Walk in, log on, and check in: With Foursquare, Loopt, SCVNGR, and Gowalla, you can tell everyone where you are—all the time. It may sound confusing, pointless, or worse, but you’d be surprised.

In a world where Facebook can accumulate some 500 million users in five years, you have to look ahead of the curve to determine the next best way to engage with your customers. For many, the future of marketing lies in the burgeoning category of location-based services.

What on earth are location-based services?

Location-based, or geolocation, services leverage the ability of newer mobile devices to identify where you are geographically and allow you to “check in” to share your locale with the business and your friends. Rewards and discounts from savvy vendors are a critical component of the category’s appeal. At the moment, there is no clear leader in this heavily fragmented space. While Foursquare, with its 2 million users, seems to be the tech industry’s darling, other serious players like Brightkite (2 million users), Loopt (4 million), MyTown (2.5 million), and Gowalla (340,000) have emerged. SCVNGR, another geolocation service, combines location with gaming and has acquired a loyal following within the jewelry industry by creating “Diamond Dashes” nationwide. With the recent introduction of Facebook Places, half a billion potential users now know about location-based services.

Big brands are getting on board…but are customers?  

Major players like Ann Taylor, Starbucks, Louis Vuitton, and Zagat, sports teams like the Nets and the Patriots, and even TV shows like Gossip Girl have realized the potential of these services, but the consumer does not yet seem overly concerned. According to a recent study by Forrester, just 4 percent of U.S. adults use geo-based services, and only 1 percent use them more than once a week. Meanwhile, 84 percent of respondents said they weren’t familiar with these apps. Not exactly encouraging statistics—but keep in mind that early users tend to be the same trendsetters ­jewelers try to reach. And remember, sites like Facebook and Twitter had similarly disappointing stats before they became commonplace in our lives.  

There are some real challenges here.

Consumers have been apprehensive for a variety of reasons: It can be cumbersome (and potentially rude!) to whip out your phone and go through the process of “checking in” every time you walk into a store or restaurant. And there are also privacy issues. (Do you really want to let people know where you are if you are about to buy an expensive piece of ­jewelry?) However, the benefits of special deals and special treatment are catching the attention of web-wise customers willing to help publicize your store in exchange for a deal. The bottom line is that growth will likely be slow until these services become safe and easy to use, but you may want to start using them to target local influencers.

How can jewelers use these services?

Dashing for diamonds at Fink’s Jewelers

There is talk that location services will revolutionize everything from events to coupons and even long-term loyalty programs. Jewelers, however, are just getting started. Dan Gordon, from Samuel Gordon ­Jewelers in Oklahoma City, gives away a “jewelry surprise” to anyone who becomes “mayor” of his store. (Mayor is Foursquare’s term for the person who checks in the most at any given location.) Using these tools alongside everyday rewards for your most loyal customers could prove to be a great way to enhance your relationship with the elusive millennials. Some businesses offer perks to frequent guests, including preferred seating and free drinks. The MarketFair mall in Princeton, N.J., has even reserved parking for its “mayor.” Don’t be afraid to get creative here—this is a great opportunity to have fun with your customers.  

Should jewelers take this seriously?

While I wouldn’t suggest making significant changes to your marketing road map, you may want to start experimenting with SCVNGR, Foursquare, and Facebook Places. “Not many retailers believed we would be viable in the market,” said SCVNGR’s Nick Pirie, but “we are driving phenomenal results through store traffic, buzz, partnerships, organic media coverage, and, inevitably, sales for all of our clients.” Fink’s Jewelers recently partnered with SCVNGR for its first event in its hometown, Roanoke, Va. Lindsey Kirby, Fink’s marketing director, was thrilled. “Customer reaction was huge!” she says. “Over 600 people running around downtown in Fink’s T-shirts definitely got us a lot of exposure.”