Times have been tough for brick-and-mortar (BAM) retail locations over the last few decades. First, increased numbers of big-box superstores with wider selections and lower prices drove consumers away from the traditional mom-and-pop shops. Then came the rise of e-commerce, which enabled consumers to find and pay for the merchandise they needed easily and securely from their homes.

1. COULD LBS BRING TRADITIONAL
RETAILERS BACK TO LIFE?

2. © MWW GROUP, ALL RIGHTS RESERVED 2
COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
Times have been tough for
brick-and-mortar (BAM) retail locations
over the last few decades.
First, increased numbers of big-box
superstores with wider selections and
lower prices drove consumers away from
the traditional mom-and-pop shops.
Then came the rise of e-commerce,
which enabled consumers to find and pay
for the merchandise they needed easily and
securely from their homes.

3. © MWW GROUP, ALL RIGHTS RESERVED 3
COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
High unemployment rates, increased
prices for goods and services, and often
steep discounts for buying online have
all resulted in a significant decrease in
consumer foot traffic to BAM locations,
and in turn, lower revenues. Here in the
U.S., Home Depot saw a 1.9 percent
decrease in in-store customers this
year, while Lowes, its main competitor,
saw a 3.4 percent decrease in
customers going to stores that have
been open more than 13 months. And
even though the consumers who are
shopping at BAM stores are spending
more than usual, the lack of volume is
having a significant impact on retailers’
bottom lines.1
Many big-box retailers are looking
to traditional solutions to this issue,
such as reducing overhead costs by
decreasing the amount of space their
stores occupy and focusing their efforts
on building online sales. However,
exploring new social media marketing
strategies may actually be the key to
increasing foot traffic to their BAM
locations. Widespread consumer
adoption of social media networks
and location-based services (LBS) like
Foursquare, Facebook Places, Gowalla,
and Loopt create a completely new
avenue through which retailers can
interact with their target customers
and give them shopping incentives that
go beyond simple discounts and sales.
The number of BAM businesses and
industries that are tapping into this
goldmine of consumer engagement
potential are growing every day. Many
location-based service applications
were originally designed to give
consumers a fun way to stay in touch
with friends and colleagues while on
the go. They have quickly evolved into
marketing tools that enable businesses
to grow their reach among consumer
audiences in specific geographic
locations and create value-based
interaction with customers in ways
unique to social media.
Though retail giants like Wal-Mart, Home Depot and Best Buy tried to stay competitive by
adding shopping functionality for consumers to their Web sites, this strategy has not been
enough in these tough economic times.
Location-based service
campaigns enable BAM
brands to directly engage
consumers within location-
specific areas, encourage
patronage and increase
positive brand perception
and recognition like never
before.

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COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
HOWLOCATIONBASEDSERVICESWORK
A free web-based account that’s
connected to the phone app tracks
a user’s participation and turns day-
to-day activities into a game. Users
are rewarded with points and badges
for check-ins, provided with reviews/
comments from other consumers
about the places they are checking
in, information about the location and
what’s nearby, and recommendations
for additional activities. Interactions
with location-based services can
also be shared with a user’s social
networks, such as Facebook and
Twitter, enabling them to easily
communicate about where they are and
what they’re doing with others.
Consumer adoption of location-
based service applications is growing
exponentially year over year.
Research firm SNL Kagan estimated
that the number of U.S. consumers
registered with some kind of location-
based service social networking
application jumped from 12.3 million in
2009 to 33.2 million in 2010.2
Though current concerns about
privacy issues involving smartphones
and location tracking systems/
services embedded within their
software have been a subject of public
debate, explanations by smartphone
Consumers who subscribe to one or more location-based services use an app on their
mobile phone to “check-in” at locations around the globe.
manufacturers about the use of such
technologies by government mandate
since 2000 and assurances that such
information will be better encrypted in
the future are not expected to hinder
growth in this sector. This, plus equally
exponential increases in numbers of
smartphone users per year, greater
value/usability offered by emerging
location-based services applications,
and more accessible pricing for mobile
data plans all indicate that consumer
adoption of location-based services
applications will continue to surge.3
This convergence of communication
and expected growth opens the door
to limitless possibilities for marketing
and direct-to-consumer engagement
between brands and their target
consumer, especially brands that
rely on BAM locations as a core part
of their business model. A targeted
location-based services strategy to
connect the Borders bookstore brand
to consumers in the immediate area
surrounding each of its BAM locations,
and creating an opportunity to amplify
those connections through users’
social networks, may well have been
just what the company needed to boost
traffic to its stores.

