Exploring the potential of adopting geofence mobile technology in the South African retail sector

Cheruiyot, Koech; Moenyane, Kalasipa Article Exploring the potential of adopting geofence mobile technology in the South African retail sector Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Cheruiyot, Koech; Moenyane, Kalasipa (2024) : Exploring the potential of adopting geofence mobile technology in the South African retail sector, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-14, https://doi.org/10.1080/23311975.2024.2327126 This Version is available at: https://hdl.handle.net/10419/326143 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 Exploring the potential of adopting geofence mobile technology in the South African retail sector Koech Cheruiyot & Kalasipa Moenyane To cite this article: Koech Cheruiyot & Kalasipa Moenyane (2024) Exploring the potential of adopting geofence mobile technology in the South African retail sector, Cogent Business & Management, 11:1, 2327126, DOI: 10.1080/23311975.2024.2327126 To link to this article: https://doi.org/10.1080/23311975.2024.2327126 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. Published online: 12 Mar 2024. Submit your article to this journal Article views: 1133 View related articles View Crossmark data Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 Marketing | research article Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2327126 Exploring the potential of adopting geofence mobile technology in the South African retail sector koech cheruiyot and kalasipa Moenyane school of Construction economics and Management, university of the Witwatersrand, Johannesburg, south africa ABSTRACT geofence mobile technology can offer significant benefits to all stakeholders in the retail property sector ecosystem. this paper investigated the opportunities and challenges associated with the adoption of geofence mobile technology by retailers in south africa. the paper adopted a qualitative research approach and interviewed property management professionals who have several years of work experiences in the retail sector in the country. as key stakeholders, retail property managers significantly contribute to the retail environment, especially with the integration of technology. Findings revealed that targeted marketing, shopper engagement and increased sales are opportunities presented by geofencing mobile technology to retailers. these opportunities potentially encourage retailers, and by implication property owners and property portfolio managers, to have management buy in and invest in employees’ skills for the adoption of geofence mobile technology. additionally, the presence of vendor support and clear and assured data privacy and regulations are needed for the adoption of geofence mobile technology. these results represent a solid attempt to extend knowledge – in terms of research, policy, and practice – of the impact that new technologies have on the retail sector within a developing country, which is ripe for the adoption of geofence technology across its many economic sectors. Introduction the evolution of tracking technology combined with the rapid growth of smart mobile devices and applications has enabled a wide range of applications and efficiencies for personalising content and services to users in a specific place (Wang & Feeney, 2017). individuals’ physical positions can be determined using geographical location (geolocation) data obtained from their mobile devices. this geolocation data can be of value to various users across various economic sectors in a given economy. geofencing, which is a combination of smartphones, the internet, and geo-positioning technologies, has gained popularity as a means of promoting context-based personalised services and advertisements (Bareth & kupper, 2011). geofencing technology achieves these by establishing a geographic boundary over a physical site using a global positioning system (gPs) or radio frequency identification. With smartphones easily allowing integration with apps, geofencing, and location-aware technologies, digital marketing has been revolutionised significantly in recent years (Usman et al., 2018; singh et al., 2020; al-Qumayri & ahmed, 2021; streed et al., 2017). as this happens, digital marketing, especially mobile marketing in this case, has a significant financial benefit for all stakeholders in the retail property sector ecosystem. (singh et al., 2020). For retailers and marketers, they can communicate with and deliver information to devices inside specific geographic areas once a virtual fence has been established. this valuable information is important to retailers because it provides them with a lot of details about their shoppers, like where they work and live, how frequently they commute, and which restaurants they prefer (Wang et al., 2019). as such, © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group. CONTACT Koech Cheruiyot [email protected] school of Construction economics and Management, university of the Witwatersrand, Johannesburg, south africa https://doi.org/10.1080/23311975.2024.2327126 