Proximity based Retail Marketing and Promotions | AdTech Startup Ideas


This 1001 startup idea from YoStartups is to offer Proximity based Retail Marketing and Promotions  to optimize offline retail shopping experience through IOT devices for personalized advertisements and marketing targeted at individual customers.


Market Definition for Proximity based Retail Marketing and Promotions

As per 2017 WEF report, despite the growth in e-commerce, physical stores will continue to drive the majority of revenues for multi or omnichannel retailers. However, to stay relevant, they will need to start evolving from a mere distribution channel to a new-age shopping experience zone with the help of technology.

IoTs will play a significant role in the transformation of the retail segment. McKinsey estimates the use of IoT alone could have an impact of $410 billion – $1.2 trillion per year by 2025. One of the areas where IoTs could drive up sales would be by providing real-time in-store promotions. Mckinsey estimates that real-time personalized promotions can increase productivity in retail environments by 3 to 5 percent, leading to a potential economic benefit of $89 billion to $348 billion a year.


Competitor Analysis for Proximity based Retail Marketing and Promotions

Onyx beacon

Onyx beacon provides integrated solutions using IoT sensors based on Bluetooth Beacon technology which works both on Apple’s iBeacon technology and Google’s Eddystone protocols. It uses BLE (Bluetooth Low Energy) to engage in-store customers by sending coupons, promotions, in-store navigation maps directly to their handheld devices.


Estimote makes small, wireless sensors that use Bluetooth low energy (BLE) to interact with nearby smartphones and communicate with them via APIs. They have also designed an SDK using which the developers can access a centralized dashboard, and the analytics generated by the sensors can be used further for proximity marketing, in-store navigation, and contactless payments.


Pain Point and Target Audience for Proximity based Retail Marketing and Promotions

As the business of retail has evolved, running an offline store efficiently without denting the margins has become a challenge. The retail chains would be the target customers to leverage the technology to enhance the in-store shopping experience.


Pain Point for Retailers

As per a report published by BRP consulting, 70 % of the retailers in the survey wanted to personalize the shopping experience of customers on priority. Most of them want to do this by enhancing the shopping experience via mobile apps, responsive websites that can engage the customer in the store.


Pain Point for Consumers

As per a study by Accenture, 39% of the consumers wanted instore promotions, and 45% percent of them desired real-time mobile promotions while they were in a store to enhance and enrich their shopping experience and enable them to make instant purchase decisions.

Multichannel retailers and supermarket chains have already started using proximity marketing to enhance engagement with customers while they are in a store. Carrefour used mobile devices and tablets attached to the shopping carts to guide consumers around the store, push personalized promotions and used the data generated from customer behavior and purchase patterns to optimize the store layouts. Carrefour saw a 400% percent digital engagement and 600% growth in the number of its app users.


Value proposition for Proximity based Retail Marketing and Promotions

Retailers can use the data generated by the sensors and mobile interaction to create customer profiles. This data can be used to run real-time in-store promotions and advertisements to drive up the average revenues generated per customer. The data can also be used to optimize store layouts and to clear out old inventory by offering real-time discounts as per customer profile. Sports Arenas, Theaters can provide premium seating at a lower price at the last minute to customers in their vicinity. Real-time personalized marketing can also be used for cross-selling among partners for upgrades and loyalty programs.

Customers are happy and engaged, as the promotions, advertising delivered to them is more customized and relevant according to their buying preferences.


Business Model for Proximity based Retail Marketing and Promotions

The startup should charge one-time installation and set-up fees for a store. The services will be on a monthly subscription-based model to manage content, coupons and other marketing activities.


Way to Market for Proximity based Retail Marketing and Promotions

The proposed startup will have to build a cloud-based platform and SDK compatible with iBeacon, Eddystone Protocol, etc. This technology can be integrated with any of the off-the-shelf sensors from online sites like

The startup will have to tie up with one of the multichannel retailers for a use case and run a pilot of its software. Once the sensors are configured based on the initial feedback from customer-generated data like customer behavior, purchasing patterns to push real-time promotion notifications to customers connected to the in-store network (BLE or WiFi), the start-up will have to ensure that it can build APIs which can transmit information from CRM to CMS on the cloud.

Once the necessary promotions and push notifications are integrated, the startup can develop content regarding the product, in-store navigation, product reviews, product videos, etc. for a multi-store retail chain for full deployment.


Milestones for Proximity based Retail Marketing and Promotions

The building of online platform and SDK should be completed within the first quarter. The Pilot project with the multichannel retailer to collect data and refine the platform will have to be completed within the first six months. The third and fourth quarter will have to be spent on integrating content for in-store consumer activities, and building APIs which can combine with existing POS and CRM systems that retailers use.


Investment Needed for Prototype for Proximity based Retail Marketing and Promotions

The proposed startup can raise up to 100k from accelerators like TechStars retail accelerator (Metro and Target) or Revtech. All the funds raised should be used to develop cloud-based CMS, SDK for hardware compatibility. No funds should be apportioned toward salary or office rent.


Team Capability for Proximity based Retail Marketing and Promotions

The team must consist of a mobile app developer with experience in both AndroidSDK, Android Studio and ibeacon. The team will also need a hardware specialist who has experience with IoTs, Sensors and Radio technologies (BLe, WiFI) and expertise to write hardware programs such as C or Python. Another preferred member would be experienced professional from retail and marketing. The developers can also use OWASP standards to ensure their applications are updated to the latest security standards.


Investors/Expert Take for Proximity based Retail Marketing and Promotions

Proximity-based real-time promotions can be useful for any business that wants to deliver content directly to the end-users of their services and keep them actively engaged. Restaurants can provide special menus or promotions based on the customer’s preferences; theatre owners can sell premium tickets to a select customer at a discount to clear out inventory at the last minute. Real estate agencies, hotels, and resorts can use sensors to deliver VR tours of their properties.

Proximity-based marketing services can free up the workforce, boost productivity, enhance customer experiences and drive sales generating higher ROI on advertising budgets.

The reducing cost of the sensors and cloud-based offerings are lowering entry barriers to make way for faster adoption among smaller players.


Tarun Kumar

YoStartups is a Pre Accelerator and it empowers entrepreneurs to propel their business ideas into successful ventures. Yostartups’ core mission is to take the message of entrepreneurship to 1 billion people globally by 2020, as on date Yostartups reaches out to over 100 million people globally through its direct and indirect channels.


*Any information given in the article does not constitute any warranty of marketability or fitness for a particular business idea for any market or industry segment. It is the readers’ sole responsibility to further research and assess the market opportunity.
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