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Geo-fencing

By Matt Simpson - Friday, May 18, 2012

One of the problems for brick and mortar retailers for many years has been the customer who comes into the store to see or learn about an item and then shop for it somewhere else such as the internet, where the product can be purchased for less money. The retailers have dubbed this show rooming and are looking for any means to put an end to it.

The Problem

We’ve all done it one time or another. The high end audio market was the first to feel the pinch of this phenomenon and to date they remain one of the most affected. Audio gear is something you need to actually be there to research. The same goes for home theater equipment. You can read all the reviews and know all the specs, but you will still want to see it for yourself, or hear it, before you drop a huge amount of money.  It then became commonplace for consumers to go into high end audio stores, learn what they could from the salesmen and audition they were looking to buy. They would however, then turn to the internet to make their purchase, leaving the audio stores as little more than physical showrooms for internet purchases and they weren’t getting a cut of the profits.  Now days, you are hard pressed to find much of the top hardware on display, even if you are lucky enough to find a high end audio store.

Many retailers have found that the boom of Smartphone’s has further added to this problem. Instead of someone shopping and perhaps going home and buying online, reports say that people are now shopping at brick and mortar stores and then making the purchases online while they are standing in front of the product itself. These cut into the biggest thing local retailers have going for them, the impulse buy. Retailers have decided that they can use this same notion against online stores and have begun to institute a policy of Geo-Fencing to save sales.

What Is Geo-Fencing?

Geo-Fencing is a new way of utilizing that location data that is in our phones and will be more prevalent in future handsets. The phones may be able to use Geo-Fencing to actually help us in our daily lives rather than try to breathe new life into ailing brick and mortar retailers.  The implications are far reaching, but some examples that have been given are that Geo-Fencing could alert a loved one or parent when the person is within 5 miles of home. It could also be used to transmit orders to a restaurant as you near it, or even transmit your patient records to registration when you enter a hospital.

The ability for abuse of this system is just as far reaching, imagine a parent being sent a text if the phone they time their child breaks a Geo-Fence and shows them more than a mile from school. Or if a jealous girlfriend gets a text every time you are within 10 miles of an ex-girlfriend’s house. The way people will react to this method is what will really count and it’s still up in the air.

Customer Reaction

I will say that as it stands now, Geo-Fencing is a purely Opt-In option. If you don’t like retailers and others to send you information when you step on their turf, you can simply decline. However, given the absolutely nefarious practices of US cellular carriers, it should be no time at all until we start receiving text spam from carrier approved business that we didn’t ask for. If ATT is a partner with Joe’s Pizza which is in the same block as you and John’s Pizza, which do you think will be blowing up your phone with coupons? 

By that time, it may not matter anyway. It is estimated that there were almost three and a half billion text coupons sent in the last year alone, with this number to grow dramatically this year. A spam filter for your text box may become mandatory, but let’s hope Google comes out with one, because I bet ATT won’t.




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