Commerce today happens on a spectrum. Online retail spending is exploding, and this is blurring the lines between online and offline transactions. The web will account for 7.4% of total retail spending in 2016 (about $1.67 trillion), and mobile commerce represents one of the fastest areas of growth. According to a BI Intelligence report, mobile commerce will make up 45% of total e-commerce ($284 billion) by 2020.

Mobile devices are transforming the way people shop. We use our phones to decide what store to visit, make spur-of-the-moment purchases, and compare prices. In fact, 71% of shoppers believe that they will get a better deal online than in stores. Mobile devices bring online commerce into the physical world, which means most transactions cannot be lumped definitively into one category.

As online and mobile commerce continue to rise, and as the barriers between “online” and “offline” continue to fade, it is more important than ever to understand customer behaviors across the two channels and connect them. The most efficient way for marketers and advertisers to connect the two is using mobile location data, and through understanding consumer behavior in the real world.

Location, Location, Location

Before the era of e-commerce, retailers had limited information about what individuals bought and why. The internet broke open this black box by making customer behavior data easily accessible. However, while data from online sales is valuable and should be utilized, that data alone does not provide a holistic view of the customer.

With mobile, marketers now have access to location data that paints a much clearer picture of a consumer’s behavior in the real world. These data insights can be tied to a brand’s online sales data, CRM data, and any other 3rd party data such as demographic, PRIZM or Census data that helps give marketers a 360 degree view of their customer.

With all of that data in place, marketers can now not only tie online to offline, but also segment their customers based on shopping patterns and actual store visits to create dynamic and highly personalized marketing campaigns that deliver a single, unified and seamless user experience, and drive more customers into stores.

 Click here to learn about the different ways you can use location data for mobile advertising!

Location data also allows marketers to measure the impact their marketing campaigns have on in-store visits and traffic patterns. This ensures they spend their mobile ad dollars in the places where they drive the greatest returns.

The Emerging Availability of Payments Data

Some providers are now partnering with large payment companies like MasterCard to get a more accurate depiction of purchase behavior. Pairing location data with transactions, helps narrow down which segment of shoppers is most likely to make a purchase within a specific location. These granular insights can then be used to serve targeted ads within a particular brick-and-mortar business to the groups of shoppers most willing to purchase. All of the data is aggregated and analyzed as an index, so as to protect individual shoppers, while empowering brands to understand whether a sample of user IDs exposed to an ad actually made a purchase.

Mapping the physical world through data

For evidence of the growing interest and importance of location data, look no further than Facebook and Google. The internet giants are investing significant resources into mining data about the physical world. Both companies have released products that examine how customers behave in the real world and tie that information to their online profiles.

Google is drawing on data from across its stack—Earth and Maps, POI data, Wi-Fi signal strength in stores, GPS signals, search query data, location data from opt-in users, and more—to enable new ad units with location and give advertisers greater insight into the impact their ad spend has on real-world purchases. Facebook is matching data from GPS, beacons, Wi-Fi, radio signals, and cell towers to place data–from store locations, transactions, etc.–to create a clear picture of consumer behavior.

These are significant steps towards building a scaleable “ID graph,” connecting all the various data points about consumers (across devices and channels) into a fountain of insight for advertisers. Large scale ID graphs enable marketers to weave together messaging across devices and platforms, make their ad units more potent by making them location-aware, and measure the impact of online purchase behaviors and in-store visits.

There’s no denying that e-commerce is on the rise, but the fact remains that 90% of retail transactions still happen in the real world. To bridge this gap, marketers must create the same experience across all channels, and big name players, like Facebook and Google, have already taken notice and started to activate their location data.

By 2018, global smartphone users will reach the 2.5 billion mark, according to eMarketer., which means the opportunity for marketers to understand consumer behavior and utilize that information is only going to grow larger. Location data will play an increasingly central role in mobile marketing as companies strive to understand the full path-to-purchase. Before long, nearly every campaign will utilize location data, creating a mobile advertising ecosystem that drives better results for everyone involved.