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Will retailers finally master location-based marketing this holiday season?

One of the biggest advances in mobile retailing during the upcoming holiday shopping season compared with last year could be the more sophisticated use of real-time location-based marketing.

Many of the pieces are now in place for a broader, more masterful use of mobile location to engage shoppers, according to several sources, from in-store beacons, applications featuring store mode and geotargeted mobile ads. Mobile marketing this holiday season is also likely to deliver more streamlined purchasing experiences both in-store and online, a deluge of Instagram ads and the rise of e-subscription services.

“While not new in 2015, brands and retailers are rapidly becoming more and more sophisticated in their usage of location and proximity marketing, both of which are proving to be successful tactics for many of our retail clients,” said Jeremy Lockhorn, vice president of emerging media and head of mobile at Razorfish.

“We’re also seeing beacon technology continue to evolve and this may be the year they really have an impact on holiday programs, as many retailers seem to be moving into advanced pilot programs,” he said.

In-store mode
Location-based marketing has been one of mobile’s promises since the beginning, but it has taken years for the necessary infrastructure to be put in place at scale and for marketers to gain an understanding of how to craft contextual communications.

One way that location is likely to play a bigger role this holiday season is wider availability and use of the in-store mode functionality in retail apps. By recognizing when a shopper has entered a retailer’s store, merchants are able to provide more contextual experience that can help address showrooming.

Big-name retailers such as Walmart, Target and Walgreens are among those offering specific in-store content in their apps, with more expected to follow suit as consumers embrace these capabilities.

“Apps go into in-store mode to really augment the shopping experience,” said Christopher Barcelona, executive director of omni experience at Resource/Ammirati. “This move toward in-store mode is part of what we are seeing in terms of addressing showrooming.

“Consumers are really embracing their phones in stores and the best brands are embracing this and providing a much more rich experience in-store through the use of their app.

“We will see a lot more of this this holiday season.”

Dynamic localization
Savvy retailers are also gearing up for a more dynamic use of localization, recognizing how consumers are leveraging mobile to search for items and checking the availability of local inventory in Google results.

Google launches local inventory ads last year, enabling retailers to run shopping ads that are targeted by location and reveal whether a product is available at a local store.

“One key thing that is going on here is trip insurance,” Mr. Barcelona said. “When I set out, I know that the items I am interested in are going to be in stock at places that I am going to visit.”

Retailers will also be taking advantage of the growing mobile inventory available for geotargeted display ads. Retailers can find shoppers using geofencing and real-time GPS and then serve an ad that encourages them to stop by and start their holiday shopping.

“We are seeing a lot of networks coming out with hypertargeted geo-display ads,” said Joe DiNardo, director of marketing at Blue Fountain Media.

“It is more appealing for our clients, particularly those trying to drive offline traffic from digital avenues, to pay higher ad rates if they know they are showing ads to someone who is close by,” he said.

“Publishers are adopting these new ad network products because the traditional repurposing of desktop for mobile isn’t getting the results they need.”

Instagram will also play a much bigger role in retailers’ advertising efforts this holiday season, now that the ad product has been rolled out more extensively.

Retail subscriptions
Beyond location, another mobile tactic likely to make significant gains this year is subscriptions.

Millennials and Gen Xers have been early adopters of using mobile-driven services such as Birchbox for added convenience but, as more retailers jump onboard, consumer adoption could grow.

“This year will be a breakout year in terms of really introducing the notion of e-powered subscriptions,” Mr. Barcelona said. “More and more consumers are embracing the convenience of having frequently purchased items delivered to their door and more retailers are offering it.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York