Even though brands such as Ford, Starbucks and L'Oréal have been testing geofencing in recent years, the location-based marketing practice is still a mystery to the grand majority of industry players (the name probably doesn't help).
In the simplest terms, geofencing is when a retail advertiser zaps an offer to consumers' cellphones when they stand near that brand's store—as long as they've previously opted-in to receive such promotions. (Geofencing can also be executed via a particular location; Gap used the technique to deliver mobile ads to consumers waiting at bus shelters.)
Yet that's just the tip of the proverbial iceberg in terms of how the marketing platform actually works. So Alliance Data, a Dallas-based loyalty company, created an infographic for Adweek so readers could get a visual understanding about how geofencing plays out on a technical level for an SMS-based campaign.
It should be noted that "ShopWell" is a fictitious retail brand Alliance Data came up with for the purposes of the infographic. At any rate, check out how cellular triangulation and other technology systems deliver discounts to numerous phones everyday.