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY received 2 June 2023 revised 15 February 2024 accepted 1 March 2024 KEYWORDS geofence mobile technology; retail property sector; retailers; shoppers; marketing; south africa REVIEWING EDITOR len tiu Wright, De Montfort University Faculty of Business and law, United kingdom SUBJECTS internet / Digital Marketing / e-Marketing; retail Marketing; retail sector 2 k. cherUiYOt anD k. MOenYane retailers can use geofencing to send notifications to shoppers by text message, email, or social media about specials, deals, or discounts at a particular merchant when the shopper is near the retailer or shopping centre (andrews et al., 2016). in these instances, where shoppers have less time to reflect on their decisions, shoppers are likely to make impulse purchases when notifications occur near the point of sale (albuquerque etal., 2021; tong etal., 2020). additionally, retailers can now follow their shoppers’ point progress and use that information to establish long-term relationships with them, thanks to mobile intermediaries (Bernritter et al., 2021). retail property managers are the decision-makers who can integrate geofencing technology within their properties to enhance marketing strategies, attract more tenants, and ultimately increase foot traffic. this has the potential to influence the valuation of such retail properties. retail property managers can use quantitative value of online sales that are geo-coded and attributed to a shopping centre base as guide in the negotiation for the share of revenue generated by such online sales within a specified geographical radius of the shopping centre between tenants and landlords (Pretorius & cloete, 2020). although not the primary adopters in the technological implementation sense, shoppers play a critical role in the adoption ecosystem. shoppers’ acceptance and response to geofencing initiatives directly influence retailers’ and property managers’ decisions to adopt and invest in geofencing mobile technology. Ultimately this also benefits them. For instance, shoppers will be able to access valuable information on nearby points of interest, such as restaurants, thus experiencing wider choice of merchandise accompanied with price comparability. shoppers may also receive non-monetary incentives, such as free mobile data, with any transaction made during a mobile promotion (andrews et al., 2016). Despite its potential, few african countries, including south africa, kenya, egypt, nigeria, and ghana, currently use geofencing technology in few sectors, such as vehicle tracking, fleet management, security and marketing in some sectors in their economies (cartrack, 2022). the adoption and integration of geofencing within south africa’s retail property sector remain nascent, underscoring a critical gap in both practice and research. existing literature predominantly focuses on the technical aspects and potential applications of geofencing, with studies such as those by cardone et al. (2014) highlighting its utility in enhancing customer engagement through context-aware notifications. however, these discussions often overlook the nuanced challenges and barriers to adoption specific to emerging markets, particularly in contexts like south africa where digital infrastructure and consumer behaviours exhibit unique characteristics (leibbrand, 2017; alFayad, 2018). Moreover, the literature is scant on comprehensive analyses that consider the socio-economic, regulatory, and organizational factors influencing geofencing technology’s adoption in the retail property sector, revealing a significant research gap. in addition, in the retail sector in these countries, however, the adoption of geofence mobile technology remains anecdotal1 – hence the lack of benefits accruing to the various actors in the retail property sector ecosystem as indicated above (Daniel, 2015; leibbrand, 2017; Wang & Feeney, 2017; andrews et al., 2016). this limited literature around the use of geofencing mobile technology in the retail sector in developing countries, despite these countries being ripe for the adoption of geofence technology, is worrying. therefore, the purpose of the current study is to contribute to the body of knowledge of the potential impact of geofence mobile technology on the retail sector by investigating (a) the opportunities associated with and (b) barriers to the adoption of geofence mobile technology in the retail sector in the developing world using south african retail sector as an empirical case study. the remainder of the paper is structured as follows. the second section provides a literature review on the meaning of geofencing technology, factors influencing its adoption, as well as shopper and user perceptions around its use. the third section describes the methods used to conduct the research, while the fourth section presents and discusses the results. lastly, the paper ends with a conclusion. Literature review Understanding geofencing technology geofencing is a method of establishing a geographic boundary over a physical site using a gPs or radio frequency identification. it allows for remote