Retail TouchPoints - Your Source For The Latest Retail News And Trends http://www.retailtouchpoints.com Wed, 28 Sep 2016 16:48:28 +0000 RTP en-gb 87% Of Shoppers More Likely To Buy On Associate Recommendation http://www.retailtouchpoints.com/features/news-briefs/87-of-shoppers-more-likely-to-buy-on-associate-recommendation http://www.retailtouchpoints.com/features/news-briefs/87-of-shoppers-more-likely-to-buy-on-associate-recommendation 87% Of Shoppers More Likely To Buy On Associate Recommendation

0astore associateAlthough e-Commerce continues to grow as a retail channel, more than half (58%) of shoppers say online shopping lacks the level of service offered in stores, particularly recommendations and guidance from associates, according to a study from Salesfloor.

The ability to make this store experience valuable for the consumer still relies greatly on the store associate: when visiting retail store locations, 84% of shoppers seek out help or recommendations from sales associates.

Not only does the presence of sales associates have an impact on customer relationships and the perception of retailers, but it also drives incremental sales for retailers:

  • 87% of shoppers are more likely to buy an item recommended from a sales associate;

  • 77% are more likely to make a purchase from a sales associate who has helped them before; and

  • 73% say sales associates who remember their personal preferences/style impact how much they buy from a retailer.

{loadposition GIAA}Simply put, when shoppers go online to shop, they don’t always have the extra information or guidance that may help them choose a product to buy. More than half (53%) of shoppers want the option to shop online with a sales associate, with 58% saying it would be helpful to see their recommendations and insights online.

“The role of retail sales associates has remained relatively stagnant over the years, despite new technology and tools created to revive the retail industry overall,” said Oscar Sachs, CEO and Co-Founder of Salesfloor. “Now is the time for retailers to help their store associates become ‘omnichannel associates,’ so they are empowered to sell online, market directly to local online shoppers and provide personalized online services. This is truly how retailers can leverage store associates to their full advantage.”

Shoppers also are more willing to share personal information or receive communication from individual sales associates. For example, 62% of shoppers would rather receive personalized marketing emails from an individual associate as opposed to the retailer’s national marketing newsletter. Additionally, 60% of shoppers are more likely to share their email address and personal information with retailers if they know the communication is used by an individual associate.

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feed@retailtouchpoints.com (Glenn Taylor) News Briefs Wed, 28 Sep 2016 06:04:39 +0000
Crunch Shifts Retail Operations To The Cloud http://www.retailtouchpoints.com/features/news-briefs/crunch-shifts-retail-operations-to-the-cloud http://www.retailtouchpoints.com/features/news-briefs/crunch-shifts-retail-operations-to-the-cloud

1crunchFitness gym chain Crunch has selected Cegid, a cloud services and software provider, to support its retail technology transformation. Crunch has upgraded to Cegid’s SaaS retail software (Yourcegid Y2) in an effort to centralize its operations and accelerate time to value with less risk.

The company will be leveraging Cegid products such as CRM, Price Management, Inventory Management, Purchasing, POS, Payment Integration and Advanced Reporting. Through Cegid, Crunch will have the ability to focus on strategic business initiatives without the need to install and manage servers.

The company also said it anticipates improved inventory management and a better in-store experience by leveraging Cegid.

“The deployment of Yourcegid Retail Y2 helps us strengthen our position in this increasingly competitive market,” said Mike Neff, VP of Member Services at Crunch, in a statement. “Cegid’s integrated capabilities and cloud-based delivery provide us with the flexibility and opportunity to expand ourselves so that we ensure Europay, Mastercard and Visa (EMV) compliance across all of our locations.” 

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feed@retailtouchpoints.com (Klaudia Tirico) News Briefs Wed, 28 Sep 2016 09:40:12 +0000
Lowe’s Mexico To Enhance CX With Price Optimization Solutions http://www.retailtouchpoints.com/features/news-briefs/lowe-s-mexico-to-enhance-cx-with-price-optimization-solutions http://www.retailtouchpoints.com/features/news-briefs/lowe-s-mexico-to-enhance-cx-with-price-optimization-solutions

1lowes2Lowe’s Mexico has partnered with Upstream Commerce, a provider of cloud-based, automated competitive pricing and product analytics solutions for e-Tailers, to deploy competitive pricing and assortment tools to the retailer’s home improvement products.

