The retail industry is experiencing a fundamental shift in consumer expectations as mobile technology nears ubiquity. Since 2011, the mobile retail audience—people that frequently engage with retail content and ads on their mobile devices—has grown 300 percent. Yet despite this tremendous increase, research has shown that retailers aren’t keeping up: a recent study by Infosys found that 75 percent of consumers believe retailers currently miss the mark in targeting them with ads on mobile apps, and 72 percent do not feel that online promotions or emails they receive resonate with their personal interests and needs.

So, how can retailers bridge this gap? To start, their messaging must be targeted. Consumers have long complained about receiving ad messages not relevant to them, and the old practice of buying media in a blanket approach is becoming obsolete. Thanks to tablets and smartphones, retail marketers can now geo-target messages to the customers who are more likely to buy in that particular area. Geo-targeting by itself, however, does not go far enough. What retailers need to do is reach potential customers not only when they are in your area, but when they actually want a particular product.

Now they can. “Demand tagging” is a whole new way to engage customers, far beyond geo-location or keyword ads alone. Using commentary on social media sites, businesses can hone in on consumers’ wants and desires based on their social media activity. Then, by combining that information with geo-location technology, they can reach out to those users in their area with targeted offers and promotions – thereby “demand tagging” prospective customers.

Let’s see what this would look like in the real world. Say that as part of their social marketing strategy, a national shoe brand, BigShoe, uses demand tagging to engage consumers that are shoe shopping. BigShoe uses their social intelligence tool to monitor keywords and their competitors’ handles, so when certain keywords appear, or someone mentions a competitor with negative sentiment, BigShoe can use demand tagging to engage with the unsatisfied consumer and ‘steal’ them from their competitor.

For example, if Mary goes into her local ShoeMart, one of BigShoe’s chief competitors, and they don’t have the shoes she wants in her size, she might tweet out something like, “Well, there goes my run today. Wish @ShoeMart had size 7s!” BigShoe, seizing the opportunity with demand tagging, tweets back: “Hey @Mary! We’ve got your size 7s waiting in our store down the street. In fact, show them this tweet and you’ll get 10% off!” BigShoe just landed themselves a new customer.

Because demand tagging identifies people not just by their location, but their actual need, it’s likely to be a better fit for both the consumer and the business. As a result, every message is relevant, every promotion is geographically valid, and businesses can better utilize resources by eliminating a huge amount of wasted impressions.

By providing a more intelligent shopping experience, retailers can foster deeper levels of consumer affinity and loyalty. As mobile usage continues to spread, retailers that embrace demand tagging best practices today will enjoy substantial competitive advantage tomorrow.