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COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
Take, for example, Samsung Mobile’s*
“Explore with Nexus S 4G” campaign,
a mobile treasure hunt that was
held in Kansas City, Mo. on June
4, 2011, and executed by Samsung
Mobile’s ad agency, One Agency.
For this program, Samsung Mobile
partnered with SCVNGR, a location-
based service that takes the check-in
a step further by offering challenges
that consumers can perform at their
destination in exchange for points
used toward earning rewards (a free
item, a percentage off of a check, etc.).
The SCVNGR revenue model is based
around brands creating “challenges”
for consumers to be completed at
geographic settings in order to make
advertising experiential.4
In the case
of Samsung Mobile, teams of two
used Nexus S 4G phones (provided
by Samsung Mobile) to check in
through SCVNGR and find out where
to complete challenges throughout
downtown Kansas City. By doing this,
they racked up points, competed to
win prizes – including a grand prize of
$20,000 cash – and got to try out all of
the premium features that the Nexus S
4G offers.5
This program not only used location-
based service technology to place
Samsung Mobile products into the hands
of target consumers, it also offered the
media a huge opportunity to cover the
event and jump-started word-of-mouth
discussion around the Nexus S 4G brand
that was amplified through SCVNGR’s
social networking applications.
In addition to rewarding behaviors
favorable to supporting business,
location-based services provide brands
another medium through which to
communicate relevant content to
target audiences.
* MWW Group client
OPPORTUNITIESTOENGAGE
More and more brands are using location-based services apps to motivate consumers to
visit BAM locations, check-in, and earn incentives – essentially digitizing the loyalty card
and expanding the reach of word-of-mouth promotion.

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COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
OPPORTUNITIESTOENGAGE
Because consumers turn to
location-based services for tips and
recommendations about what to do,
eat, try, explore, ask, watch out for, etc.,
brands can own the conversation in
this space and become a valued source
for trusted information.
For example, if you check in through
Gowalla at a restaurant, Zagat might
offer recommendations for wines
or dishes to try, tips for where to go
for a nightcap, what other sources
of entertainment are in the area, or
other information that is meaningful to
consumers. It’s this type of engagement
that Loopt co-founder and CEO Sam
Altman says is part of Loopt’s business
strategy moving forward: “Local mobile
search is often less about discovering
a new place or location to visit and
instead is more about “what you do
when you get there.”6
The key to successful social media marketing is providing meaningful content to
consumers so that they build affinity for your brand and find value in interacting with it.

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COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
Even brands that don’t necessarily
offer BAM locations for consumers
to purchase their products can use
location-based services applications
in their marketing strategy. During
the 2011 South by Southwest (SXSW)
interactive film and music festival in
Austin, TX, Nikon* used a location-
based service strategy to create an
opportunity to make itself relevant to
audiences important to its
business growth.
Nikon’s PR and Social Media agency
partners developed a virtual treasure
hunt featuring actor and Nikon
spokesman Ashton Kutcher, as an
integral part of its overall strategy
at the event. “The Chase” placed
consumers in Austin in direct contact
with Kutcher, who provided visual and
text clues as to his location through
connected Twitter, Foursquare,
Facebook, and Vimeo channels.
Based on the clues, participants had to
figure out where he was, go there, and
check in for a chance to win various
prizes, including free cameras and
passes to an exclusive Nikon/Vimeo
party. Kutcher and a team of Nikon
product experts were on the branded
Nikon Bus Experience at the final
location. Participants there were able
to meet Kutcher, explore the latest
Nikon products, and get tips from
the pros.
Social media engagement with festival
participants and those who were not
in attendance was tremendous. The
activation generated more than 77
million Facebook and 58 million
Twitter impressions.
These types of strategies open up
opportunities for forging new business
partnerships and instituting more
tangible reward programs in industries
in which these types of strategies could
not be implemented through traditional
means. Additionally, the digital nature
of location-based services applications
allow for more accurate measures of
program effectiveness and new ways
to gauge consumer engagement.
Most location-based services offer
some kind of analytics program that
enable brands to track the interactions
consumers are having with their
location-based services campaigns,
how often, when, where, and even what
is being said.
BEYONDBAM
* MWW Group client