The retailer chose Upstream Commerce for its forward-thinking, global competitive intelligence solutions, according to Luis Eduardo Herrera, Lowe’s Mexico Shopping Experience Director. Lowe’s Mexico is continuing to focus on enhancing its omnichannel customer experiences, revenues and margin, according to the company.

"As we increase our footprint in South America, we look forward to helping Lowe's Mexico maintain this leadership position through using the best, most competitive intelligence and optimization tools on the market," said Amos Peleg, Co-Founder and CEO of Upstream Commerce, in a statement.

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feed@retailtouchpoints.com (Klaudia Tirico) News Briefs Tue, 27 Sep 2016 17:13:24 +0000
Pinterest: The Not-So-Social Network That Generates Big Benefits http://www.retailtouchpoints.com/features/editors-perspective/pinterest-the-not-so-social-network-that-generates-big-benefits http://www.retailtouchpoints.com/features/editors-perspective/pinterest-the-not-so-social-network-that-generates-big-benefits Pinterest: The Not-So-Social Network That Generates Big Benefits

1klaudiaPinterest Founder and CEO Ben Silbermann often protests that Pinterest is not a social media platform. Instead, it’s a “catalog of ideas.”

“When we talk to people about Pinterest we often describe it as not a social network,” Silbermann told The Guardian. “Social networks are about communicating with other people. Pinterest is really about planning and getting ideas for your own personal life. With social networks, it’s them time. With Pinterest, it’s me time.”

{loadposition GIAA}While I can understand why people would see Pinterest as a social network — since it allows users to like, comment and share others’ posts — I have to agree with Silbermann. Personally, I use Pinterest as a virtual inspiration board that stores ideas along with easily accessible shopping lists, rather than to “socialize” with friends and followers.  

It seems as though I am not alone. A 2015 Bizrate Insights survey showed that 70% of consumers said they use Pinterest to “get inspiration on what to buy.”

But just because Pinterest is a different type of social network than Facebook or Instagram, that doesn’t mean retailers shouldn’t be utilizing the platform in their marketing efforts. I would even argue that Pinterest could provide users with a better shopping experience and help retailers achieve a higher ROI.

In 2015, Pinterest rolled out Buyable Pins, enabling users to buy an item they see on the platform without having to leave the page. Retailers such as FlyAway BlueJay are using Buyable Pins to boost sales and reach new customers. According to the retailer, 100% of Buyable Pins sales came from brand new customers. Additionally, during the 2015 holiday season, FlyAway BlueJay found that Pinterest drove 20% of its overall sales and 28% of overall web site traffic.

But Buyable Pins are just one example of the benefits of Pinterest. For more inspiration, here are some unique Pinterest marketing tactics used by other retailers:

Showcase Your Brand’s History: Ann Taylor

0anntaylor

In August 2016, Ann Taylor created a Pinterest board to show followers images of the brand’s retro looks. In addition, Ann Taylor scattered images of new products within the retro images, so users can shop the collection based on the classics. The retailer promoted the “#Inspired By — Our Archives” Pinterest Board to its loyal customers via email, which led them to the brand’s Pinterest board.

Bring Your Pinterest Experience To Brick-And-Mortar Stores: Nordstrom

0apinnordstrom

As an early adopter of Pinterest, Nordstrom brought its most popular pins to a few brick-and-mortar stores to inspire sales associates and customers. The retailer developed an internal iPad app so salespeople could view the pins and match the items in the photos with the inventory. This allowed the sales associates to showcase trending items to customers. The strategy was so successful that Nordstrom rolled it out to 117 stores and distributed “Top Pinned” signs on merchandise such as women’s shoes and handbags.

Advertise On Pinterest With Promoted Pins: Adore Me

0adoreme

Pinterest also allows businesses to choose specific pins as a means of advertising. These Promoted Pins are then distributed throughout the most relevant areas of a user’s feed. Adore Me, a monthly subscription service for lingerie, realized a lot of organic growth on Pinterest, which led them to use Promoted Pins. With help from advertising platform 4C, Adore Me was able to increase their Pinterest revenue by a whopping 4000%. Additionally, the brand realized a 50% higher click-to-purchase rate with Promoted Pins compared to other channels.

