As marketers, we are familiar with the concept of engaging customers with mobile marketing based on their location. When a customer nears a location, push them an offer. As consumers, we have also likely experienced this strategy, whether we recognize it or not.
While this real-time engagement strategy enables businesses to connect with customers at the “perfect” moment, it has traditionally lacked the ability to personalize the offers it sends. And that’s where AI comes in. Machine learning models are now powering these location-based rewards and offers, so customers receive personalized notifications triggered by their physical proximity to a store or service. Whether it’s a push notification for a discount when a customer is near a retail outlet or an invitation to redeem a reward while visiting a specific location, AI ensures these interactions are timely, relevant, and engaging. This capability strengthens brand loyalty by providing a more personalized experience. While some customers may be a bit “taken aback”, most are OK, knowing that a trusted brand shows they are proving they know them. In fact, 90% of consumers are open to sharing location data for deals or convenience.1
The AI powered location-based marketing benefits don’t extend just to customers, but to all businesses, including small businesses. AI powered location-based marketing is changing the way small businesses reach local customers, enabling them to provide personalized, real-time experiences.2 This essentially is leveling the playing field for local businesses to provide their customers with personalized, timely offers and notifications and is no longer just corporate businesses able to provide this type of outreach to their customers.
By analyzing individual preferences, purchase history, and behavior patterns, AI ensures that customers receive offers uniquely tailored to their interests. For example, McDonald’s uses geofencing and AI to detect when a customer is near a restaurant. It uses AI to look at past purchases and frequency, adds in local trends, and tailors an offer to that specific customer. The customer might receive an offer on their favorite meal or a location specific limited-time offer tied to the McDonald’s loyalty program.
Moreover, AI enhances the precision and adaptability of location-based engagement. It can integrate data from multiple sources, such as GPS, app activity, and purchase history, to make smarter decisions. For example, AI can identify when a customer is on their daily commute and deliver more appropriate offers, such as discounts at stores along their route. Unlike traditional geo-targeting, which operates on static parameters, AI-powered systems continuously learn and adapt to customer behavior, ensuring ongoing relevance and effectiveness.
By combining location data with advanced analytics, AI empowers businesses to move beyond broad targeting to create meaningful, real-time interactions. The result is a loyalty win-win: customers enjoy highly personalized and timely rewards, while businesses increase foot traffic, engagement, and sales. With AI, real-time engagement becomes not just a marketing tool but a way to build lasting relationships with customers.
- Hyperlocal Marketing Trends: Using AI and Location Data for Customer Targeting: https://mapsted.com/blog/how-hyperlocal-marketing-trends-transforming-retail-spaces
- AI-Driven Location-Based Marketing: A Game Changer For Small Businesses: https://www.forbes.com/councils/forbesagencycouncil/2025/03/18/ai-driven-location-based-marketing-a-game-changer-for-small-businesses/
