Webinar: Brands Beginning to Find Value in Local Data
Here’s a quiz: Of the $4.4 trillion spent in the United States on retail items, what percentage do you think is spent in-store? If you guessed 95 percent, you’d be right. In other words, $4.2 trillion is spent offline. This figure, of course, represents a huge opportunity for local vendors.
A Street Fight webinar Thursday called “Measuring the Real World, Local’s Coming Data Revolution,” focused on ways to use new data collection and analysis methods to gain a slice of this revenue.
“The Internet is really re-inventing the way we buy and sell things locally,” said Steven Jacobs, Street Fight’s Deputy Editor during the presentation. “Whether that’s in the way we hail a cab or the way a brick-and-mortar retailer gets folks to come into the store, the web is playing an increasingly important role in shaping this so-called offline, or local, behavior.”
The trend will only speed up. The number of connected devices will jump from nine billion today to 50 billion in 2020, according to Cisco. And getting to the consumer is all about the smartphone. People already use their phones for just about everything. Seventy-four percent of people say they use a smartphone to find a store while 66 percent compare prices on their devices.
This means that consumers are more likely to pick and choose the best option for them, regardless of the brand selling it. The old purchase funnel mode no longer applies. Consumers are actually expanding the number of brands they consider before purchasing because they have better, simpler access to information.
“In the state of perfect information, the brand is no longer the best solution to the local information problem,” Jacobs says. “It’s the web, and particularly our mobile devices.”
Put another way: “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,” according to a quote Jacobs cites from Stanford professor Itamar Simonson. “Certain functions of marketing will continue, but overall, in the long run, we will be looking at decreased expenditures on marketing.”
The nearly-always-there-ness of a smartphone or another type of connected device means that our experience with said device reflects real-life behavior. It’s all about context and understanding the context. “If we can understand a person’s location and what’s going on around them, we have a much better view as to who they are and how we might be able to communicate with them,” Brett Leary, VP/Group Director of Digitas Lbi, said.
While in the past it has been difficult to deliver contextually relevant moments, that is changing. Mobile means life is targetable, location is relevant, and brands can better understand the journey of a customer. “Mobile is able to transcend time and space,” Leary said. “Life is really context, and it reflects real-life behavior. We can start to connect the dots.”
But how to take advantage of the new ecosystem and information sources?`
David Shim, CEO of Placed, has an answer. It’s all about following the paths consumers take to products, both across brands and in different markets. One method his company uses is to track affinity, both of national brand against national brand and of specific national brands in different locations.
The goal is to help with geo-targeting campaigns. Instead of geo-targeting around a specific store location, marketers could geo-target other places where their consumers are likely to shop. For example, while national JC Penney shoppers in show a strong affinity for Sephora, in New York City, the number one affinity is with Apple. In that light, it might make sense for JC Penney to geo-fence near the Apple store locations in Manhattan.
Shim showed another slide that demonstrated where J.C. Penney’s customers were most likely to go compared to the overall population. By identifying those areas and using geo-targeting, brands can draw more people into their stores. “There is a significant opportunity to reach this audience when they are out and about in the physical world, when they are shopping, before they have decided to go to a retailer like J.C. Penney,” he says.
Noah Davis is a senior editor at Street Fight.