surveillance of real-world geographic areas encircled by a virtual fence, but the user must always be followed in the background even while the mobile device is cOgent BUsiness & ManageMent 3 inactive (Zuva & Zuva, 2019). the technology is being used in vehicle tracking, fleet management, security, and marketing in some business sectors. in the retail sector, Figure 1 illustrates how retailers who have subscribed to geofencing technology can have their promotions or information delivered to shoppers’ mobile devices who are near them as shoppers walk into or drive through the geofence boundary (cardone etal., 2014). this information may be obtained while a shopper goes past a restaurant where the restaurant’s daily specials are provided to shoppers through text messages. similarly, it may involve retailers detecting shoppers near their stores and serving product reviews to those shoppers via their social media channels and other platforms (Dix et al., 2017). Factors influencing the adoption of geofencing mobile technology adoption of any technology is defined by the voluntary decision of individuals or organisations to initially embrace and operationally employ it to address issues. in the literature, several factors shape how geofence technology is adopted and used. these include customers’ perception, issues of privacy and security, regulations and policies, employees’ skills and their social environment, and organisation resources and costs of technologies. Shoppers’ perception shoppers’ perception regarding the product, usage intention, and user satisfaction are usually connected with the adoption of new technology (santa et al., 2019). akman and Mishra (2017) also note that user attitudes are thought to influence the impacts of a service’s perceived qualities, influencing user intentions to consume or reuse the service. if shoppers have a positive attitude toward location-based applications, they are more likely to accept those applications (santa et al., 2019). Users are more likely to trust location-based services (lBs) providers if they believe they will deliver positive results in the future (klumpe et al., 2020). When it comes to the adoption of lBs, trust has a negative impact on perceived risk but a positive one on usage intention (klumpe et al., 2020; Dubé et al., 2017). however, shoppers’ gender and levels of education may have mediating effects on shoppers’ receptiveness to mobile marketing (Wang et al., 2020) and their ultimate intentions to make online purchases (Blut & Wang, 2020; akman & Mishra, 2017; lin et al., 2018). Figure 1. a retail-oriented geofence. source: Chargeitspot (2023). 4 k. cherUiYOt anD k. MOenYane kim (2021) further warns that unless real estate businesses gain a better knowledge of how smart devices can deliver tailored value as this is crucial in the mobile world, their attempt to expand their influence on mobile devices through applications, has a likelihood of swarming shoppers with choice and information overflows. these may aggravate feelings where shoppers are overwhelmed and irritated. therefore, real estate businesses must regard apps as instruments for creating and maintaining shopper engagement through tailored and user-relevant solutions, rather than just extensions of their websites (Murillo-Zegarra et al., 2020). elsewhere, the low screen resolutions offered by smartphones have been observed to lead shoppers to reserve their research on vehicles or life insurance for bigger screen devices, such as computers, and only prefer to utilise smart mobile devices for routine purchases. as a result, mobile devices are unlikely to totally replace conventional sources of information, particularly for complex purchases. however, it has been demonstrated that shoppers who utilise smart mobile devices as an alternative channel of information, in addition to their regular channels, may have a better lifetime value than those who do not (Mclean et al., 2020). Privacy and security Privacy and security concerns such as trust, perceived risk, and perceived usefulness (klumpe etal., 2020) have a bearing on their adoption and use of technology that enable shoppers to make online purchases. in instances, where government surveillance affects shoppers’ privacy concerns, shoppers’ desire to supply personal information to conduct online transactions will be hampered (steinhoff et al., 2019). this has to do with how data is collected, the level of accuracy, how it is accessed and used by third parties (Blut & Wang, 2020; Wang et al., 2020). Zhou (2017) indicates that the proliferation of lBs considerably increases the potential of such misuse. Because geolocation information discloses where a phone is physically located, an unethical mobile network employee could reveal such data to an acquaintance who desires to harm the phone owner (Zhou, 2017). the inherent possibility of a seamless trailing of sites that the user has visited in the past may also work against adoption and use of geofencing technology. in the event seamless trailing of sites happens, attackers may use such data for illegal purposes rather than for commercial activities (steinhoff