What is the sale by geolocation in ecommerce?

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Angela de la Vieja

Geolocation in e-Commerce is one of the sales techniques with the highest potential for retailers. Now that users use mobile devices such as smartphones to make their purchases, offering products, special deals and personalised prices, based on their location is an opportunity that cannot be left untapped.

But, let’s start at the beginning. How do sales by geolocation work? The approach is simple: thanks to systems that are already incorporated in each and every one of the electronic devices used today, online stores are able to identify the place from which the query or purchase is made and return the best results for the user's search. Later, with all the background data collected, the technology will detect trends by area, study purchasing parameters and, finally, define a localised, satisfactory pricing strategy for the potential audience from a specific place.

In e-Commerce geolocation can intervene in three possible ways to enhance the sale:

  • As an element which allows adjustment of a pricing strategy by location.

  • As an attention-grabber to promote offers by area.

  • As a measurement of interest by area for certain products or categories.

Undoubtedly, for online stores, geolocation is now a key point for further development to improve the user experience. A corporation such as Inditex already requests users to select a region from the moment they enter the web, for each of their different brands, in order to adjust, while navigating, the results from the catalogue to their location. Thus, for example, potential clients can check in which physical stores you can see the product in person and even see where the nearest collection points for your orders are in your area.

Also, worth a mention is the case of Amazon, who obviously varies product prices and shipping costs depending on the location of the user making the purchase.

On the other hand, we must also take into account the impact that this technological development can have on an e-Commerce. To sum it up briefly, we could say that three supporting areas will be necessary:

1. A geolocation web system to be able to register the location of the IP or the device of each user.

2. Artificial intelligence technology, or machine learning, capable of making personalised offers to selected users by area.

3. The software or dynamic pricing tool which allows the store to adapt its prices based on the customer location.

Knowing your target audience thoroughly as a method to make more sales

One of the main benefits of activating the possibilities of geolocation within an online store is the exhaustive knowledge about the audience that can be compiled. We already know that the path towards the most extreme personalisation is the door that leads to higher sales ratios and, therefore, knowing which potential clients share common features, such as their location, is the key to improve penetration and user loyalty of a brand within those regions.

However, in the face of this assertion, there is also reason to believe that this could bring audience suspicion regarding their own privacy to the forefront. All the geolocation systems for e-Commerce need to be able to access the location data of their users in order to be effective. In some cases, mainly web versions, the user must indicate where they are (although in many cases the browser itself can already locate them it by itself); in others, like using a mobile app, the user will have to grant a direct permission to 'read' their location through the settings of their device.

What would happen if, suddenly, it turns out that the audience does not want to receive personalised information of this type? Perhaps this is precisely the challenge for new marketers and sales managers: to generate added value of such dimensions that the audience decides on their own to give-in to it. At the end of the day, the list of possibilities of this happening is now much greater since in the midst of a panorama so saturated as that of online sales, the factors of accessibility and time of purchase will be key.


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