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COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
Location-based service-focused
engagement should be a part of just
about any social media marketing
strategy. But before you move
ahead with designing a program
for your brand, make sure that this
type of medium is relevant to the
audiences you’re trying to reach. Are
they smartphone users? Are they
technology savvy? Are they familiar
with or interested in location-based
services applications? Have they
adopted location-based services? If so,
what do they use?
Another consideration is the type of
content that your brand can provide.
According to JiWire’s Mobile Audience
Insights Report, Q4 2010, the top
four types of information on-the-go
consumers are interested in receiving
through an location-based services
are store locations, points of interest,
checking in, and sales/promotions/
coupons.7
Does offering this type of
content make sense for your business?
Are there alternative ways of engaging
your audiences using this medium.
Once you decide that integrating
location-based services strategies in to
your existing social media marketing
plan is right for your brand, get creative
in developing approaches to generating
meaningful and consistent interactions
with your audiences. Start simple,
closely monitor and evaluate the
engagement that results, and build from
there. Some simple suggestions include:
THE TOP FOUR TYPES OF INFORMATION ON-THE-GO
CONSUMERS ARE INTERESTED IN RECEIVING THROUGH A
LOCATION-BASED SERVICES:
RECOMMENDATIONS
STORE LOCATIONS
42%
CHECKING IN
27%
POINT OF INTEREST
42%
SALES/PROMOTIONS/COUPONS
26%
JiWire’s Mobile Audience Insights Report, Q4 2010

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COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
DESIGNING INCENTIVE PROGRAMS
THAT WILL ENCOURAGE TRAFFIC TO
BAM LOCATIONS:
This is an easy and often cost-
effective strategy for BAM brands.
Most location-based services provide
applications for creating badges
and instructions for placing content
on a location’s site, while there are
specialized firms that can design
customized mobile loyalty cards that
fit your brand’s needs. Rewarding
behavior that drives your business –
such as extra perks for frequent visits
to a location – is the key to success
with this strategy.
BECOME THE VOICE OF A
COMMUNITY OR AREA:
Provide timely and accurate
information that will help consumers
decide what to do once they get to
their location. Look for opportunities to
leave tips and comments at established
locations that provide value to the
consumer and build an affinity with
your brand. At SXSW, Nikon provided
photography tips for many popular
tourist locations in Austin. When a
consumer checked in, he or she was
able to access tips were designed to
offer practical advice that an amateur
photographer could use on-the-spot.
EXPLORE PARTNERSHIP POTENTIAL:
If you don’t have a BAM location, see
if there are any other brands that you
could partner with for an incentive
program. This can result in increased
sales, affinity, and engagement for both
of your businesses.
RECOMMENDATIONS

