December 6, 2021

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The Ultimate Guide to Geotargeting in Retail

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One of your customers is Daniel, a 54-year-old businessman from Florida. Another is Ankita, a 27-year-old software engineer from India. These days, it’s common to have an international customer base if you run an online business. 

Having a geographically diverse customer base calls for customization that’s unique to shopping history or behavior on your site. 

Daniel and Ankita differ significantly—in their country, their culture, their age, their gender, and even their shopping preferences. They pay in different currencies, speak different languages, and have vastly different market expectations. 

Offering the same blanket shopping experience to every customer means not accounting for these unique factors. Creating a personalized shopping experience based on location is the key to resonating with each of your customers, no matter where they live. 

The reality is, you can only leverage a global audience by showing them relevant content time after time.

But how can you effectively reach both Daniel and Ankita without breaking your marketing budget? 

Enter geotargeting. 

Geotargeting is a method that uses location-based information to inform ads and content. In other words, customers will see content that applies to them, based on where they’re located. 

So where should you start? In this guide, we unpack everything you need to know about geotargeting and how to make it work for your business.

Table of Contents

What is geotargeting (and how does it work)?

Geotargeting is a way to deliver different types of content that are customized to a website visitor’s location. You can specify how you communicate with customers based on where they’re located via ads, an invitation to a local in-person event, a customized email, or a push notification. 

But how do you identify the location of a visitor? 

The traditional way is through IP addresses. The first three digits provide the country code, and the next ones provide specific areas within a country down to the state, city, and ZIP code. You can also determine a customer’s location through device ID, WiFi, GPS signals, and more. Many ad platforms give the option to create location-based ads. For example, Google Ads geotargeting lets you specify a location variable or set a geographic radius to display targeted ads—like around your retail store, for example. 

Geotargeting is not an uncommon practice in marketing: according to a Location Based Marketing Association survey, 95% of global companies already use location-based data in their marketing strategy.

Brands love geotargeting because it’s one of the most effective ways to offer enhanced personalization to their consumers. Each person’s location has something to say about their mindset, culture, and expectations from a product or service. Knowing where your customers are makes it easy to provide relevant ads and deliver the right message. And you can never go wrong with hyper-personalization: 72% of consumers say they only engage with personalized messaging.

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On the flip side, geotargeting also saves money. Showing irrelevant ads to potential consumers can cost you a sale and result in wasted impressions and clicks. 

For example: JetPet Resort, a pet care company, has three different landing pages—two for each of its locations in Vancouver and one for its Phoenix location. 

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Each landing page is unique to that location—the facilities, pictures, and reviews. By splitting the pages up by location, JetPet can accommodate the unique needs of each facility and the clientele they serve.

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But when you go deeper into the trenches of location-based marketing, you’ll often see other terms used interchangeably, like “geofencing,” “beacons,” and more. In reality, they’re different concepts and target varying subsets of consumers.

Let’s look at the differences.

Geofencing vs. geotargeting vs. beacons

Geofencing is an easy one to picture. Geofencing uses no specific consumer criteria, like behavioral patterns or country. It’s concerned with just one set area—like a fence! All consumers who cross the location “fence” see the same ads.

For example, if a local merchant wants to increase foot traffic at its new store, it could show targeted ads to everyone within a specific (or fenced) radius close to the store’s location. 

So how is this different from geotargeting? 

Let’s say you’ve opened a sustainable clothing store in an up-and-coming area in your city. With geofencing, you can show ads to everyone who’s near your clothing shop. But with geotargeting, you target people near your location and who also search for environment-friendly clothing brands. 

Geotargeting takes geofencing a step further by factoring in shopper behavior, demographics, interests, and location. This makes the consumer experience more personalized and relevant.

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Use geotargeting to reach your target market within a radius close to your store location.

Both geofencing and geotargeting use location data, typically from your mobile device. 

Beacons, in contrast, are physical transmitters that detect when consumers are near, through a Bluetooth signal. They’re roughly the size of a standard Wi-Fi router. Like geofencing, they also stop targeting potential consumers once they move out of the predetermined geographical range. 

For example, suppose you set up a beacon inside your store. You can publish an ad featuring 20% off for a limited time for anyone entering the beacon range. 

Seattle-based department store chain Nordstrom uses beacons to collect data from its mobile app and bridges the gap between online shopping and in-store experience. The app notifies shoppers if any item in their wishlist is back in stock in a nearby store. Customers can even scan and shop if they need another size or color and have the item’s barcode. They just scan the barcode to search online and add it to their cart. 

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Because they’re powered with Bluetooth, beacons work well in areas with no Wi-Fi or with poor data service. They’re cost effective and accessible—available for as little as $25. Prices differ based on signal range, batteries used, etc. But visitors only see your beacon ads if they meet these two criteria: 

  • They have their Bluetooth on
  • They have the branded mobile app you’re using to trigger notifications (and have those notifications turned on, too) 

While beacons may be best for conferences, events, and other short-term requirements, geotargeting is more suited for retailers long-term. Geotargeting also reigns supreme in comparison to geofencing because it takes personalization beyond location and helps you target more relevant consumers.

