Geofencing Marketing Explained: What It Is & How to Start

Customers are constantly on the move, smartphones in hand. “Open now near me” searches have increased by 400% in the last year, driving a mobile commerce industry that’s tipped to exceed $2.5 trillion in retail sales this year.

When a customer’s already nearby and ready to spend, the question isn’t if they’ll buy—it’s where. Geofencing meets them where they are, using location-based marketing to drive foot traffic towards your store. 

This guide breaks down what geofencing marketing is, how it works, and how to start developing your own geofencing strategy.

What is geofencing marketing?

Geofencing, or geofencing marketing, is a location-based marketing strategy that sends targeted messages—like push notifications, ads, or SMS—when someone enters or exits a predefined geographic area, or “fence.” It uses signals like GPS, Wi-Fi, or cell data to pinpoint where users are in real time.

Here’s what geofencing marketing looks like in action. Phil walks past his local London coffee shop. Moments later, his phone lights up with the message:

“Hi Phil! You’re near Starbucks Oxford St. Get 50% off your favorite drink—the Vanilla Latte!”

That message wasn’t a coincidence. It was triggered by a geofence and personalized using customer data. The retailer combined Phil’s location with his known preferences to deliver a message that’s timely, relevant, and hard to ignore.

How geofencing marketing works 

Geofencing uses a mix of location-based technologies that track whether a user’s device enters or exits a virtual zone in real time. These include:

• Global positioning system (GPS) for wide-range accuracy—ideal for drive-time zones.
• Wi-Fi and cellular data for denser urban areas.
• RFID and Bluetooth beacons for hyper-precise indoor targeting. Think, malls or airports.

Using a geofencing platform or software, retailers define a virtual perimeter—the "geofence"—around a specific real-world location. The shape can be simple (a circle) or custom-drawn to match real-world boundaries like a building footprint.

Once someone crosses into that zone—by foot, car, or bike—the system detects the movement and activates a preset trigger. 

Once triggered, the system delivers a pre-programmed message or piece of content to the user's device. This could be an SMS message, an in-app message, or even a targeted ad displayed on social media or other ad networks, often including personalized offers, relevant information, or a discount.

⚠️Note: Geofencing is restricted by law in some states, especially near healthcare facilities. Staying compliant is super important in an age where 62% of Americans already worry about how much data people have about them on the internet. Discover geofencing laws by state here. 

Benefits of geofencing marketing

Hyper-targeted advertising

Instead of casting a wide net, geofencing is like fishing in a stocked pond. You can move beyond broad demographic targeting and reach potential customers based on their real-time physical location and proximity.

This means your advertising spend is concentrated on customers who are geographically positioned to act on your message, whether that's visiting a physical store, taking advantage of a local delivery offer, or engaging with an event-specific promotion, ultimately helping you attract more local customers.

Valuable customer insights

One of the most powerful aspects of geofencing is the data it generates. You can gain insights into:

• Foot traffic patterns: Understand when and how often customers visit specific locations (yours or even competitors').
• User behavior: Analyze how users respond to location-based offers. Do they open the notification, click through, and make a purchase?
• Campaign performance: Measure the effectiveness of different geofenced campaigns by tracking metrics like redemption rates, store visits attributed to the campaign, and engagement within specific zones. 

Higher conversion rates

Because geofenced messages are delivered to users in a specific, relevant context (e.g., when they are near your store or an event you're participating in), they tend to garner higher engagement. The immediacy and relevance of geofencing advertising can also dramatically shorten the path to purchase.

How to implement geofencing marketing in 5 steps

1. Set your goals

Before you start drawing virtual fences around your retail location, start your strategy with a clear idea of what you want to achieve. The tighter your goal, the easier it’ll be to measure success and optimize fast.

 Are you trying to:

• Drive more walk-ins during slow hours?
• Steal foot traffic from a competitor down the block?
• Promote a limited-time offer at your newest location?

Now’s also a good time to think about who you’re targeting with the campaign. Are they commuters? Tourists? Students? Local searchers within a 5km radius? This will shape your geofence boundaries, triggers, and message tone.

2. Choose the right platform

When selecting a geofencing solution, consider how it can integrate with or complement your existing retail toolstack. This could mean automatically updating inventory visibility for location-specific offers, or tracking coupon redemptions that originate from geofenced campaigns to attribute revenue back to specific locations or triggers.

While dedicated geofencing trigger apps directly within Shopify are less common for sending push notifications purely based on a drawn fence, many Shopify apps support location-based segmentation for marketing:

• Mobile shopping apps like Shop Pay: Segment subscribers by location data they've shared from their unified profile, then send targeted pushes to users in specific cities or regions.
• SMS marketing apps like Yotpo or Klaviyo: Both tools can offer location-based segmentation for text message campaigns.

💡Tip: If you’re a Shopify store owner, your store is already a central hub for your ecommerce operations, managing products, customer data, and often, local marketing automation. This unified real-time data can be incredibly powerful when combined with location intelligence.

3. Set up your geofence

Open your geofencing marketing tool, drop a pin on your location (or your competitor’s), and draw your perimeter. You can define:

• A walking radius around your store.
• A single building (like a mall or event venue).
• Multiple zones for different store locations.

