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FEATURE

SoLoMo - Why It Matters and What You Should Know

Ingenious apps, advanced social media and more powerful mobile devices are poised to transform every aspect of commerce in our daily lives—how we shop, how merchants sell and how advertisers market goods.

Kerry Doyle
August 19 , 2012

SoLoMo is steadily gaining momentum. This intersection of social media, local merchants using location-aware technology for advertising and mobile device usage (SoLoMo) offers opportunities to retailers, marketers and consumers—and all have something to gain from this new trend.

According to market research firm, Nielsen, over half of the U.S. population (50.4 percent) currently owns a smart device. In addition, well over half the population (70 percent) use social media regularly. Add to these items the fact that all mobile devices incorporate some aspect of geo-location, and all signs indicate that SoLoMo expansion is primed to take off.

Originating in the Hyperlocal movement that came into vogue a few years ago, SoLoMo has had to wait for the right technology to evolve and for mobile usage to reach critical mass. Increasingly, venues such as suburban malls, airports, city centers and other urban shopping areas—essentially, wherever a mobile consumer goes—will be hotwired with retail incentives and deals that compel shoppers to do what they do best: consume.

It's not surprising that the mobile sector is expanding by leaps and bounds. Innovations such as 4G (ultra-broadband Internet access), retail-/user-based applications, mobile payments, increased security and mobile devices that function more like powerful desktops will change—are already changing—how we live in a consumer world.

With SoLoMo, retail deals, coupons and consumer events as well as shopping and dining opportunities are broadcast to a mobile user from a specific retailer based on that user's geographic proximity, brand/retailer allegiance and shopping/check-in history. The possibilities are vast. They range from coupons for a soft drink at a nearby Walgreen's and building supplies at Home Depot to a clothing sale alert at C Wonder or 48-hour flash sales at Rue La La.

It's gradually becoming apparent that having a smartphone tethered to one's body is driving incremental sales and creating engagement, between opinionated shoppers themselves and retailers. A number of new user applications aim to take advantage of the opportunities.

For example, the ShopKick application grants user points, rewards and offers to drive foot traffic into select stores. Banjo, Kibits and Kismet are apps that incorporate geographic targeting to connect users; Kibits in particular to form groups, and Kismet to connect users through events and invitations.

Wallit takes social interaction one step further by providing a virtual wall for time- and location-sensitive reviews. The application, Highlight, serves all groups—users, retailers and marketers—by helping one learn more about people in the vicinity. Finally, Sonar sorts and prioritizes publicly available personal data for making social connections.

Of course, the most glaring concern with SoLoMo revolves around issues of privacy. Currently, the U.S. Congress is considering twenty-six different bills that address wireless privacy issues, and state-level restrictions on how user data can be exploited are being considered as well.

 In addition, the apprehension that consumers have regarding the security of their 16-digit card number and mobile payments is being addressed—by governmental oversight committees, federal agencies and the big-name players. Eventually, once regulations are in place, retailers and banks will be required to meet compliancy standards. While the key barrier to mobile payments is security, expectations are high that the banking, retail and governmental concerns—and consumers' needs—will be met by the evolving technology.

To that end, encryption and user-based restrictions represent necessary forms of management, in addition to the controls offered by individual applications. Striking the right balance between easy access, location awareness and online transactions with robust security represents the golden ring security experts and app developers are reaching for. Achieving that balance can lead to the success, or failure, of many of these SoLoMo-based initiatives.

Another concern is adequate editorial control over user-based reviews and preferences. How much data have you slogged through trying to find the best information on a product or merchant? Often, the amount of details users must comb through to find relevant information on a store, product or restaurant can be staggering.

If SoLoMo is about providing information on demand, wherever a shopper might be, then retailers have a multi-pronged tool for gaining more customers at little cost. Currently, most retail-based services offer free platforms for attracting those users. For example, foursquare, the daddy of all SoLoMo services, offers an easy and powerful way to extend a merchant's marketing effort, and it attracts large amounts of shoppers due to the high number of well-known companies offering exclusive deals.

For consumers, mobile commerce can be viewed either as a ball and chain or a shopper's paradise. Again, those privacy concerns about having your location pinpointed and broadcast disturbs some smartphone adherents.  On the other hand, SoLoMo offers versatile applications, money saving deals, accessibility and a spectrum of benefits including highly targeted, context-rich communications, all under the user's control.

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The contents or opinions in this feature are independent and do not necessarily represent the views of Cisco. They are offered in an effort to encourage continuing conversations on a broad range of innovative technology subjects. We welcome your comments and engagement.

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