Benefits of geotargeting

What are the perks of geotargeting?

Boosted sales

A personalized customer experience is at the heart of what turns one-time shoppers into lifelong customers, and it’s a big part of successful geotargeting. 

Despite this, marketers plan on sending just 30% more personalized emails, compared to mass newsletters. Moreover, 40% of marketers think there’s room for improvement in personalizing their digital content. 

How do you begin improving your personalization efforts? By geotargeting. Seventy percent of marketers applying similar advanced-personalization tactics witnessed a 200% ROI

Geotargeting helps add to your consumers’ personalization experience by showing relevant ads based on purchasing history, location, demographics, and historical data. You can even customize your content to fit specific stores, cultures, sales and events, and seasonal products.

Almost nine out of 10 marketers say location-based advertising has increased their sales.

💡 PRO TIP: Want to make your newsletters more personalized? Try adding tags to your customer profiles and creating individual mailing lists for customers with the same tag. This enables you to send more engaging emails to customers with similar purchase histories, demographics, or psychographics.

Increased shopper traffic 

Because geotargeting helps you show the right message to the right shopper at the right time, it’s a great way to improve online traffic and foot traffic to your store.

Online traffic

47% of people bounce from your site after seeing just one page. But it doesn’t have to be that way. Showing relevant ads to shoppers means you increase the likelihood of keeping them on your website and making a sale. Over 44% of consumers say they’ll try a new brand if they see a relevant ad. 

You also waste less time marketing to potential consumers who have no inclination to buy. Instead, you can target the right consumers by showing unique content based on their demographics, location, and shopping behavior—which increases the likelihood of your promotions working. 

Foot traffic

Let’s say you run a flower shop in Philadelphia. You probably wouldn’t want to show up on a Google search for “flower shops” in Manhattan.

Targeted advertising for your customers based on proximity to your physical store—via local SEO—increases your conversions and foot traffic. How? Our research shows that 81% of US consumers say it’s important for them to find a local retailer via searching online. 

Consumers are becoming more and more inclined to search for stores online. Optimizing your website for local SEO ensures you’re visible to shoppers searching for your business. 

Geotargeting lets you share limited-time offers, exclusive deals, and more with your customers to drive sales offline. For example, you can roll out personalized marketing messages to potential customers in the vicinity of your brick-and-mortar store to promote a new product launch.

Dr. Smood cafés in New York and Miami increased their organic traffic by over 320% in just nine months using local SEO tactics. To achieve this result, the brand worked with a B2B SEO agency and used bottom-funnel keywords (e.g., “cafes near me”) and no other content that might drive organic traffic. The results were impressive:

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Dr. Smood built out various pages on its site targeting different keywords it wanted to rank for, added proper schema to its location pages, and optimized its Google My Business listing alongside other tactics in local SEO. 

Gives your ad budget more miles

You can cut down on keyword costs significantly with geotargeting. Terms like “jewelry store” may have high search volume, high demand and high bid prices.

But the term “women’s jewelry store in Austin ” is more specific—also known as a long-tail keyword. While you might reach fewer people with these keywords, you’ll reach the right people. 

Over 70% of searches are for long-tail keywords, and their conversion rates are 2.5 times higher than head keywords (popular keywords with a high search volume). The click-through rates also increase as the keywords become more and more specific. 

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If you use geotargeting for your ads, you can market to the right people every time. A survey from Statista found that 37.9% of respondents say they have purchased a product after viewing either an online or social media advertisement 1% to 25% of the time. 

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Improves your user experience

Crafting personalized messages based on location or events can make for memorable marketing. Shoppers want to feel seen, and geotargeting allows you to speak their language. 

Consumers today are looking for more than money from businesses—they want to know they can rely on the brands they shop with, especially in times of crisis, like the pandemic. 81% of consumers in an Edelman survey said brand trust is a deciding factor in their buying decision. 

Geotargeting allows brands to be sensitive to the consumer psyche, which means shoppers can start seeing you as reliable—and as the go-to brand for your industry. 

Types of geotargeting

You can segment your customers using various parameters when geotargeting: past shopping behavior, location, or even the weather. You can use all three together or separately, depending on your goals. 

Audience targeting

Do you want your customers to feel like you just get them? Audience targeting is the practice of separating consumers into segments based on demographics, interest, historical shopping behavior, and more.

You can go as granular as you like with segments and create campaigns that align with your consumers’ lifestyles and interests. 

For starters, it’s wise to refer to your buyer personas when deciding which demographics to focus on when building your ads. But depending on your goals with audience targeting, you may need to modify your campaigns. Remember, your buyer persona may not always align with the consumers you’re targeting for a specific campaign or product. 

Take Tiffany—its Love & Engagement campaign explored how the brand played a part in real-life love stories. 

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While its key demographic is females interested in fashion, jewelry, and luxury products, for this campaign, Tiffany specifically highlighted customers interested in purchasing engagement rings or wedding bands. 

