Starbucks and L'Oreal stores in the UK will now lure users with money-off vouchers as they pass in the vicinity of thier stores. The two brands are the first in UK to have opted for location based mobile marketing on O2's network.

O2 has partnered Californian company Placecase, which has already implemented the model in US, to deliver targeted SMS and MMS to registered users on 'O2 More', numbering around a million, based on their whereabouts.

Starbucks will offer vouchers, redeemable at its stores and grocery outlets, on its VIA Ready Brew product. L'Oreal meanwhile is using the initiative for its Elvive brand of products, and will offer buy one get one free offer on the product brand to users in the 'geo-fence' (perimeter) around Superdrug store,  the high street health and beauty retailer.

The system uses GPS technology developed by Placecast to track the whereabouts of users. Besides the  service will work on any mobile phone and does not need an app.

The SMS will be sent on preferences filled in by users such as age, gender and interests. So, the Starbucks schemes will be sent to O2 More users who have chosen food and beverages option while L'Oreal will target O2 users with interest in beauty.    

''With the launch, O2 immediately enables the UK's favourite retailers and brands to reach over one million opted-in consumers on their mobile phones when they are in a mind-set to make a purchase,'' the company said in a statement. 

Around 1,500 geo-fences are being set up across the UK for Starbucks and L'Oréal by Placecast, said  Alistair Goodman, Placecast's chief executive. 

The targeted locations will extend beyond the immediate vicinity of the stores, giving marketers the ability to tie specific offers to specific locations should they choose, or to react to local weather conditions, he added.

In the US, Placecast has previously launched 'geo-fencing' systems for clothing retailers North Face and American Eagle.

Shaun Gregory, managing director of O2 Media, said, ''The growth of location-based services will create a golden age for proximity marketing. It fuels a growing expectation among consumers for personalised advertising via their mobile phones that is directly relevant to their passions.

''The market potential here is huge - it has already had massive success in the USA - and this is another nail in the coffin of the old model of reaching mass audiences in one go.''