Then determine what action will trigger your message. Common triggers include:

• Entry: When a device enters the geofenced area.
• Exit: When a device leaves the geofenced area.
• Dwell time: When a device remains within the geofence for a specific period (e.g., 5 minutes), indicating potential engagement or interest.

Finally, decide what kind of message the trigger will activate. This could be a push notification, an SMS, an in-app message, or the delivery of a display ad through an ad network.

4. Create your marketing message

A generic “Come visit us!” won’t cut it for a successful geofencing campaign. It doesn’t tell the customer why they should care, what’s in it for them, or why now. 

Good geofencing marketing messages check three boxes:

1. Timely: They match the moment.
   “Just 2 blocks away? We’ve got cold brew waiting.”
2. Personalized: They reference past behavior or preferences.
   “Hey Jess—your usual’s 20% off ‘til 5 PM.”
3. Actionable: They tell the user exactly what to do next.
   “Tap to reserve your spot before it sells out.”

Here’s where Shopify’s unified customer profiles give you a serious advantage. Every order, in-store transaction, abandoned cart, or email click feeds into a unified profile. That includes:

• Ecommerce behavior: Browsing, wish lists, abandoned carts.
• Retail POS data: Purchases, returns, loyalty redemptions.
• Third-party apps: Email tools, CRMs, analytics platforms.
• Inventory and fulfillment information: What they bought, where it was shipped, and when.

All of this customer data syncs automatically, so you get a complete view of each shopper—whether they browse online, in person, or both. So instead of sending a generic “20% off today!” message, you could send: “Hey Tania—your go-to SPF just restocked. 10% off if you swing by before 4 PM.”

💡Discover: According to a recent POS Market Report, retailers using Shopify POS save the equivalent of 0.4 full-time employees per store just by unifying their workflows. 

Centralizing data across channels also reduces the need for middleware and duplicate systems. In fact, merchants report a 22% lower total cost of ownership by eliminating redundant tools just to maintain a single customer view.

5. Test your geofencing campaign

Before going big, run a pilot. That’s the golden rule of any smart marketing play—especially with geofencing, where timing, location, and messaging all have to click.

Here’s what to look for:

1. Are your triggers firing accurately? Walk through the geofence yourself (yes, literally). Did the message show up? Was there a delay? Did it feel natural, or too late to be useful?
2. Is your target audience opening and engaging with your messages? Use your geofencing platform and Shopify reports to track opens, clicks, and redemptions. If people see your push notification but don’t act, the message might need a sharper hook. 
3. Are your systems connected? Did anyone who got the geofence message actually check it out? Did they buy what you promoted? Unified commerce platforms like Shopify make it easy to trace those conversions back to the moment they entered your perimeter.
4. Any weird patterns? A 5-minute dwell-time trigger might be more effective than an instant one if you’re targeting shoppers, not commuters.
5. Is your staff ready? If you're running in-store redemptions, make sure frontline employees know what the offer is and how to apply it. Nothing kills a campaign like confusion at checkout.

💡Tip: Use Shopify Flow to set up automated follow-ups for customers who triggered your geofence but didn’t convert. A well-timed email or SMS the next day—“Still thinking about that jacket? Come back for 15% off”—can help close the loop.

Real-world geofencing marketing examples

The way you draw your boundaries—and what you say once someone enters them—depends entirely on your goals, business location, and audience. Here are some tried-and-true geofencing ad strategies for your next local advertising campaign.

Competitor conquesting

Many businesses set up geofences around competitor locations to attract customers who might be comparison shopping. 

Burger King, for example, drove 1.5 million app downloads with its viral geofencing marketing strategy, “The Whopper Detour.” Anyone who came within 600 feet of a McDonald’s location received a push notification offering a Whopper for just one cent, but only if they ordered through the Burger King app. 

Once the order was placed, the app redirected them away from McDonald’s and toward the nearest Burger King location to pick it up.

Walk or drive time boundaries

Rather than simple radius-based geofences, advanced implementations can create boundaries based on actual walking or driving distances.

For example, HotelTonight’s "Rate Drop" feature activates after 3 PM when users are within a few miles of participating hotels, offering additional discounts of 10%-40% on accommodations. Its "Bonus Rate" feature also provides deeper discounts to users who are farther away from hotels, recognizing that these customers might need extra incentive to make the journey. 

Footprint targeting

Highly precise geofencing can outline exact building footprints rather than simple circular boundaries. 

Sephora brilliantly demonstrates this with its "Store Companion" feature. The moment a customer crosses the threshold into a Sephora store, their app transforms into an interactive shopping assistant. 

This precise in-store geofencing gives customers instant access to their purchase history, personalized product recommendations, reviews, limited-edition offers, and information about in-store events happening that day.

Improve your local marketing with Shopify

Geofencing works best when it’s connected to the rest of your retail toolkit—and that’s where Shopify shines.

With Shopify, your customer profiles, in-store activity, ecommerce behavior, and marketing automation all live in one place. That means you can trigger hyper-local campaigns and measure the results, without juggling platforms or piecing together data manually.