How Geofencing Works
Geofencing creates virtual perimeters around physical locations and monitors when devices cross those boundaries:
- Define the geofence. Set geographic boundaries around target locations—stores, parking lots, competitor locations, or broader areas like neighborhoods.
- User grants location permission. The mobile app requests and receives permission to access device location services.
- Monitor device location. The app or operating system continuously monitors device position relative to defined geofences.
- Trigger on boundary cross. When the device enters (or exits) a geofence, the system triggers predefined actions.
- Execute action. Send push notification, activate an offer, log the visit for attribution, or enable in-store features.
GPS Geofencing
Uses satellite positioning. Works outdoors with 3-5 meter accuracy. Most common for store-level targeting. Battery-intensive if monitoring frequently.
WiFi Positioning
Uses WiFi signal triangulation. Works indoors. Can identify store entry even in malls or shopping centers where GPS struggles.
Bluetooth Beacons
Physical devices placed in-store that communicate with nearby phones. Precise indoor positioning—detect specific aisles or departments. Requires beacon infrastructure.
Cellular Network
Uses cell tower proximity. Less accurate (100m+ range) but works without GPS. Useful for broader geographic targeting or as fallback.
Loyalty Geofencing Use Cases
Welcome Notifications
Greet members when they arrive at a store with personalized messages and available offers.
"Welcome to Main Street! Don't forget—you have 3 digital coupons loaded. Tap to view."
Offer Reminders
Remind members of loaded offers or expiring rewards when near a store where they can be redeemed.
"Your bonus points offer expires tomorrow—and you're near our Oak Park store right now!"
Competitor Conquest
Geofence competitor locations to deliver compelling offers when customers are considering alternatives.
"Earn double points when you shop with us today. Your nearest store is 0.5 miles away."
Store Visit Attribution
Track whether marketing campaigns drive actual store visits by monitoring member presence at locations.
Campaign analysis: "Members who received the email promotion had 23% higher store visit rate."
In-Store Experience Activation
Enable app features when in-store: store mode, scan-and-go, in-store navigation, or associate identification.
App automatically switches to "store mode" with larger barcode display and in-aisle offers.
Dwell Time Triggers
Advanced geofencing considers dwell time—how long a device stays in an area. A member who lingers for 20 minutes is likely shopping; one who passes by in 30 seconds isn't. Trigger notifications based on dwell, not just entry.
Geofencing Best Practices
- 1. Size fences appropriately. Too small (just the store) may miss customers in the parking lot. Too large triggers false positives. Test and optimize fence radius based on actual behavior.
- 2. Limit notification frequency. Don't message every time someone enters a geofence—especially for frequent visitors. Set cooldown periods (e.g., once per day per location) to avoid annoyance.
- 3. Combine with context. Location alone isn't enough. Combine with time of day, day of week, and individual preferences. A morning coffee offer is relevant at 7am, not 9pm.
- 4. Respect privacy conspicuously. Be transparent about location tracking. Provide clear value ("We'll notify you of nearby offers"). Make it easy to adjust preferences or opt out.
- 5. Consider battery impact. Continuous GPS monitoring drains batteries. Use efficient monitoring techniques and consider using significant location change APIs rather than constant tracking.
- 6. Measure incrementality. Track whether geofencing drives additional visits or just notifies people already planning to shop. True success is incremental foot traffic.
Exchange Solutions Location-Based Engagement
Exchange Solutions' platform supports geofencing and location-based engagement, enabling personalized messaging when members are near or in stores. Our system combines location signals with member profiles to deliver relevant, timely notifications that drive visits without overwhelming users.
