Street Fight’s Predictions for 2016: Part One
With 2015 drawing to a close, it’s time again to look ahead to what we can expect in the hyperlocal space in 2016. We asked Street Fight staffers and weekly columnists what they thought would be the biggest story (or stories) in local in 2016. We’ll be running their outlooks in two installments, the first today and the second tomorrow.
This is the second in our series of predictions pieces that we’ll feature this week. Yesterday our analyst contributors weighed in on what they see as sure bets for next year, plus some things that might get big (but might not) and trends that may have been (over)hyped, but which hyperlocal marketers and merchants really don’t need to worry about in 2016. Today we’re also looking back at predictions for 2015 to see who was on target and who missed the mark. An editor’s take will follow on Thursday.
On-demand becomes the default mode for the local economy.
David Hirschman, co-founder and chief operating officer
One of the biggest stories in local in 2015 was the rise of the “on-demand economy,” where access to local goods and services increasingly were reorganized by proximity using mobile technology. Uber is, of course, the poster company for this phenomenon, but Uber-for-X companies targeted local verticals across the spectrum this year, generating leads for service providers and providing a more seamless experience for consumers.
In 2016 we’ll see this concept of on-demand become more or less standard for all companies serving local consumers. “Deep linking” relationships between apps already have become standard, and I think we’ll see location/delivery become a seamless component in organizing almost all consumer searches for products and services (aside from restaurants and some types of on-site experience-based services).
Rick Robinson, Urgent.ly co-founder and Street Fight Advisor
The most sweeping trend in local for 2016 will be the emergence of regionalized, “white label” on-demand delivery networks that will help local businesses participate in the so-called on-demand economy. From florists to food delivery, these delivery networks will canvass designated regions, getting to know the local businesses, and make margins based on volume by handling multiple services per route at a given time.
By the close of the year, at least one player also will be optimized to deliver a small business owner’s goods on the fly to customers who are not at a fixed point but on the move.
Consolidation is the inevitable consequence of rapid expansion.
Charity Huff, Tru Measure founder and general manager and “Dealmakers” columnist
2015 rang in crazy valuations and record investment in tech startups. Our industry was one of the key benefactors of venture capital money. According to the Wall Street Journal, 2015 is on pace to “beat each of the last six years in total venture dollars invested in private companies.” That trend will not continue in 2016. Rather, we’ll start to see consolidation through mergers and acquisitions as companies scramble to expand their market base and demonstrate continued growth through acquisition.
We’ve seen hints of that this year, most recently with Postmates’ acquisition of Sosh, which brought along proven talent and a natural horizontal product expansion. Local on-demand is just one area we’ll see consolidation. Email, social, and content marketing will continue to meld into marketing automation, with the big enterprise platforms expanding their offerings through acquisition. A third area of our industry to watch in 2016 is point-of-sale tech. The smartest or best funded last-mile companies made strategic acquisitions in 2015 and will need to do so again in 2016. ShopKeep acquired Ambur in September to expand its scale with restaurants. This acquisition was in addition to Payment Revolution and Refulgent.
So, ring the bell! Let the M&A games begin. As an investor and entrepreneur, I raise a New Year’s toast to the innovative, scrappy startups that will find their exit in 2016.
Hirschman: The pace of consolidation will really pick up in the local industry, with more vertical players joining ranks in the quest to offer a wider array of services and compete with the bigger players. Small businesses and brands want simple, effective solutions to their local marketing, and don’t want to interact with dozens of different vendors in order to achieve the desired result.
Old media will get conquered…by old media.
Tom Grubisich, Local America editorial director and “The New News” columnist
I’m going out on a long limb and making a prediction about one specific company: That Hearst Newspapers will buy a “legacy” chain in a mid-size market like the ones where it’s already well established. Why it could happen: Hearst Newspapers has no debt, acquisition prices would be tempting, and programmatic ad CPMs — especially for videos — are tipping nicely upward.
After years of budget slashing that hurt their editorial product, newspapers are paying more attention to high-value journalism. Based on research, marketers are convinced such content will help them find demographically desirable audiences that can be guided, via carefully crafted campaigns, to “consumer journeys” that end in purchases. Hearst has strong resources in video production, but it could use bigger audience numbers to land video-driven ad campaigns. In fact, Hearst has been actively trying to widen its total audience by partnering on national advertising with other legacy chains — Tribune Media, Gannett, McClatchy, and Advance Publications.
If that partnership doesn’t happen, Hearst, to get the audience numbers it wants, could go in another direction: acquisition of another legacy. Some of those potential ad partners, especially Gannett, are probably too big for Hearst to swallow, but there are a lot of other legacy chains that have big numbers and are getting religion about better editorial content.
2016 will be the year of the beacon.
Asif Khan, Location Based Marketing Association president and “On Location” columnist
In 2016, we will see the use case for beacons evolve as they are deployed more to blend online advertising with the brick-and-mortar mobile consumer experience. Integrating beacons at the right points along the path to purchase can make retargeting more relevant for consumers and more resource-effective for advertisers.
These little sensors will start to go mainstream in the out-of-home space as well. Beacons on billboards will pick up smartphones in proximity and adapt their content accordingly. For instance, this could mean a billboard’s content changing to match a mobile user’s search preferences.
Beyond that, beacons will allow consumers to interact with out-of-home media content. Billboards can even be gamified so consumers can interact with their content to enrich the consumer experience and drive brand engagement.
Even more exciting: Beacons and mobile will bridge the online and old brick-and-mortar consumer experiences to raise brand awareness, increase engagement, drive in-store traffic, and ultimately activate sales.
Have a prediction of your own? Let us know about it in the comments!