curing in-store no-sales syndrome: why mobile advertising ...€¦ · brick and mortar chains...
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Curing In-store No-Sales Syndrome:
Why Mobile Advertising Is the “New Black” in Retail
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he retail industry has undergone
extraordinary change over the last
15 years. And, traffic at brick and
mortar chains has dramatically fallen as more
consumers embrace the Internet for comparison
shopping and purchases. At the same time,
traditional means of reaching consumers
through mass mediums like television, radio
and print are becoming less effective given the
wide array of entertainment and news content
consumers can now find online.
However, the emergence of mobile devices
like smartphones and tablets offers enormous
opportunities for all retailers, especially ones
looking to connect their mobile advertising
with physical stores. Combining the location
features of mobile devices with deep pools of
consumer data, retailers can deliver targeted,
highly relevant ads to shoppers whether they
are researching a product at home, playing a
game at a bus stop or walking through the aisle
of a particular store.
TIn 2016, U.S. advertisers will spend $40.24
billion to reach consumers on tablets and mobile
phones, more than doubling the total from 2014,
according to eMarketer.1 But retailers have been
slow to embrace mobile ads due in part to
uncertainty of how to measure whether those
ads are working. However, new technologies
have emerged that enable retailers to not only
track store traffic but also purchases at the
cash register, allowing them to design effective
mobile ad campaigns to best suit the 21-century
digital customer.
New technologies have emerged that enable retailers to not only track store traffic
but also purchases at the cash register.
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1 eMarketer. 2015. Mobile Ad Spend to Top $100 Billion Worldwide in 2016, 51% of Digital Market. Retrieved from http://www.emarketer.com/Article/Mobile-Ad-Spend-Top-100-Billion-Worldwide-2016-51-of-Digital-Market/1012299.
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Shifting Strategy
With a few exceptions, brick and mortar retailers
largely missed out on the first Internet desktop
computer revolution of the 1990s. At the time,
the Internet was still considered an untested,
exotic technology and retailers either ignored
it or failed to invest sufficient resources into
developing an effective digital marketing strategy.
Moreover, physical stores were still performing
well, so retailers had no financial incentive to
change the status quo.
But as large e-commerce sites like Amazon
began to thrive and threaten in-store sales,
brick and mortar chains became faced with an
“adapt or die” scenario. Category killers like Toys
‘R’ Us and Best Buy saw steep sales declines
while venerable chains like Borders and Circuit
City went out of business. For instance, Toys
‘R’ Us is expected to hire 5,000 less seasonal
employees during the 2015 holiday shopping
season compared to 2014, a possible result of a
5% decline in in-store purchases.
Today, retailers are trying to quickly build-up
operations across multiple buying channels in
order to offset waning sales at physical stores.
Enter the mobile device. Whereas retailers failed
to grasp the importance of the Internet the first
time around, the emergence of the smartphone
and tablet - equipped with the convenience of
high speed Internet anywhere - offers stores a
second shot at the digital revolution.
According to research from Deloitte, nearly half
of all U.S. consumers own a smartphone and
of that group, 58 percent use the device for
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store-related shopping. In fact, Deloitte estimates
mobile devices will influence about $700 billion
of retail sales by 2016.2
“Mobile is the best behavioral measurement
tool that’s ever come to pass in our lives and
commercially,” said Michael Becker, co-founder
and managing partner of mCordis. “We can now
use mobile to monitor and measure somebody’s
activity, somebody’s location. We can then
correlate my search behavior with my actual
location and physical behavior, and then use that
to inform all forms of marketing and advertising.
We can now start using mobility as a data
intelligence tool to then inform our marketing and
advertising.”
Geofencing, which allows marketers to send
personalized messages to consumers based on
the location of their mobile device, is especially
useful. Marketers can run relevant ads to
consumers who happen to be near a particular
store or engaged in a specific context.
“70 percent of all mobile searches on a mobile
device are acted upon within an hour whereas
on desktop, only 30 percent are acted upon
within an hour,” said Jamie Turner, CEO and
founder of 60 Second Communications. “What
that tells us is that when somebody does a
search, a Google search or Bing search on their
smartphone, they are ready to buy and so they
act on that search within an hour. So running
“Mobile is the best behavioral measurement
tool that’s ever come to pass in our lives and
commercially.”-Michael Becker, Co-founder & Managing Partner of mCordis
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2 Deloitte. 2012. The Dawn of Mobile Influence: Discovering the value of mobile in Retail. Retrieved from hhttp://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-retail-mobile-influence-factor-062712.pdf.
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ads to people who are within five miles of my
retail location would be effective.”
For example, Turner recently worked on a
campaign with a global hotel chain to boost
online reservations by placing mobile ads to
consumers when they visited car rental stations.
“What we know for this hotel chain is that their
number one customers are going to be people
who are business travelers,” Turner said. “We are
going to just target people who are at car rental
counters, near airports during Monday through
Friday because we know that they would be
business travelers. The ad would say, ‘Hey, let’s
go ahead and click on this ad and book a hotel
room now.’”
Turner adds, “It was a highly targeted, very
sophisticated campaign that was able to just
talk to people who are in our target market in a
“70 percent of all mobile searches on a mobile device are acted upon within an hour whereas on desktop, only 30 percent are acted upon within an hour.”-Jamie Turner, CEO & Founder of 60 Second Communications
very specific way as opposed to the approach
of just doing a ‘let us just run ads that go out to
everybody,’” he said. “It’s a great way to show
how mobile can be used to target people and
take their purchase behaviors into consideration
as well as their location and context.”