Ready to take on Pinterest like a pro? Here are some helpful tips to get you started:

Best Audience: Pinterest is known to attract females. According to Social Pilot, 71% of users are female, while 29% of users are male. Just over one-third of Pinterest users are between the ages of 18 and 29, while the majority of daily active pinners are under 40.

Best Times To Post: According to research from Hubspot, the most active time on Pinterest is the evening.

The best times to post on Pinterest are:

• 2 a.m. to 4 a.m. and evening hours every day; 
• 5 p.m. on Fridays; and 
• 8 p.m. to 11 p.m. on Saturdays.

Best Content: According to Pinterest, pins that are captioned with advice, instructions or how-to’s are up to 30% more engaging than others. The platform also states that high-resolution, well-lit photographs and images work best, but be careful with branding — pinners will get turned off by your image if it looks too much like an ad.

There are endless ways to promote your brand on Pinterest. The platform encourages creativity in the best way, so by not utilizing it to engage with users, retailers could be missing out on new customers and more sales.

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feed@retailtouchpoints.com (Klaudia Tirico) Editor's Perspective Tue, 27 Sep 2016 15:51:47 +0000
Lessons Learned From The Hanjin Shipping Bankruptcy http://www.retailtouchpoints.com/features/trend-watch/lessons-learned-from-the-hanjin-shipping-bankruptcy http://www.retailtouchpoints.com/features/trend-watch/lessons-learned-from-the-hanjin-shipping-bankruptcy Lessons Learned From The Hanjin Shipping Bankruptcy

1-Hanjin container shipAfter four weeks of tension, uncertainty and fears over missed deadlines for holiday deliveries, bankrupt and embattled South Korean shipping giant Hanjin Shipping Co. has unloaded more than $14 billion worth of cargo from containers around the world. And with that, the retail industry has managed to breathe a small sigh of relief. 

Despite earlier holiday optimism, 2016 has been decidedly grim for some retailers; with sales numbers declining and in-store traffic reaching record lows, the prospect of having merchandise shortages during peak selling season was too much for struggling retailers to even think about.

According to Fortune, 28 of Hanjin’s 97 stranded vessels have been unloaded, while the South Korean government negotiates with port authorities in New York, Singapore and Mexico on more potential cargo unloadings. But 34 Hanjin ships remain stuck at sea, and another 35 vessels are headed back to South Korea —and it is unclear whether those ships are still carrying their cargo. So what do we know?

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Be Prepared For Disruption

If retail ever needed an example of the importance of supply chain continuity and its potential for disruption, the Hanjin Shipping bankruptcy may be the watershed event. Perhaps even more frightening than the bankruptcy itself is the underlying problem of supply chain market prices and what the future holds.

“Retailers have learned that the full-steam ahead capacity overbuild by the carriers over the last decade, and cut-throat price competition that has come with it, has created systemic risk,” said Michael Zimmerman, Partner at A.T. Kearney Procurement & Analytic Solutions, in an interview with Retail TouchPoints. “At some point the super-low rate environment cracks when one of the carriers can no longer sustain itself at market prices. Rates on lanes formerly covered by Hanjin have spiked but they are expected to settle in the coming weeks as the remaining overcapacity forces rates back down. Retailers can expect that the pattern will repeat itself.”

Take Control Of Your Supply Chain

As holiday decorations begin to go up in stores around the country, some retailers may not be able to keep up with shopper demand, forcing them to drive prices up. Those that have an adaptable supply chain will thrive and have success with their first mile. But for those who relied on Hanjin, the only thing guaranteed for the holidays at this point is uncertainty. If Hanjin is the flashpoint for supply chain disruption, how can retailers be prepared for future events? Following are some key learnings to be applied:

Optimize and automate fulfillment methods. Retailers that can leverage real-time data to predict supply chain disruptions and react accordingly will put themselves in a better position. This is key to ensuring a streamlined supply chain regardless of external circumstances. They should have reliable technology in place that can match supply to demand across their network quickly for responsive planning and analysis to serve and retain their higher-valued customers. 

