Opportunities for Location Based Marketing in Dubai

During a casual visit to The Dubai Mall, I picked up their free wifi and started browsing around. It seems that it is the first mall in the UAE to offer free wifi throughout its premises. Just to give you an idea about the size of the mall, it's 12 million sq. ft or roughly equivalent to the size of 50 soccer pitches and houses 1,200 retail stores. As I wanted to know if any stores offered check-in discounts, I logged in on foursquare to see if any merchants were taking advantage of Location Based Services (LBS) such as foursquare to lure customers. It turns out that only 7 stores out of 1,200 in the mall had any such specials.

What is foursquare?

As per Wiki, foursquare is a location based social networking website for mobile devices, such as smarphones. Users "check-in" at venues using their mobile devices by selecting from a list of venues the application locates nearby. Location is based on GPS hardare in the mobile device or network location provided by the application. Each check-in awards the user points and sometimes "badges".

foursquare has

15 million members and recorded 1.5 billion worldwide check-ins

and over 500,000 merchants taking advantage of hosting foursquare venues and offering specials.

Business potential?

After noticing just 7 foursquare specials (0.6% of all stores in the mall), I decided to dig in for more data on foursquare and Dubai to see if there could be a fit.

Dubai has a strong retail market that is roughly valued at $7.5 billion in spending. Also, it has been widely established that the city loves malls (Having 70+ malls in the same city makes it fiercely competitive...). The Dubai Mall is the biggest mall in the world with 54 million visitors last year (148,000 visitors everyday) with

roughly 50% of them having a purchase intent.

While LBS are yet to catch up here, it is not completely unheard of. The Dubai Mall has already recorded 3,200 check-ins on foursquare. After expanding my radius to 20km, I found

only 31 check-in specials

in and around Dubai, which sounds very low.

What about smartphone penetration rate in the country?

UAE has one of the highest penetration rate for mobile phones in the world. With 11 million mobile phone subscriptions in the country, it computes to a

200% penetration rate

for a population of roughly 5.5 million. Within smartphones, the country averages a penetration rate of 43%, which is expected to reach 70% in a few years.

Why would anyone want to publicly disclose their location by checking-in?

As per the Location Based Marketing, the top 3 reasons for checking-in are:

1. To get a deal/discount

2. To share location with friend

3. To unlock 

badges

through 

gamification

Who doesn't love discounts? Landing deals has become even cooler with group buying sites bringing combined savings in millions. As for sharing location with friends, it captures on a desire that people have to communicate and in foursquare's case, to let people know about their lifestyle by checking-ing to cool places. Through gamification ideas, foursquare rewards members by letting them

earn badges

by going around check-in and unlocking badges in return. Examples of such could be the 'Adventurer' badge – on completing 10 check-ins at different venues or 'Superstar' badge – on completing check-ins at 50 different venues

WIIFY: How can marketers gain?

1. By slicing n' dicing sales data, merchants can determine the slowest days (or even hours) for business and accordingly set up specials that help attract customers move inventory. With several

types of specials available on foursquare

, merchants can take advantage of these

 to help themselves. With a detailed dashboard available for FREE, merchants can understand about customers

through analytics

to know what specials work (or not) through number of impressions, check-ins by the hour, top customers (in terms of check-in) and several others metrics.

2. 

What's also cool about foursquare is that on checking-in, people can decide to share the check-in with their network on foursquare, Facebook and Twitter. With the average Facebook user having 130 friends and average Twitter user having 126 followers, merchants stand to gain from getting free impressions with the possibility of converting those impressions into actual customers.

3. Since LBS has a low adoption rate here, marketers can look to traditional touch points to inform customers about such specials (Example, Stickers on the main door, at the cashier, on the menu). At The Dubai Mall, I visited 2 specials providers to see if they had integrated foursquare specials at the with their in-store marketing but that wasn't the case.

Never underestimate the power of traditional marketing...

4. Merchants can also learn about their offering through the 'Tips' feature. People checking-in at the location could leave tips about hot products, customer service levels etc.

It's safe to say that Dubai based merchants will take some time to fully adopt

SoLoMo

(Social, Local and Mobile) marketing tools. However, the early adopters do stand to gain from this opportunity.