Mobile apps: Possibilities and pitfalls for location-based marketing

John A Quelch and Katherine Ejocz

As excited as we can get ordering items from internet retailers, it is misleading to think that this virtual world of shopping is the future. John A Quelch and Katherine E Jocz argue that although location is more important than ever, many questions remain for mobile apps.

For years, pundits have said that e-commerce presages the death of distance and the demise of place in modern marketing. Nothing could be further from the truth. Even as more and more people go online, they still tend to seek out information, connections, and activities that are close to them. They read news related to their community or country, participate in social networks comprised of friends and family, and buy from local and domestic retailers.

Virtual place has gained dominance over physical place in very few goods and services categories when it comes to the selling process. Software, music, telecommunications, and financial services show the highest percentage of virtual sales because they require no movement of physical product. Yet in 2010 the music industry, one of the hardest hit in the shift away from physical goods, continued to earn half its revenues on physical products sales.