et al., 2019). to encourage geofencing technology adoption and use, security measures should be versatile, agile, resilient, and capable of detecting a broad range of dangers and making timely judgments. however, Fearnley (2020) warns that implementing these privacy features is quite difficult and frequently conflicts with geofence lBs’s main capabilities. Unless this is done, cyber-attacks result in a loss of reputation, shopper loss, and financial loss for enterprises, as well as a loss of trust, privacy, and financial loss for shoppers (Özoğlu & topal, 2020). Regulations and policies regulations and policies should be suitable for the development of information systems to be entrenched. Volkodavova etal. (2019) argue that obsolete corporate regulations make introducing and implementing new technologies more difficult. sorkun (2020) adds that digitisation process may be slowed by security and regulatory concerns. these rules may include copyright and legal provisions that safeguard new products, trademarks, and corporate logos (iqbal & Yadav, 2020). Employees’ skills and their social environment employees’ skills and their social environments (encompassing employees’ agents and associations, as well as management buy in) have a great bearing on employees’ willingness to adopt innovations (ahluwalia et al., 2017; lee et al., 2019; ghaleb etal., 2021). scholars warn that rapid adoption of innovative technology and quick changes in business environments have a significant impact on employee’’ well-being – this in turn affecting their loyalty, performance, and dedication to the company. in the worst-case scenario, poorly managed introduction of smart technologies at the workplace have led to sabotage by employees (arias-Pérez & Vélez-Jaramillo, 2021). Yoo et al. (2018) suggest that to boost the pace of innovation adoption inside a company, peers should provide support and encouragement to such employees with little digital skill to enable them to cOgent BUsiness & ManageMent 5 quickly acquire innovative skills. a social environment that massages individual’s characteristics such as perceived usefulness, personal innovativeness, prior experience, image, and satisfaction with innovation has been proven to have a higher impact on an individual’s adoption of innovative technology (acheampong et al., 2017). slimane et al. (2019) add that innovation adoption is likely to be influenced by the innovation employed by others in the employee’’ social context. as such, real estate firms must create enabling conditions in form of supportive factors, such as the availability of training programmes, to encourage staff to embrace and apply innovation (lee et al., 2019; ghaleb et al., 2021; slimane et al., 2019). Organization resources and costs of technology Organization resources have the power to leverage on appropriate infrastructures needed for the adoption of new technology. these infrastructures necessitate digital processes that enable a business to comprehend the environment, display the appropriate responses, assess competitor’’ shopper demands and threats, and make the appropriate judgments. in the present-day competitive world, retailers, by geofencing around the sites of their competitors will be able to compete more effectively (arief etal., 2020). the most perceptible problem that businesses face is lack of access to resources as technology becomes outdated (Burch & Mohammed, 2019). Fountaine et al. (2019) explain that the reason real estate businesses are slow to switch away from legacy systems and infrastructure could be explained by the marginal benefit acquired by shifting to a new system rather than the technological difficulty of converting services to a modern system. Moreover, ciuffoletti (2018) indicates that initial adoption of a new technology with no evident proof of concept and lack of alignment to business innovation strategy may threaten investment return in the long run. Ecosystem for the adoption of geofence mobile technology in developing countries there is widespread evidence that several developing countries’ markets are ripe for the adoption of geofence technologies across many of their economic sectors. across africa, the market reflects growth in its tech ecosystem that continues to see a record number of investments amid rising demand for digital techs (the citizen, 2022). Because of the benefits of leapfrogging among other favourable conditions, there is widespread use of mobile devices in developing countries. For instance, stassa (2021) indicates that 97.6% of south african households have access to at least one mobile phone. Beyond data costs issues that likely limit internet use, there is still room to reach wider shoppers through the short messaging service (sms), mall advertising, tv/radio adverts, etc. that do not need internet connection. in kenya, Juma etal. (2022) describe that the country has favourable conditions for mobile application use. in their study aimed at establishing the potential for a mobile-phone-based application in nature interpretation amongst visitors and guides visiting kenyan national parks and reserves, Juma