What is Proximity Marketing? - Definition & Examples

Instructor: Danielle Reed

Danielle works in digital marketing and advertising. She holds a bachelor's degree in English and an MBA.

In this lesson, we learn the definition of proximity marketing. We also cover an important distinction between proximity marketing and location-based marketing. Finally, the lesson covers a few examples of companies doing proximity marketing well.

Proximity Marketing

Have you ever logged on to your phone, only to see an ad for the store you've just left? Have you ever gotten a text or notification for a restaurant in the same shopping center as the one you are standing in? This is proximity marketing at work.

Proximity marketing is the local distribution of advertising content associated with a particular place. Proximity marketing is extremely relevant in today's marketing and advertising world. According to a survey conducted by JiWire in 2014, 57% of consumers are more likely to engage with proximity advertising. Notifications come to customers' phone and serve as an opportunity to boost conversions.

Proximity Marketing is Not Location-Based Marketing

It is important to note that location based marketing is different than proximity marketing. Location-based marketing is the use of mobile marketing to target consumers in one particular geographic area. It typically applies to larger areas because it relies on GPS and isn't used primarily indoors.

Proximity marketing covers a small area of no more than 50 meters and is used primarily in stores. Reaching the consumer is made possible through Apple's iBeacon technology and Android's similar system option. This technology allows applications to send notifications to users when they are in a store. There are many businesses using proximity marketing for their growth. Proximity marketing dials down to time spent in certain departments, aisles, or even shelves.

Proximity Marketing Through Apps

A targeted offer because of someone's proximity leads to more sales and higher brand loyalty. If customers have your brand's app on their phone, and they believe they are getting value from having this app, you generate sales. Typically, proximity marketing is done through push notifications. Push notifications are messages that pop up on mobile devices which come from a mobile application installed on customers' phone, even without the users actively using the app.

Target

Target, the big box retailer, is doing very well with proximity marketing. The company started with a test of the technology in 50 stores and rapidly expanded it to other locations. Target pushes notifications from its Target Cartwheel app to individual phones depending on customer information and location in the store. For example, if people are standing in the shoe aisle, they get a notification about a sale occurring on select pairs or brands. Target boost app downloads by putting signage in its stores saying things like, 'Save an additional 15% with the Target Cartwheel app. On its website, Target says that customers have saved $978,934,459 through the app as of June 2017.

Urban Outfitters

Urban Outfitters is a housewares and fashion company headquartered in the United States. It rolled out its application to all physical locations last year. If customers use the app, they get specific notifications at certain areas of the store. The main 'conversion areas' identified by Urban Outfitters are the checkout line, fitting rooms, and the entrance of the store. Also, the company further incentivizes customers to sign up for the loyalty program by giving them access to shopper rewards and access to events.

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