4Info, a mobile ad platform provider, offers
another example of a successful mobile campaign
they developed for a national drug store chain.
The campaign sought to increase in-store sales
for convenience items. First, the campaign
would use analytics to identify consumers near
a particular store location based on their recent
purchase behavior. The campaign would then
send a contextualized ad to a consumer’s
smartphone or tablet promoting six various snack
products rotating on a display carousel. The
carousel would list the sale price of each item.
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“You’re catching people who are known buyers
of convenience store products, and you’re
trying to redirect them to look to this specific
retailer as another option to get those items,”
said Chuck Moxley, chief marketing officer for
4Info. “Showing them [consumers] products
that they’re likely going to be interested in,
especially if they’re hungry, and telling them
you’re close by, that’s beautiful in terms of
the right audience, relevance and context all
coming together.”
Retailers can also deliver highly customized
ads to mobile devices based on the consumer’s
purchase histories.
“The basic approach would be ‘we know you
buy Coke so we’re going to send you an ad
to get you to buy more Coke,’” Turner said. “A
more sophisticated approach would be ‘we
know that the last time you were in Kroger, you
bought Folger’s coffee. We also know that it
takes about a week for somebody to go through
batch of coffee so we’re going to send you an ad
right before that week is up encouraging you to
switch from Folger’s to Maxwell House because
we know you’re about to run out of coffee.’”
Many retailers run loyalty programs, in which they
offer their best customers rewards—additional
discounts, offer or perks—the more they shop at
a particular store. About 47 percent of retailers
recently surveyed by Boston Retail Partners
said loyalty programs were a top priority—given
retaining customers costs about five to 10 times
less than acquiring new ones.
For example, Starbucks has launched a holiday
mobile campaign that encourages consumers
to register their gift cards with the My Starbucks
Reward program. After clicking on the mobile ad,
consumers can then instantly start redeeming
rewards and offers by entering the information
from the gift card straight to the brand’s iPhone,
iPad or Android app.
“You’re catching people who are known buyers of convenience
store products, and you’re trying to redirect them to look to this
specific retailer as another option to get those items.”
-Chuck Moxley, Chief Marketing Officer for 4Info
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“The ability to identify the customer as they enter the store – via their smartphone ideally – allows the retailer to personalize the customer shopping experience in real time.”-Boston Retail Partners
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Retailers with loyalty programs are already
sitting on vast pile of consumer data they can
use to drive additional sales by targeting mobile
devices with relevant content as they enter a
store.
“One of the best ways to identify customers and
collect customer information is through a loyalty
program,” according to Boston Retail Partners.
“Loyalty programs are a great way to encourage
customers to opt-in as they enter the store, by
providing loyalty information such as point
balances, rewards or personalized offers easily
accessible from smartphones.”
“The ability to identify the customer as they
enter the store – via their smartphone ideally –
allows the retailer to personalize the customer
shopping experience in real-time,” Boston Retail
Partners said.
Many consumers leave items in their online
checkout baskets without completing the
transaction. So when someone enters a Sephora
store, for example, the retailer will send special
offers to the consumer’s mobile device based
on their purchase history. In turn, the offer can
only be redeemed if the consumer buys the
remaining items in their online checkout basket
in-store.
Even still, adds Moxley, most retailers have yet
to embrace mobile ads. Retailers are either
intimidated by the technology or are not sure how
to measure the success of their campaigns. This
poses a unique problem for the industry given
the amount of consumer data retailers have
at their fingertips.s Essentially, the successful
adoption of mobile ads in retail depends upon
just how well retailers, despite the newness of
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wigged-out on mobile,” Moxley said. “They
think: ‘It’s such a personal device and I have to
think of it differently.’ In the end, advertising is
advertising. You want to use the same principles
they would use for all their other media and
apply it to mobile.”
Sure, mobile devices can reveal location but
retailers must recognize context. “If you sell
electronics, like a new flat panel TV, consumers
are probably doing a ton of research on their
mobile device,” Moxley said. “They may be sitting
at home in the evening, reading consumer’s
ratings and reviews, and checking different
retailers on prices. That would be a great time to
reach each of them with content that focuses on
information and education. Meanwhile, they’re
out near a store, you might want to reach them
with a different message to get them into the
store. Reach them wherever they are, but use
their location for context and relevance.”
mobile, apply the same marketing principles
to mobile as they would for other marketing
channels. To do so, retailers must keep three
concepts in mind:
Consumers are increasingly using multiple
mobile devices to research products online
only to then conduct their purchases in-store.
According to Deloitte, once a consumer uses
a device within a store, they consistently use
their smartphone or tablet for a particular
category more than 50 percent of their trips to
that category. Moreover, smartphone users are
14 percent more likely than non-device users to
buy something at the store.
The technology may be new but the goal is
still the same as radio, television and print ads:
to influence people wherever they consume
media. “For some reason a lot of people get
1. Mobile is the future
2. Mobile ads are still ads
3. Context is king
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Consumers are increasingly using smartphones
and tablets to research and make purchases
both in-store and online. This presents a perfect
opportunity for retailers to track, measure and
influence consumer buying behavior. The ability
to determine the location of a person’s mobile
device through geofencing combined with
data analytics offers retailers the chance to
deliver highly relevant ads that not only improve
the shopping experience but also enable a
personalized, more contextualized customer
journey.
Conclusion
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