The “Location-Based Marketing in Retail Roundup” was published by eMarketer in April. You can request a copy of it here. If you are not already a subscriber you'll have to provide some contact info.
The research in this “roundup" marks a continuation of the industry trends we’ve seen over the past couple of years and validates a lot of the forecasts we’ve been tracking as well.
THE SUPER SUMMARY
What are the major components of mobile and location-based marketing in 2017?
A Mobile-First Customer Strategy:
This goes far beyond a mobile-friendly design of websites and email. Those things must be taken for granted at this point. We are seeing a mobile majority online.
Understand the Customer’s In-Store Needs:
These can be tied to the mobile device in the form of personalization, mobile pay, order ahead, in-store pickup and location-based offers.
Relevant and Useful Public Information:
Location-based marketing in the form of current and clear public information in maps, listings, reviews, search and social can put your brand in a prominent position while the customer is researching away from your store or your people. You have to convince them you are able to address their need before you ever have an opportunity to actually address that need.
Some Early Trends to Watch:
Retailers that have ironed out their mobile customer culture are looking to new ideas and finding opportunity with beacons for store perimeter marketing. At this phase, they are still “marginally valuable to the customer.” So if the rest of the mobile marketing house is not in order, they are not a practical focus of attention.
In-store augmented reality falls into this bucket as well. The roundup describes how Bloomingdale’s invented a SnapChat treasure hunt following the Pokémon Go craze that was an unbridled success. When you’re doing so much else correctly, you are free to be brilliant. But these trends should not be an operational focus if there are more systemic issues to be addressed.
Barber Martin’s POV
The major conclusion is that physical stores are important and can be a significant competitive advantage at retail, despite what we’re seeing with struggling brick-and-mortar brands and the fading “indoor mall” location strategy. It seems logical that a variety of stores all right next to each other would simplify shopping and facilitate fairly quick comparison buying. But the physical store is totally optional for the research-shopping experience today. And relative to online research, it’s inefficient. This phase of purchase consideration has largely been extricated from the physical world.
However, people are still going to stores and prefer them across a variety of categories when it comes time to make the purchase.
This means that when customers show up at the store, they’re much more ready to convert and they’ve already made a lot of decisions, narrowing their consideration to a very limited set of options. A customer that walks in the door is a much better informed consumer and a much more intentional shopper. Sales staff is not likely to add significant value beyond a point of view to the in-store offerings and locating the items.
One survey in the eMarketer roundup said that by 2020 most shoppers will say they want to be totally left alone to do their own thing while in the store.
In-store purchasing dominates by large margins for high dollar items like cars, appliances and jewelry. The preference for in-store transaction still beats digital purchasing across all categories except books, toys and games and entertainment. This is surprising given how apparent the rise of ecommerce and mobile marketing has become.
The clear variance comes when the same questions are asked to customers segmented by age. Only those over 60 said they preferred in-store shopping. All other age groups prefer the shopping experience online, just short of buying. Only those in the youngest segment, ages 18-29, said they prefer to do the majority of their shopping online, and of that set, only those age 21-29 said they preferred shopping on a mobile device.
Keeping an eye on these industry trends over the past many years allows us to distill a few clear observations:
1. It is apparent that location is still crucial to the purchase experience across all channels – even with the most digitally inclined consumers.
2. The trends that favor new behaviors and emerging technology accelerate younger, and what younger people do today informs what older people are more likely to do tomorrow.
So if location strategy can be a significant advantage at retail and almost all of the pre-transaction homework is done on a whim across a variety of connected devices, we can safely conclude that we should no longer speak of “brick and mortar vs. ecommerce” but will more reasonably see things in terms of the reorganization and total integration of online and offline into one consumer experience.
This realization points to the rise of mobile payment and shopping lists as well as store location floor maps to allow the customer to manage the shopping experience via mobile device, preserving total customer control of the whole process.
Brands may have fewer locations or more minimized real estate, but the sales per square foot will be a leading metric and the locations must perform. We’re likely seeing the sun set on terms like “mobile customer” and “digital marketing.” It’s just customers and marketing because these things are embedded into the total experience.
If all of these elements are well designed, the purchase process matures before the customer visits the store. They may order ahead, knowing they can pick up at the counter and in turn use the time they are saving to browse or try new things in store. The store visit is now a lower funnel process with opportunity to upsell or increase cart size, only after winning the right to transact in the first place!
This means that the impulse shopping and the consideration mindset is back, but only if the store has earned it by meeting the prioritized need and supporting the easy purchase. By providing that value, the store has drawn the customer’s casual interest and increased the likelihood of a larger cart by saving or even creating time for the customer to “shop” in the more traditional sense.
By delivering a good mobile strategy for an integrated experience in store, the retailer is now driving traffic again, because more customers will come to that store for a better experience while the competition suffers and wonders why. There will always be niche exceptions, but retail brands with strong brick and mortar will have to earn consideration and capture purchase intention online to succeed.
Director of Interactive Media