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Geolocation Enhances E-Retail

Mar 1, 2010

While the benefits to consumers of shopping online are obvious, there is also a benefit to be gained by linking those customers to the real world. Being online may resemble a "virtual experience," but the physical world is still very real, and companies stand to gain by remaining mindful of this fact. Case in point: The rising importance of geolocation.

For a supplier, understanding the physical location of the customer is fundamental to efficient and successful ecommerce. For example, if thousands of customers choose to order handbags from a given supplier, this is only beneficial to that supplier if the items can be efficiently delivered from a central depot to the thousands of different locations. And, it must be cheaper than distributing to multiple stores and selling over the counter. In some cases, it may be worthwhile to establish a link between an online customer and a related physical store, perhaps by informing the customer of local availability for products he or she is trying to order online. This practice allows the supplier to balance the benefits of online efficiency with the need to have products stocked in-store. It can also give suppliers the ability to offer customers in-store pick-up of items ordered online.

Geographic awareness can have a variety of benefits. Landing pages can be customized to suit potential visitors from different regions, as well as seasonal goods, depending on the time of year. However, features like this require a knowledge of where the user is at the moment of arrival on a website, even before they've offered any personal information. This is where geolocation software comes in.

The one bit of information collected from any online visitor is the IP address, which is the conduit through which said visitor is accessing the Internet. All IP addresses are assigned to regional Internet registries (RIRs). These RIRs assign the IP addresses to specific ISPs, large enterprises, government organizations, and so on. Because this information is public, geolocation software can then process it, enhance it with related information (i.e. postal codes) and generate a service whereby website owners can locate the general physical locations of visitors. In the past, companies have purchased and installed geolocation databases on their web servers, but this practice is being supplanted by the use of on-demand services that provide real-time lookup capabilities. With this method, suppliers can send an IP address, and immediately receive a coordinate.

Topic: Business Strategies

Related Articles: geolocation  ecommerce  online shopping  e-retail 

Article ID: 1273

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