There is little disagreement among those involved with mobile at major retailers that making their apps location-aware represents a huge opportunity. Because mobile phones travel everywhere with their owners and are always on, location is one of the most powerful pieces of context by which to understand a shopper’s intent and to engage with her in a way that highlights her environment.
However, within the location discussion it’s been interesting to observe different natural starting points for location awareness. Some start with “Macrolocation” and others with “Microlocation.” Macrolocation is the idea of being able to understand when and where a device is at a high level – within a particular neighborhood, a particular store, or a particular public venue (like a park, sports arena, or golf course). Microlocation is the idea of focusing on the inside of the store and understanding in which department or even in which aisle a shopper is standing. Naturally, these two types of location involve very different technologies and can be used (ideally) in complementary fashion.
But most large-format retailers start by focusing on one or the other, and I think it’s useful to talk about the benefits of these two contexts and when one or the other might make more sense for a particular retailer. A bit of important disclosure, we at Digby made the choice to focus our technology on macrolocation – so I promise to be as objective as I can be. I’ll surface some of differences here and ask you to contribute and keep me honest in the comments.
What’s the Goal?
The obvious difference is one of marketing objective. Both approaches will tell you when a store visit happens and how long it lasts. A Macrolocation focus optimizes around the store and the world outside of it, and is more powerful for understanding and driving store traffic. Microlocation focuses on enhancing a shopping experience for someone already inside of the store down to the aisle or department level, and can be more powerful in maximizing the size of the purchase they might make. Macrolocation can lead a shopper to a store, microlocation to an item.
Focus on Shopper Marketing: Advantage Micro
The biggest advantage of Microlocation is, in my mind, how well it aligns with the Loyalist, who is the most likely person to download a retailer’s app. These 50,000, or 500,000, or 5 million people are the people who visit the store most often. As such, a retailer might not need to focus on driving additional store visits as much – but will and can focus on driving up the size of purchases during a store visit by enhancing in-store service and delivering timely offers.
Meaningful Segmentation and Analytics: Advantage Macro
The biggest advantage of Macrolocation is how location at the macro level is much more meaningful than at a micro-level. For instance, interacting with a shopper based on whether they are in-store, in a region of a city, at a local sports event, or in a local park is more meaningful than whether they are in aisle 3 or aisle 7. Location suffers from a signal vs. noise problem in terms of how useful it is when you get to a small enough scale. For instance, if you followed me as I walk all over a store looking for that cleverly hidden peanut butter (is it a vegetable? a baking item? a snack?), you might get all the wrong cues about what I’m interested in. Inside of the store, personalizing on what I scanned, on what’s on my app shopping list, or what I’ve bought in the past is probably more valuable than where I’m standing.
I know I’ve positioned this as a battle between two ways of looking at location, but honestly there are ways to do both very well and make them highly effective for a retailer. Knowing the right situations to focus on one over the other and understanding the pitfalls of each and how to overcome them is the key to effectively bringing location to your mobile app.
What other considerations might I be missing? Micro or Macro?