Maximize each location’s capacity. Those retailers that can ship from any store are positioned to weather a supply chain shortage or emergency. By having supplies on store shelves rather than in warehouses or shipping containers, retailers have more merchandise within reach and can avoid incurring additional costs. Plus, shoppers can still purchase items through multiple channels and retailers can give products more visibility and improve conversion rates.

Outline risk mitigation strategies. Natural disasters are nearly impossible to predict, but retailers should maintain a robust network of suppliers, distributors and transportation methods so products can be re-routed and, if necessary, alternatively sourced when standard processes are compromised. 

And for retailers looking to shore up their supply chain strategies, Zimmerman had a message of caution: 

“Retailers have to protect themselves from the dual threat of the more aggressively priced but financially fragile carriers going bankrupt and the larger and financially strong ones raising rates on the argument of their financial stability,” he explained. “That means that when they source their capacity they should be looking to award region-to-region and even lane-level capacity to multiple carriers. The results should be lanes split between strategic partners with reliable capacity and more aggressive carriers who will keep the big ones honest without sinking the ship.”

Troubled Waters

Hanjin, the world’s seventh-largest shipping company by capacity, operates approximately 60 worldwide shipping lines and ships more than 100 million tons of cargo annually, although the company is actually part of an alliance of six shipping companies, further complicating its bankruptcy situation.

Hanjin’s financial troubles will force companies to seek alternate sourcing and more expensive transportation strategies, such as air freight, to ensure they have products to meet customer demand, which could well translate into higher costs for retailers.

In fact, when the news broke of Hanjin’s troubles, the price of shipping a 40-foot container from China to the U.S. jumped up to 50% in a single day according to a U.S. News Report. The price from China to West Coast ports rose from $1,100 per container to as much as $1,700 while the cost from China to the East Coast jumped from $1,700 to $2,400.

Associations Play Critical Role

The National Retail Federation and the Hardwood Federation led a coalition of 120 organizations representing retailers, manufacturers, agribusinesses and other sectors affected by the Hanjin Shipping bankruptcy, sending a letter to Commerce Secretary Penny Pritzker outlining specific concerns and urging her continued leadership in bringing about a resolution.

“U.S. businesses rely on predictability in their supply chains, particularly during the busiest shipping season of the year,” wrote NRF and the other coalition members. “The recent bankruptcy filing has caused widespread disruptions in freight shipments worldwide. The impact on small- and medium-sized companies could be particularly devastating if this situation is not resolved in a timely manner.”

One of the concerns detailed in the letter involved the ongoing confusion about the location of cargo, where it will be unloaded and whether a cargo owner’s goods would be seized by Hanjin’s creditors once the ships are docked. The coalition also told Secretary Pritzker that shippers are facing both higher fees assessed to pick up cargo as well as steadily increasing freight charges as they look for new transportation options.

The coalition thanked Secretary Pritzker for her outreach to the business community thus far and urged her to “continue to work with the South Korean government to bring about a swift and economically beneficial resolution that will allow cargo to move through the global supply chain and give certainty to U.S. businesses.”

 

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feed@retailtouchpoints.com (David DeZuzio) Trend Watch Tue, 27 Sep 2016 14:56:48 +0000
Optimizing The Store Experience To Build The Brand: Exclusive 2016 Survey http://www.retailtouchpoints.com/features/special-reports/optimizing-the-store-experience-to-build-the-brand-exclusive-2016-survey http://www.retailtouchpoints.com/features/special-reports/optimizing-the-store-experience-to-build-the-brand-exclusive-2016-survey Optimizing The Store Experience To Build The Brand: Exclusive 2016 Survey

How can retailers optimize stores in order to thrive in the long term? For the fourth year, Retail TouchPoints has surveyed close to 100 retail executives to identify the in-store tactics that are helping to build sustainable omnichannel brands.

Here are a few key findings:

  • This year even more retailers believe they have effective employee training and retention programs in place, up to 75% from 67% in 2015 (and 54% in 2014).
  • Retailers are continuing to work to motivate their full-time employees in different ways. While In-Person Training is still the most-used method (80% vs. 84% in 2015), Mobile Training is gaining ground (26%) and Gamification (25%) has become more popular.
  • In 2016 more than half (52%) of retailers said they are arming their store employees with mobile technology; and another 26% plan to.

