Proximity Marketing

Proximity marketing is a sales marketing strategy, where the advertising messages are transmitted to mobile devices such as smartphones. As this is usually done via Bluetooth, proximity marketing is also often referred to as Bluetooth marketing. The relatively new form of targeted advertising is sometimes the subject of controversial discussion.

General information

The principle of proximity marketing is based on targeting customers in retail stores. This can be carried out - with Bluetooth, GPS or WiFi - for example via push notifications or other methods. For example shopping vouchers can be shown to the customers, and advertised products can be presented in a focused way. Routing systems can also be implemented, or certain offers can be made if the customer stays at a location for a longer period of time, or discount coupons can encourage faster purchases. The earlier the customer buys, the higher the discount.

Criticisms of proximity marketing and technical requirements

For proximity marketing to work, appropriate transmitting units are required. These are called "beacons" and are about the size of a two-euro coin. The transmitters are placed in different places in the store, the more of them there are, the more reliable they can work. Beacons only send their own ID and are not able to receive data. For them to work, the Bluetooth function must be enabled on the receiver.

For Proximity Marketing to be used successfully, it is necessary to integrate all employees into the system and provide them with information about the technology, otherwise there is a risk that employees feel monitored or spied on. It is therefore important to make it clear which data about proximity marketing has which functions, and what it can and can’t do. Employees also need accurate information about what customers can see on their smartphone so that they can focus their advice on it and not repeat what the customer already knows[1].

Similarities and differences between location based marketing and proximity marketing

Location-based marketing works in a similar way to proximity marketing, but the area to be delimited is considerably larger. Location-based marketing is about using the area around a location for marketing. With this form of advertising, customers cannot be localized as precisely as with proximity marketing, which allows them to be located almost to the point.

Geofencing, a kind of invisible fence, is used for location-based marketing to work. When the (potential) customer enters the area that this "fence" encloses, they are registered and approached by the advertising company. Geofencing can therefore be regarded as the counterpart of the beacons used in proximity marketing.

Both methods are used to locate customers in order to make targeted advertising, but proximity marketing provides more precise information, while the area to be located is much smaller than location-based marketing. Which method is better depends on the business model – proximity marketing is often used in shops and department stores. [2].

Strategy and dosage are decisive for success or failure in proximity marketing

Proximity marketing can be understood as the further development of classic marketing tools such as flyers or brochures that are distributed on the street or in shopping centers. In proximity marketing, however, information can be provided to (potential) customers in a more nuanced and personalized way. However, the method should not be exaggerated, as otherwise those addressed may quickly feel annoyed. In addition, push messages or other forms of communication should be geared exactly to what one wants to achieve, for example a longer retention period for the customer at a location or the cross-selling concept. To get the right dosage of advertising, it helps to take the customer perspective into account, combined with the question: What does the customer want and what will bring them the most without feeling annoyed?

The mere fact that you know where the customer is in the moment is not enough to make specific offers. As mentioned above, the employees of a store must know as exactly as possible what information the customer already has in order to use proximity marketing effectively. In addition, notices can be sent to the customer relating to products in the immediate vicinity of the customer, or the customer can be encouraged to move from position A to position B by a guidance system or the gamification approach. Ultimately, the aim is to put oneself in the customer's shoes and make shopping easier for them. For example, if the customer is standing by televisions, additional information can be displayed to make it easier for the customer to make a purchase decision or to compare different devices[3].

Significance for online marketing

Proximity marketing is becoming more and more important for retail in particular, but other sectors can also benefit from it. Used effectively, proximity marketing can increase sales and strengthen customer loyalty. In the long term, certain industries will not be able to keep up with the competition without proximity marketing.