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Last Updated Jan 31, 2024

Unlocking the Potential of IP Geolocation in E-Commerce

Elizabeth (Lizzie) Shipton

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Locating a user by their IP address is a powerful tool in today’s online world. IP geolocation is leveraged by ride-share apps, review sites, social apps, weather apps, on-demand delivery services, and much more.

But it’s not only location-based apps and sites that can take advantage of geolocation data. Your e-commerce website can also use IP geolocation to improve users' experiences and increase conversion rates.

Let’s find out how.

Introduction to IP Geolocation in E-Commerce

Geolocation is the process of determining a user’s geographic location via data obtained through their device. Geolocation can be done with GPS, Bluetooth, WiFi, or through IP address lookup.

When an IP address is used to obtain geographic location data, the IP address assigned to a device by the internet service provider (ISP) is compared to a database of IP addresses and their known geographical locations. While IP geolocation can’t tell you a user’s exact location or street address, it can give you valuable information like time zone, city, state, language, and postal code.

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The Importance of Geolocation for Online Stores

Online stores and e-commerce sites can use this information to not only improve the customer experience, but also to gain valuable demographics, improve security, and improve conversion rates on marketing campaigns.

Let’s look at the three primary use cases for IP geolocation in e-commerce:

  • customizing the user experience based on location
  • running targeted promotions and ad campaigns
  • improving cybersecurity and preventing fraud

Customizing User Experience Based on Location

Content localization is the practice of serving website content based on a user’s location. This can mean

Geolocation technology can also be used to show specific content to users in different locations. For example, users in India and in the United States will have very different tastes. You might show your Indian users completely different web pages compared to your US users.

Transfergo is a fintech company using IP-based geolocation to improve the user experience for immigrants by detecting their country automatically without users having to submit complicated documentation and wait for processing. This leads to faster transactions and smoother checkouts.

Regional Preferences and Targeted Promotions

Another useful way to use location information is to run targeted ad campaigns. This can be done

  • by online retailers to highlight promotions only meant for users in certain countries
  • by retailers with brick-and-mortar stores to drive users to the physical location where a sale is currently happening.

This type of geotargeting allows you to do very sophisticated optimization of your ad campaigns, resulting in higher ROI and better routing to your target audience.

Jetsmart is an airline company that uses geographical data to run targeted promotions in different countries. For example, they recently ran a 50% discount in Chili, but nowhere else. Geolocation allowed them to show this deal only to users in Chili, and to display the promotional price in the correct currency.

Fraud Prevention

Online fraud is a major concern for most online retailers. IP geolocation data can be used to

  • check the location of incoming requests against a user’s known location
  • ensure that a request is not coming from a hacker or other bad actor

For example, when a user checks out with a credit card, the location of the IP address being used to make the purchase can be checked against the address stored for the user in your database. If there is a mismatch, you can block the request and send an email alert to the user to verify that the request came from them.

Read more about IP Geolocation and fraud prevention.

Threater uses geolocation for threat intelligence. They provide real-time feeds of threat data from different countries to their users by translating incoming IP addresses to geolocation data via a high-speed API.

Case Studies: IP Geolocation in Action

In addition to the companies outlined in the section above, many more online companies use geolocation to improve their apps and websites across various industries, from e-commerce to higher education.

Allbirds

Allbirds, a next-generation shoe company, uses IP geolocation to serve images based on a user’s country. These images and graphics not only contain localized and translated text but also depict the shoes in culturally appropriate settings.

For example, a user in China might see the following image:

While a user in the US might see this instead:

Harvard

Harvard University, along with many other institutions of higher education, uses geolocation to more effectively manage recruiting new students, and outreach to alumni. Geolocation can be used to target outreach to areas most likely to be receptive to a school’s recruiters. It can also be used to send targeted newsletters to alumni and donors.

AT&T

When telecom companies like AT&T undergo large-scale mergers, it often means combining the sales territories of multiple teams. Location data services like Geopointe provide tools that allow these companies to visualize sales territories directly from a map and customize the areas without minimal time wasted.

How to Implement IP Geolocation

Adding IP geolocation to your app or website is relatively easy. Many real-time IP geolocation APIs integrate easily with apps written in any language and can verify the IP address of an incoming request against a database of hundreds of thousands of geolocated IP addresses.

Choosing the Right Geolocation Software

The IP address geolocation software you choose will ultimately be decided by a few key factors: accuracy, ease of integration, customer support, and price.

Accuracy

Most IP geolocation APIs can accurately pinpoint a device’s location to within about 95-99% accuracy for the user’s country and between 55-80% accuracy for the user’s region or state.

Ease of Integration

Choose a geolocation API that has clear documentation, and robust SDKs, and delivers its responses in a common, easy-to-parse format like JSON. Some APIs also offer integrations with specific apps or through Zapier.

Customer Support

If you are not technically savvy or do not have engineers dedicated to working on your IP geolocation integration, you will need solid customer support to help you integrate the solution and troubleshoot any potential bugs.

Price

Determine how much traffic you anticipate will need to be handled by the API. Many services offer bulk pricing or discounts for heavy use.

Advanced Strategies for Leveraging IP Geolocation

Once you have IP geolocation services integrated into your site or app, there are many ways you can use them to improve your marketing strategies.

Personalizing Content and Offers

Here are a few ways you can make your website visitors’ experiences more personal:

  • Send tailored deals to visitors in specific locations
  • Send updates based on current events happening in specific places.
  • Send tailored notifications when users are physically near your store
  • Send location-based reminders and texts

Digital Rights Protection

Digital rights protection means blocking content for users in certain locations, based on copyright or other legal considerations. For example, if you don’t want users in certain countries to be able to access your content, you can use geolocation to filter and block those incoming requests.

IMAGE: digital-rights

Conclusion: The Future of Geolocation in Online Shopping

Geolocation will only become more sophisticated as artificial intelligence allows us to improve the accuracy of geolocation services and create even more tailored, personalized content for shoppers. From indoor navigation of large malls and stores and augmented reality, to optimized supply chain solutions that decrease retailers’ carbon footprints, geolocation is likely to play a big role in how e-commerce grows over the next ten years.

Don’t get left behind! Check out AbstractAPI’s Free Geolocation API for a quick and easy introduction to IP address geolocation for your app or website and start reaping the benefits of localized content, better fraud prevention, and improved ad targeting today.

FAQs

What is IP geolocation and how does it work?

IP geolocation is the process of determining a device’s (and therefore user’s) physical location via their IP address. Every device connected to the internet has a unique IP address that contains geographical data about where the address was assigned.

How can IP geolocation improve my e-commerce sales?

IP geolocation can improve the customer experience by serving localized content, enhancing fraud prevention, and sending targeted marketing campaigns to users in specific geographical locations.

What are the best practices for implementing geolocation on my website?

Always make sure that any IP geolocation service you use adheres to all privacy laws and legal standards governing the use of user data. You must always obtain a user’s consent to track their location, and may not sell their personal information to any third parties without explicit consent.

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Elizabeth (Lizzie) Shipton
Lizzie Shipton is an adept Full Stack Developer, skilled in JavaScript, React, Node.js, and GraphQL, with a talent for creating scalable, seamless web applications. Her expertise spans both frontend and backend development, ensuring innovative and efficient solutions.
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