Want to read the full report? Fill out the form below.


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feed@retailtouchpoints.com (Debbie Hauss) Special Reports Tue, 27 Sep 2016 00:58:48 +0000
New FreshDirect Funding Shows Potential Of Online Grocery Sector http://www.retailtouchpoints.com/features/financial-news/new-freshdirect-funding-shows-potential-of-online-grocery-sector http://www.retailtouchpoints.com/features/financial-news/new-freshdirect-funding-shows-potential-of-online-grocery-sector New FreshDirect Funding Shows Potential Of Online Grocery Sector

Online grocery delivery company FreshDirect has reeled in its greatest funding round yet: $189 million. The funding has to be a positive sign not only for FreshDirect's business but for the online grocery delivery sector a whole, as it signals the value that financial markets are placing on the business model.

With competition from big players such as AmazonFresh, Google Express, Instacart and Blue Apron lying on the horizon, as well as retailers such as Walmart and Kroger making hefty investments in curbside pickup options, FreshDirect will need all the assistance it can get if it intends to expand operations outside the Northeast. Jason Ackerman, Co-Founder and CEO of FreshDirect, revealed in a statement that the funding will:

  • Fuel expansion outside the New York and Philadelphia metropolitan areas into new markets;

  • Build new manufacturing and distribution facilities; and

  • Launch new businesses, such as its on-demand, mobile-first urban delivery business FoodKick that debuted earlier in 2016.

{loadposition GIAA}Last mile delivery has become a higher priority within retail as consumers continue to up their delivery expectations, but these processes become even more pressing when it comes to delivering fresh foods. An enhanced focus on manufacturing and distribution centers is definitely a good starting point for the funding, particularly if it brings the products closer to consumers.

The online grocery industry now takes in approximately $12 billion in revenue and is projected to grow at an annualized rate of 8.7% to $18.8 billion in 2021, according to data from IBISWorld. With that in mind, FreshDirect and other services are expanding at what appears to be a very appropriate time.

J.P. Morgan Asset Management led the investment, with returning investor W Capital and the AARP Innovation Fund contributing to the round.

As a result of this investment, Larry Unrein, Head of J.P. Morgan Asset Management’s Private Equity Group, will join FreshDirect’s board of directors, alongside managing director Ashmi Mehrotra.

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feed@retailtouchpoints.com (Glenn Taylor) Financial News Tue, 27 Sep 2016 10:28:33 +0000
Certona Raises $30 Million In Funding To Accelerate Expansion And Product Development http://www.retailtouchpoints.com/features/financial-news/certona-raises-30-million-in-funding-to-accelerate-expansion-and-product-development http://www.retailtouchpoints.com/features/financial-news/certona-raises-30-million-in-funding-to-accelerate-expansion-and-product-development

1certona2Certona, a provider of omnichannel personalization solutions, has received a $30 million growth investment and minority recapitalization led by Primus Capital. The funds will help Certona expand its market share, accelerate product development and expand services and support for existing and new clients.

Founded in 2004, Certona currently serves more than 40 billion personalized consumer experiences a month for its clients, which include Forever21, GameStop, Pier1 Imports and Toys “R” Us. Using patented machine learning and predicted algorithms, Certona crafts real-time profiles of shoppers across digital retail channels. Its personalization platform is designed to predict the next best action for shoppers within three to four clicks on the site, helping retailers craft more relevant shopping experiences.

“The digital commerce industry is experiencing rapid growth due to ever-increasing consumer demand,” said Geoffrey Hueter, Ph.D., CTO and Co-Founder of Certona, in a statement. “This funding will enable us to fuel strategic initiatives around new market opportunities, product innovations and support offerings.”