Location targeting

Imagine, as a customer, you receive an exciting invite for an in-store product launch event … only to discover that the store is five hours away. That would be a bummer, right?

Avoid this by using location targeting, which involves showing ads and other forms of content only to consumers who live within a specific geographical radius. 

With location targeting, you can show promotions, offers, and in-person invites only to relevant consumers. For example, Sephora’s app uses its customers’ location to recognize when they’re in their physical store and then serve them an in-store map, personalized offers, and more. 

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Location targeting also helps you get recommended in the “stores near you” section on the Google search results page (SERP). This is helpful because 72% of consumers who used a local search visited a store within five miles. 

Weather targeting

Weather influences how your customers behave and what they purchase. 

Think: cooler temperatures after a hot summer signal a need for cozy sweaters and slippers. Or an upcoming spring break trip might have some shoppers looking for a new bathing suit or pair of sunglasses. 

You can boost the efficiency of your campaigns with weather-targeted advertising. This is especially true if you sell seasonal-use products. 

And it’s nothing new: Pantene teamed up with the weather channel in 2014 to advertise how its products can help with weather-related hair problems and saw a 28% increase in sales and 600,000+ social impressions

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You can also customize your website based on the weather around your physical store if you’re looking at increasing foot traffic. If it is warm near your brick-and-mortar store, you can customize your website to display summer clothing. In doing so, you reach out to customers who find your product relevant right now

You can optimize your weather-targeted messages for emails, push notifications, digital ads, and more.

Weather targeting can take your geotargeting game up a notch and help your brand become more relevant to consumers—especially if the weather impacts your business. You can see an uptick in sales during certain busy seasons if you practice weather targeting and drive more leads. 

Examples of geotargeting in retail

Here are five examples of brands that have successfully implemented geotargeting: 

1. Chivas Regal

Chivas Regal—a whisky brand under Pernod Ricard—targeted the traveler market by delivering the right message to its consumers at the right time. 

Aiming to reach consumers in transit at UK airports, it used geotargeting to promote two of the brand’s whiskies with a campaign specifically for mobiles that redirected travelers to their nearest duty-free store via a map and directions on a customized landing page. 

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During this month-long campaign, Chivas Regal saw a 70% boost in foot traffic to stores and attributed 126 incremental visits to this campaign. 

2. Purple Mattress

Purple is a direct-to-consumer (DTC) brand selling mattresses, pillows, bedding, and more to customers across the globe. 

Its Sleep Cool campaign was all about how the brand’s mattresses are made for optimal airflow, so you’re just the right temperature—not too hot and not too cold. 

It used weather geotargeting to reach consumers in Phoenix, Arizona. The ad copy was tailored to the city name and current weather. 

Within 14 months of its launch, it became the company’s best-performing campaign. The brand expanded it from just Facebook and Instagram to include YouTube and Google Display Network. 

The company continues to use location-marketing tactics to fuel other campaigns, like promoting local events. 

3. Burger King

In a move called reverse geotargeting, Burger King offered one-cent Whoppers to anyone who downloaded its app within 600 feet of its competitor McDonald’s. 

The campaign was called The Whopper Detour. The goal was to redirect customers away from McDonald’s and promote Burger King’s order-ahead feature in its app. After customers placed an order, the app directed them to the nearest Burger King. 

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Why did Burger King use reverse geotargeting? They wanted to convert the McDonald’s footprint to theirs. And it worked really well. 

The result? 

  • 1.5 million app downloads and 3.5 billion earned media impressions
  • A 37:1 ROI
  • The highest foot traffic the restaurant chains had seen in 4.5 years 

4. Nathan’s Famous

Hot dog brand Nathan’s Famous wanted to boost its digital presence. It partnered with Targetable—a virtual ad agency that generates paid Facebook and Instagram ads for restaurants—to create ads based on what’s trending and target people closest to their nearest location. 

After one month, more than 100,000 customers saw the campaign. The team at Nathan’s Famous said the ads were 10 times more efficient than traditional mailers. What’s more, they also had a lower cost per click than the brand’s other ads. 

The company plans to extend geotargeting to other stores, allowing it to create more location-specific campaigns. 

5. Urban Outfitters 

Clothing brand Urban Outfitters used location marketing to understand its consumers’ preferences better. 

It used mobile location data to gain insight into its audience and deliver messages based on shoppers’ real-time location. For example, it sent push notifications promoting party dresses to women who had recently visited bars and nightclubs.

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By strategically using different forms of communication—push notifications, email, and in-app messages—the retailer witnessed a 146% increase in revenue and a 75% boost in conversions

Use geotargeting for your retail store 

Geotargeting is an efficient way to increase traffic to your store (whether brick-and-mortar or online) and reach specific customers. It matches relevant content to the visitor, helps you get more high-quality traffic, and is a reliable way to experiment with copy based on location.

It’s a win-win for both sides: brands see an increase in sales, and consumers see more content that’s relevant to their lives. 

After all, 36% of shoppers express that retailers need to offer more personalized experiences. 

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