et al. (2022) show that there is adequate threshold of needed transportation and hospitality infrastructure, such as charging stations and internet access that are installed in transportation hubs and carriages, making tourists in kenya national parks and reserves more comfortable. the evident policy shifts have also led governments and other players to invest in free Wi-Fi, for instance, around shopping centres could be the needed boost required to allow for accurate measurement of actual visits to a shopping centre (Pretorius & cloete, 2020). For instance, in kenya the government plans to roll out 25,000 free community Wi-Fi hotspots to markets around the country, while in the south africa the government plans to connect over 33,000 community Wi-Fi hotspots nationally (Business Daily, 2023; khumalo, 2022). When shoppers opt-in to use free in-mall Wi-Fi and provide information about themselves, retailers are able to build shopper personas allowing them to draw insights from the generic and personalised shopper data. retailers can further get more shopper data through targeted surveys using mall apps integrated to their Wi-Fi infrastructure. a combination of the in-mall data, drawn from the Wi-Fi infrastructure and out-mall data, using geofence mobile technology can help retailers predict what shoppers want and influence them across marketing channels. also, there is huge potential for the adoption of new and inventive marketing technologies since there is a sizable younger population and relatively well-off shoppers who are likely to prefer the 6 k. cherUiYOt anD k. MOenYane convenience of online and mobile transactions. in south africa, for instance, statssa (2021) show that younger south africans (e.g. millennials and later generations at least 15 years) account for almost 50% of the total population. With the african younger and rich residents probably being more urban as well, it portends a fertile ground for the use of digital technologies, including geofencing technology (the citizen, 2022). so far, several developing countries, for example, nigeria, kenya, Uganda, tanzania, cameroon and south africa, have had many of their economic sectors transformed by innovation in e-hailing firms, such as Uber, Bolt, Yookoo ride, scoop a cab, airbnb, gett, Ola cabs, little cab, Free now, easy taxi, and Wingz (Briefly, 2022; the citizen, 2022). these businesses by embracing digital business strategies have expanded their market share faster and performed better than those that still followed traditional business practices (haffke etal., 2017). Beyond these business models centred on sharing, such as ride-sharing and room sharing, several developing countries have also witnessed the adoption and use of geofencing mobile technology in vehicle tracking, fleet management, security and marketing in some sectors in these countries (cartrack, 2022). the above review has shown that while little is understood about geofence mobile technology and how it can impact other new business models, the little evidence mimics a potentially lucrative ecosystem for the widespread adoption, use and influence of geofence mobile technology across the entire business structures in developing countries (lenka et al., 2017). More importantly, the recent global covid-19 pandemic, which saw the south african listed real estate sectors endure loses in capitalised value, for example, may have heightened the need for retailers to embrace new technologies to generate other sources of income and bring more feet to their centres going forward. Research approach Data collection this paper employed interpretivism research approach since the researchers wanted to determine participants’ comprehension, perspective, and experience rather than relying on statistics (thanh & thanh, 2015). as advised by thanh and thanh (2015), the researchers chose qualitative research approach in form of semi-structured in-depth face-to-face interviews that allowed for flexibility in gathering information from participants’ experiences towards obtaining rich and in-depth information on the research problem at hand. Participants, namely retail property managers, were conveniently identified by the researchers and invited to participate in the study. the choice of retail property managers was motivated by the need to select participants with work experience in the retail property sector and had some knowledge about geofence mobile technology. retail property managers offer a wide range of services to retailers in areas such as market analysis and insights, operational support and maintenance, marketing and promotional activities, technology integration, tenant mix and placement strategy, sustainability initiatives, lease management and negotiation, and compliance and risk management. in this way, retail property managers help create and maintain an environment that is conducive to retail operations, customer satisfaction, and ultimately, sales. the respondents were easily identified and requested to participate in the survey by one of the researchers who worked in the real property sector. the sample size of eight individuals