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feed@retailtouchpoints.com (Klaudia Tirico) Financial News Tue, 27 Sep 2016 10:16:56 +0000
To Empower Your Loyalty Program, Turn Members Into Brand Advocates http://www.retailtouchpoints.com/features/executive-viewpoints/to-empower-your-loyalty-program-turn-members-into-brand-advocates http://www.retailtouchpoints.com/features/executive-viewpoints/to-empower-your-loyalty-program-turn-members-into-brand-advocates To Empower Your Loyalty Program, Turn Members Into Brand Advocates

0aGeoff Wilson 352incWhen was the last time you actually felt rewarded by a retail loyalty program? When was the last time you received an email full of coupons or sales that didn’t just feel like a desperate cry for attention?

For years, retailers have shaped customer loyalty programs around punch cards and discounts. While these lightweight programs are often enough to inspire a return visit, they do very little to make a better customer experience (CX). When a sale is the only meaningful way for a customer to interact with their favorite brand, retailers make it very clear that customer loyalty is a one-way street.

{loadposition GIAA}That approach simply doesn’t cut it anymore. Consumers have broad choices, and these false attempts at loyalty relationships simply don’t deliver the community of passionate followers every brand envisions. Many retail companies have realized that CX is a critical part of building a loyal community of fans, but fail to consider the entirety of that experience. Memorable customer experiences go beyond the checkout counter and displays throughout the store — it’s an end-to-end strategy that carries through every step of the consumer lifecycle.

Missing The Loyalty Mark

Unfortunately, many retailers have moved beyond the punch card to embrace large-scale, off-the-shelf loyalty programs. While it’s a good idea in theory, investing in these platforms rarely pays off.

Expensive loyalty programs are built on the right idea, but for the wrong reasons. Plenti, the cross-brand loyalty platform, seemed like the perfect solution when it launched last year. It tied loyalty to some of my favorite brands together with some of my most common payment methods, and it gave me an interesting reward structure to choose from.

A year later, it’s hard to see how Plenti is a success. And there’s a great reason for that: it wasn’t purposefully custom-built by my favorite brand to actually reward me for my patronage. While it’s nice to rack up points, it still requires consumer spending as the only transactional way for a customer to prove their loyalty.

These platforms fail consumers because they exist outside the brand relationship, creating yet another layer between retailers and their customers. It does nothing to improve the actual service customers receive, which is aleading reason why customers will abandon a business.

Why? Because loyalty is more than spending. Loyalty is about advocacy. It’s about being excited about the brand even when they’re not wearing it, eating it or using it. There’s no pre-built loyalty program in the world that will turn a customer into a loyal advocate. Consumers are loyal to brands that return their love in tangible ways. That doesn’t mean you have to ditch the discounts or sales emails, but they should be elements of a custom loyalty strategy that is laser-focused on keeping customers happy, rather than just getting new customers in the door.

Building A Loyalty Bridge

Rather than a turnkey loyalty program, brands need to develop custom and strategic platforms that bridge gaps between the rest of their customer acquisition channels and retention initiatives. Done right, a loyalty program is a powerful owned-media channel that can support social media, email marketing and in-store sales.

Unfortunately, most brands focus heavily on revenue growth to the detriment of customer retention efforts.

Brands focus on acquisition because it’s easy to track, whereas quantifying retention revenue requires hard data like customer churn and lifetime value. An effective digital loyalty program can increase retention, while providing the data to target smarter acquisition efforts.

Reach Customers When They Need You Most

Inspiring true brand loyalty requires a different mindset. Rather than forcing people to collect points or search frantically for discount codes, we can build experiences that deliver loyalty experiences when customers want them most. Brands need to focus on delivering tailored customer experiences through engaging content, meaningful support and tech-driven, in-store interactions.

Digital gives brands invaluable insight and inroads to customers. Unfortunately, most brands use the mountains of consumer data they collect to stalk customers with ads, coupons or uninspired sales — none of which give your customers any reason to remain loyal. And customers continue to turn their backs on that model — only 47% of consumers are still willing to trade personal information for a deal, and that will only decrease.

Loyalty efforts should be built like any other marketing platform; they’re built best with your whole digital ecosystem in mind, guided by your customers. With the broad options provided by the digital marketplace, the balance of power has shifted to the consumer. An effective loyalty program must embody brand values and deliver actual value to your customers on a consistent basis.

Once you start to consider the full consumer lifecycle with your business, and decide to build an actual relationship with your consumers built on value (not revenue), you can develop a loyalty marketing strategy that no punch card will ever match.


