How Data is Transforming the Local Purchase Funnel
Imagine a world of perfect local information. A world in which brick-and-mortar business can find and identify every potential consumer nearby, and shoppers can search, compare and browse the wares of their local sellers in an instant.
More and more, that world is becoming a reality.
With nearly 9 billion devices connecting to the web today, the malls and main streets where consumers still spend 90% of their expendable income are on the verge of their own data revolution. A world of connected devices — from smartphones and tablets to wi-fi routers and bluetooth beacons — are measuring the comings and goings of buyers and sellers locally, creating a new dataset that businesses, consumers and technology companies can use to create a better, more efficient local marketplace. (A webinar Thursday will explore this topic in depth. Click here to register.)
For years, the local marketplace largely missed out on a data revolution that has transformed commerce on the web. But the rapid adoption of the smartphone is quickly bringing the local shopping experience to parity with e-commerce, transforming the consumer journey and dramatically improving the targeting capabilities available to marketers today.
Exploring a new local consumer journey
Consider the impact, which imperfect information has on the way we shop. For decades, we stayed at a Hilton over a small, but exceptional, boutique hotel because we knew what to expect with the chain. Or we drove 30 minutes to a Home Depot to find a particular tool instead of shopping at an independent hardware store because we knew it would be in stock.
That lack of information — the inability for a consumer to know what was around the corner — shaped the way marketers and businesses thought of the traditional purchase funnel, pushing many to invest heavily in branding campaigns aimed exclusively at generating awareness and familiarity with a given brand. In a world in which information is finite and often inaccessible, the ability for a business to be top of mind — to carve out a little spot in a consumer’s memory — was a powerful competitive advantage, and one that drove the way businesses sold goods and services to local consumers.
“The ability for consumers to access near perfect information means that traditional assets like brand name, loyalty, price and number of other proxies consumers use to establish quality, are becoming less important,” Itamar Simonson, Stanford professor and co-author of “Absolute Value” told Street Fight in an interview last month. “Certain functions of marketing will continue, but overall, in the long run, we will be looking at decreased expenditures on marketing.”
The shift presents a distinct challenge for retailers and consumer packaged goods (CPG) brands, which still sell the bulk of their goods in brick-and-mortar locations. As consumers gain access to better tools, marketers will be forced to rethink the awareness-driven T.V. advertising campaigns in which brand marketers have traditionally invested the largest portion of their spending.
But a more digital consumer also means that marketers will have access to dearth of information about consumer behavior in the real world, which never existed before. A number of companies are working to structure and analyze the so-called offline data, mining everything from search and discovery information to passive location data in smartphones to point-of-sale and payment systems in-store.
In a webinar on Thursday, Street Fight will take a deep dive into the world of local information, speaking with Anas Ghazi of WPP and David Shim of Placed about the challenges and opportunities facing brands to compete in a changing local marketing landscape.