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Starbucks, L'Oreal Will Test Geo-Fencing for Six Months

  |  October 14, 2010   |  Comments

In a U.K.-based test, the coffee retailer is offering discounts while the beauty brand has set up a buy-one-get-one-free coupon pitch.

A mobile marketing mantra-turned-industry-joke ("Someday you'll walk by a Starbucks and automatically receive a coffee coupon,") may be becoming true in the United Kingdom. That is, unless sidewalk shoppers get a shampoo offer first.

Starbucks and L'Oreal will be testing geo-fencing in the U.K. for the next six months, the two brands announced this evening with Placecast and mobile telecommunications company O2; Placecast provides a technology called "Shop Alerts." Geo-fencing allows stores and brands to offer an opt-in "auto check-in" service to their patrons, no matter if they use a smart phone or regular cellular device. Such users opt in for what amounts to automatic geo-social check-ins and check-outs when they arrive or leave a location measuring 1.5 miles in radius.

For Starbucks, they will receive an SMS discount for the coffee retailer's "VIA Ready Brew" product line. L'Oreal's opt-ins will get a buy-one-get-one-free SMS coupon for hair care products at a nearby location of the retail chain Superdrug. The number of physical stores participating in the campaigns was not mentioned in the companies' prepared release.

O2 brings a scale of 22 million wireless subscribers to the effort. The London-based telecommunications firm's customers who are 16 and older can register online for the mobile couponing service by submitting their age, gender, and interests such as sports, travel, and movies.

The development comes on the heels of The North Face testing geo-fencing in each of its 31 locations. While quick-serve brand Sonic and retailers American Eagle and REI have trialed the concept in single markets, The North Face is one of the first U.S. brands to take the idea to national scale.

Part of the reason that the geo-fencing concept has become a bit of a punchline to industry watchers is that - before very recently - brands have been slow to jump on board. But Alistair Goodman, CEO of the San Francisco-based Placecast, sounded optimistic about that mobile marketing niche in a recent interview with ClickZ.

"Geo-fencing locations offer brand marketers the opportunity to reach consumers when they’re in the right mindset for making a purchase or interacting with the brand," Goodman said. "In other words, the days, hours, and times in which consumers are in a mindset to interact or shop."

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ABOUT THE AUTHOR

Christopher Heine

Christopher Heine was a senior writer for ClickZ through June 2012. He covered social media, sports/entertainment marketing, retail, and more. Heine's work has also appeared via Mashable, Brandweek, DM News, MarketingSherpa, and other tech- and ad-centric publications. USA Today, Bloomberg Radio, and The Los Angeles Times have cited him as an expert journalist.

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