: a bridge between two worlds, online and offline, which seemed destined to travel on parallel tracks.