Last updated
April 25, 2024

How do Businesses like e-Commerce Sites use Geolocation Data

Elizabeth (Lizzie) Shipton

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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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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.

1. 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.

2. 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.

3. 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 for e-Commerce websites

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, 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 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.


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.

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

1. 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.

2. 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.

3. 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.

4. 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.

Elizabeth (Lizzie) Shipton
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