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COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
If used strategically, yes. They are
powerful tools for helping to balance
the revenue scales in favor of retailers.
And given that location-based services
technology is only just emerging as a
consumer tool, continuing innovation
and development make the possibilities
for commercial adaptation limitless. On
July 12, 2011, Foursquare announced
distribution partnerships with daily deal
providers LivingSocial, Gilt City, zozi,
BuyWithMe and AT&T, helping all of the
players to work together.8
Foursquare
also recently announced a national
deal with American Express to offer
discounts to cardholders when they
check in on their cell phone at certain
shops or restaurants, helping to make
location-based services even more
mainstream.9
We fully expect to see dramatic changes
in how location-based services are used
by both consumers and businesses in
the coming years.
For example, manual check-ins will
become a thing of the past since the
process serves as an interruption
to daily life. The next generation of
location-based services technology
will likely offer consumers the option
to automate their check-ins (with
their permission, of course) based
on their location and preferences.
Soon, smartphones may also be able
to generate alerts about deals and
specials in an area without the user
having to check-in at all. The GPS would
automatically trigger the alert.
In addition, location-based services will
most likely completely replace customer
loyalty cards. We may also see greater
integration with credit cards via services
such as Square, which enables you to
swipe credit cards and process payments
right through your iPhone, iPad, or Android
system. That swipe of your credit card could
serve as your check-in at that location
should such a partnership take shape.
Location-based service interaction may
become increasingly important to the
smaller BAM business as the possibilities
for real-time interaction become more
tangible. Say you use a location-based
service to check-in at a local bistro you
eat at regularly, the owner or manager
could receive notification that a frequent
customer has arrived. This opens up
opportunities for direct interaction, such
as a tableside visit from the chef or a
complimentary glass of wine.
The possibilities for increasing
customer service are endless.
Consumer adoption of location-
based services will also rise as more
relevant applications are integrated
into the devices that people rely upon
daily. Apple’s announcement of the
free “Reminders” native app for iOS
5, which spans the iPhone, iPad, and
iPod touch, has already started to
change the game. What is essentially
a simple to-do list/calendar type of
application provides consumers with
added functionality by delivering pre-
programed reminders to users when
they reach a certain location. For
example, if you know you always forget
to pick up batteries at the grocery
store, you can program a reminder that
you need batteries into your iPhone
that will pop up whenever you get to
the store.
All in all, the future for location-based
services and the BAM business is
very bright and will likely become
increasingly useful and valuable for
consumers in all categories of industry.
FINALTHOUGHTS
Could location-based services aid BAM business in a time where e-commerce and an
ailing economy have taken the reigns?

11. © MWW GROUP, ALL RIGHTS RESERVED 11
COULD LBS BRING TRADITIONAL RETAILERS BACK TO LIFE?
SOURCES
1. “Walmart, Big-Box Retailers Struggle To Get Shoppers Into Stores As Sales Drop,” The Huffington Post
http://www.huffingtonpost.com/2011/05/17/walmarts-us-sales-international-decline_n_862934.html
2. “33.2 Million Location Based Services Users?,” Mobile Marketing and Technology
http://www.mobilemarketingandtechnology.com/2010/toppost/33-2-million-location-based-services-users/
3. “Location-Based Services Poised for Rapid Growth - Part 1,” Chain Link Research
http://www.clresearch.com/research/detail.cfm?guid=273A9E17-3048-79ED-9942-D6E4D8A860FC
4. How SCVNGR And Founder Seth Priebatsch Hope To Win The Location Game,” FastCompany, June 13, 2011
http://www.fastcompany.com/1766648/colocation-with-howard-lindzon-scvngr-in-cambridge-ma
5. “Samsung Mobile and SCVNGR hosting city wide mobile treasure hunt,” AndroidCentral
http://www.androidcentral.com/samsung-mobile-and-scvngr-hosting-city-wide-mobile-treasure-hunt
6. “Loopt Adds Fresh Twist on QA to Improve Local Reviews,” Blue Cake Interactive Media Consulting
http://bluecakeinteractive.com/2011/04/20/loopt-adds-fresh-twist-on-qa-to-improve-local-reviews/
7. Insights, JiWire’s Mobile Audience Insights Report, Q4 2010
http://www.jiwire.com/downloads/pdf/JiWire_MobileAudienceInsightsReport_Q42010.pdf
8. Expanding the foursquare Specials platform to more partners
http://blog.foursquare.com/2011/07/12/expanding-the-foursquare-specials-platform-to-more-partners/
9. A Start-Up Matures, Working With AmEx
http://www.nytimes.com/2011/06/23/technology/23locate.html?_r=1

12. FOR MORE INFORMATION, PLEASE CONTACT:
Molly Mulloy
Executive Vice President, General Manager, San Francisco
415.464.6423 | mmulloy@mww.com
MWW
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