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The Latest Sales Weapon For Best Buy, Macy's, And Walmart: Coupons Sent To Nearby Smartphones

The Big Boxers recently signed on to test a new geotargeted coupon product that zaps deals to shoppers' smartphones when they are near a store.

The next time you're in a shopping center near a Best Buy store, don't be surprised if your smartphone suddenly receives a coupon for the electronic giant. Spotzot, a mobile marketing firm, recently debuted their new SpotAds product—geographically targeted store advertisements, merchandise offers, and e-coupons individually tailored to shopping habits. The API-based product uses a mix of pre-existing cookies, social graph integration, and location-based technology to determine advertisements sent to users.

SpotAd's initial retail and brand partners include Best Buy and Microsoft. Pilot testers for the product included Walmart, Macy's, and Best Buy. Bobby Jadhav, Spotzot's CEO, tells Fast Company that the difficulty of getting in-store promotion information to customers spurred the creation of SpotAds. Using pre-existing mobile web technology, Spotzot is able to push information about in-store promotions to potential customers. Spotzot will also send users time-sensitive advertisements using the service.

Retailers are being offered both exclusive and non-exclusive advertising space through the service. Both retailer-exclusive and multi-retailer advertisements, however, are geo-targeted. For Spotzot, the key is to attract a shopper's attention when they are as close to the store as possible. Online-only retailers, however, are also included in the service thanks to the graphing of end users' individual shopping activities. While similar services (and, well, plenty of them) exist for the conventional web, this is one of the most ambitious efforts yet to bring targeted shopping offers to mobile platforms.

According to Spotzot, the new SpotAds product generates promotional and advertising offers for users based on each shopper's individual activity. These ads, which show up in mobile browsers, include instant coupons, nearby store information, links to other e-commerce sites, and price comparisons with other retailers.

At the same time, SpotAds is part of the burgeoning lead generation industry that unintentionally creates privileged classes of customers. By microtargeting individual shoppers based on their browsing and purchasing habits, certain demographics of customers will receive discounts that others won't. While there is nothing new about retailers chasing after certain kinds of customers, the rise of web- and mobile web-based shopping mean that the process—and the ability to figure out who's purchasing what—have only become accelerated.

For now, Spotzot is distributing information on promotional merchandise, offers, and stock at 500,000 individual retail stores from "the top 1000 American retail chains" via the SpotAds platform. The company claims to have a reach of 100 million mobile shoppers. For Spotzot and their competitors, the major challenge is that mobile augmented-reality shopping is still a year or two away from maturity. While many customers might be glued to their iPhones and Droids while inside stores, they're more likely to be checking text messages or Facebook than using their mobile browsers or advertising-integrated apps.

For more stories like this, follow @fastcompany on Twitter. Find Neal Ungerleider, the author of this article, on Twitter and Google+.

[Image: Flickr user Walmart]

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  • Don Peppers

    Consumer permission is required before personal data is available, but even with consumer permission, this technology is not as useful for brick-and-mortar retailers as it might seem.  No reason Amazon or Newegg can't put their own "proximity ads" onto consumer phones when these consumers are near retailer locations.  The only real defense for these retailers is to earn the trust (and good will) of their customers, by always acting in their interest, no matter what.  You want customers to WANT you to succeed as a business, in other words, because they feel it is in their own interest that you do.  See my Fast Company article on this topic here:

  • Michael Jordan

    Love to know how its legal to sniff out a nearby smartphone and browse its behavioral usage then create an ad/coupon based on my behaviors that I never authorized it to do and use my data to send me coupons at my expense