with experience in asset management, property management, or data analysis in a property company within the city of Johannesburg agreed to participate in the interview. the sample size of eight achieved data saturation point or the point where the researchers were no longer able to obtain more additional information from participants (Dworkin, 2012; alsaawi, 2014; guest etal., 2006; Marshall etal., 2013). kuzel (1992) recommends six to eight interviews for a homogeneous sample in qualitative research using in-depth interviews. table 1 shows that the participants positions, industry roles, and length of experiences provided confidence in participants’ responses based on their experiences. Participants were probed to respond to what they considered to be the opportunities of and main barriers to adopting and implementing geofence mobile technology in the retail property sector in south africa. the semi-structured interviews adopted by the researchers were generally relevant since cOgent BUsiness & ManageMent 7 they were open-ended and permitted further probing in case further details were needed. Probing and follow up questions enabled the researcher to elicit more responses and clarity from the participants. the open-ended questions also gave the participants complete freedom to go into as much depth as possible when discussing the various subjects and bring in new information that they felt relevant to the study (see annexure a for interview questions). Before the interview, participants’ consent was sort and the interview only proceeded if participants agreed to it – with an option to terminate the interview at any time if they felt uncomfortable or for any other reason. each interview took approximately 30 minutes. the interviews were conducted in english as all participants were proficient in the english language. in addition to ethical clearance that was approved by the University ethics committee, pseudonyms were used instead of real names in the paper, which kept the identities of the participants private. Data analysis the paper adopted thematic analysis as its analytical strategy. this was motivated by the fact that the huge amounts of qualitative data obtained meant that the thematic analysis, such as from transcripts in this paper’s case, was the appropriate analysis strategy. this paper used a six-phase theme analysis as defined by Braun and clarke (2006). the six-phase theme entailed the researchers; (i) familiarising themselves with the data, (ii) generating preliminary codes, (iii) searching for themes in the data, (iv) reviewing the identified themes, (v) defining and naming the identified themes, and (vi) producing a report. nVivo 12 software was used to load the data and code it for meanings. the first phase’s notes acted as a preliminary list of concepts for the material, emphasising important themes that arose from the data. each data item received ‘full and equal attention,’ as recommended by Braun and clarke (2006). codes were frequently checked ensuring that meaning was not missed, and occasionally more codes were given to a data item. the researcher made notes of any potential connections within codes and recurring patterns that came to mind at the coding stage. nVivo 12 software allowed for a systematic identification of potential connections between codes and potential themes that would represent a collection of codes that appeared to be similar (For more details on what each of these phases entail, see Braun and clarke (2006)). subsequently, discussion in the next section of the paper focuses on the identified themes. Results and discussions Opportunities arising from the adoption of geofence mobile technology in the retail sector the participants were unanimous on the potentials that geofence mobile technology has to offer the retail property sector in south africa. While responses relate directly to retailers, there are implied benefits that accrue to shoppers and property owners (landlords) as well. the following section, however, presents and discusses results associated with retailers. Targeted marketing and shopper engagement geofencing mobile technology is a new means of providing targeted marketing to shoppers as their presence can be tracked within some radius near stores. VU and sU shared the following views: Table 1. Description of interview participants. 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Annexure A. Semi-structured interview questions Section A a) how many years have you been working in the property sector/asset management/leasing? b) What is your speciality? c) What is your position/job title? d) how many years have you been in your current position? e) how many years have you been in the retail property sector? f) Do you belong to any professional property bodies in south africa? in which capacity? g) What is your age range? Section B a) What would influence your clients (retailers) to adopt geofence mobile technology? b) What are the opportunities that accrue from the implementation of geofence mobile technology)? 3. What do you consider to be the main challenges with adopting geofence mobile technology?