Is Location-Based Communication Changing Retail?

Since the advent of the World Wide Web, businesses have used the internet to connect with potential customers. Recently, the popularity of social networking sites has allowed retailers to market their products and services to consumers even more efficiently, with statistics showing that businesses are projected to spend nearly $220 billion in social media advertising alone to reach over 5 billion users across multiple platforms in 2024.

However, today’s consumers are becoming more savvy about and resistant to the manipulation of both inaccurate information and data privacy concerns on these platforms. As a result, many are beginning to realize the one-sidedness of many of the connections they form online.

The solution to these issues is location-based communication — a technology that allows users to build private online ecosystems where they can interact with their favorite brands, people and other entities. While people are growing increasingly disillusioned with social media because they realize that these platforms do not actually help them, location-based communication is designed to meet the user’s needs.

The digital ecosystems users build through location-based communication expand when they visit locations such as retail stores, hotels or casinos since they are temporarily added to that location’s ecosystem. This opt-in-based system allows users to curate their experiences to their own needs and interests, giving them almost total control over who and what they see.

Why Retailers Cannot Connect with their Consumers

Unfortunately, many retailers have begun to abandon the sole thing that differentiates them from online experiences: the human touch.

A recent survey from Qualtrics shows that over 50 percent of customers would prefer a retail shopping experience with human interaction. Despite this, retailers continue to implement automation in their operations with features such as self-checkout and order pickup. In essence, retailers are automating themselves out of business.

Consumers are also becoming used to a world where technology companies treat them like little more than data points. Even though 48 percent of users have made a purchase after seeing an ad on social media, 74 percent report being “tired” of social media advertisements. Social media platforms like Facebook, Instagram and TikTok claim that they exist to better connect us with one another when they are actually part of what is causing us to drift further apart. People think they are accomplishing something on social media, but thousands of likes on a photo hardly amount to a genuine connection.

Similarly, social media platforms claim to be customized to the needs and interests of the user, but these platforms’ “for you” pages are actually driven by algorithms that primarily serve the advertiser — not the user. In contrast, location-based communication allows users to build their networks themselves by inviting other users and businesses to interact with them and join their private networks.

Social media has also evolved to a point where these platforms earn most of their revenue from selling user data to advertisers. Ultimately, these apps sell their users’ data for what amounts to around 2 cents per minute of screen time per user. This statistic makes it clear that these platforms are not interested in the needs or interests of each user but in their behavior on a macro scale, which is how they can be marketed.

At their core, contemporary social media platforms are not services — they are data collection companies. Location-based communication, on the other hand, is centered around a business model that does not derive value from user data.

Yet, while technology has been partially responsible for the woes of retail, a different type of technology may be the solution. With the help of devices that people carry in their pockets daily and location-based communication apps, businesses can form a better connection with their customers, personalizing their experience and amplifying the impact on employees.

How location-based communication provides value to retailers and consumers

The purpose of location-based communication is not to collect and sell consumers’ data to advertisers. Instead, it is to provide legitimate value to all parties involved in the transaction.

For example, in a retail environment, consumers receive benefits like personalized recommendations, access to help when needed, and even discounts. Retailers, on the other end of the transaction, benefit from a more engaged customer base.

Furthermore, since location-based communication does not require the collection, storage and transmission of data, it offers substantial data privacy benefits that set the technology above and beyond other communications offerings. Data is not stored in a place that makes it valuable to the wrong people because users are off-the-grid in a private ecosystem. They have to opt-in to share their information with entities like retailers when they visit a physical location, and when they leave, they are returned to the private ecosystem they have built.

Location-Based Communication is a Powerful Tool for Businesses

Any entity that understands the value of having a more engaged consumer will benefit from the power of location-based communication. This powerful technology has revolutionized not only the field of online communication but also every industry it has served. For businesses hoping to form a genuine, meaningful connection with their customer, this technology cannot be ignored.

— Scott Swanson, an expert in global infrastructure and platform development, leads Bonder, a groundbreaking location-based communication platform revolutionizing how the world connects and communicates. With nearly two decades of Silicon Valley expertise, Swanson champions a fusion of technology and humanity, positioning himself as a trailblazer in revolutionizing technology that improves human experiences.

Scott Swanson, Special to California Business Journal