 

Geoff Wilson is the president and founder of 352 Inc. and an evangelist for his Barely Manage to Lead philosophy, using agile teams to drive iterative growth. 352 is a digital product development agency specializing in product strategy, user experience design, custom web development and digital marketing. 352 turns ideas into successful digital products for companies like Cox Automotive, Microsoft and YouCaring.

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feed@retailtouchpoints.com (Geoff Wilson, 352 Inc.) Executive ViewPoints Tue, 27 Sep 2016 10:13:49 +0000
Going Native: How This Advertising Format Is Changing The Game http://www.retailtouchpoints.com/features/executive-viewpoints/going-native-how-this-advertising-format-is-changing-the-game http://www.retailtouchpoints.com/features/executive-viewpoints/going-native-how-this-advertising-format-is-changing-the-game Going Native: How This Advertising Format Is Changing The Game

0aAndrew Darling BlisThe retail advertising landscape is perpetually evolving, driven by the proliferation of smartphones and tablets, and the demand for access to rich content, social channels and videos on mobile devices. With 68% of Americans already owning a smartphone, optimizing ads for mobile has become an essential part of any high-achieving advertising campaign, leading more and more big-name publishers and digital-only outlets to offer brands the opportunity to place sponsored content on their platforms.

However, poor quality, interruptive and annoying adverts are driving a surge in ad blocker downloads, making it essential for advertisers to produce interesting and relevant content that will appeal to consumers.

{loadposition GIAA}An increasing number of retail advertisers are therefore turning to native advertising formats, which are bypassed by ad blocking technology, and are proven to dramatically increase consumer engagement.  While many in the industry initially viewed native as a fad, IHS recently predicted that by 2020 in-app native advertising revenue will generate almost two-thirds (63.2%) of mobile display advertising revenue, amounting to $53.4 billion in total.  As this statistic highlights, rather than being a flash in the pan, native formats will in fact play an increasingly important role in shaping the retail advertising landscape.

Back To Basics

So what is native advertising? Native is essentially a form of paid media, where the ad experience follows the natural form and function of the user experience in which it is placed. In other words, native ads match the look, feel and function of editorial content; they complement it and fit within it seamlessly, adding to the customer experience.

Get With The Programmatic

While native advertising has been around for decades, momentum has undoubtedly surged during the past year, which has been in part driven by the creation of conditions required for native ads to catch on. Early in 2015, the IAB published the OpenRTB 2.3 protocol, which established native as a separate ad object, opening up the ad format to the entire real-time bidding ecosystem. This new IAB spec created an industry-wide standard for the demand and supply sides to come together.

OpenRTB 2.4 builds on this progress, and set out a new standard that allowed native advertising to be bought and sold in real time. The protocol broke down the deliverable metadata for an in-feed ad to headline, content URL, content description, thumbnail, brand logo and brand name. In this way, it provided clear guidance for the entire industry on how native ads can be broken down into the right components and configured automatically to any unique site layout or in-app experience.

Adding Location To The Mix

Despite these advances, in order for retail brands to truly leverage native they must ensure that their messaging is engaging and relevant to the consumers they are trying to target. One key way that brands can maximize the success of native campaigns is by adding location data.

Through this approach, brands can enrich the ad experience by incorporating users’ physical context into audience targeting. The ads then complement the in-app experience and their physical location, making people more likely to read, click and engage with the content. Location-aware native advertising offers advertisers a holistic targeting approach by allowing them to target customers at the right place and time, with the right content.

Benefits For Brands, Consumers And Publishers

This in turn fuels further advantages. As the content grows more relevant, shoppers are more likely to consume and actively engage with it. This means that native ads may also benefit from the association with the publication they are hosted by, helping a brand to establish an affinity with users even if they weren’t previously aware of it. In addition, when ad content organically fits the user experience, it’s trickier to identify it and subconsciously blank it out, which can often happen with other forms of adverts, particularly on mobile displays.

Native has a host of other benefits too. For example, the majority of ads are by their very nature immune to ad-blocking software. Between 2014 and 2015, global use of ad blockers increased by 41%, bringing the total number of active monthly ad-blocker users to 198 million, making ad-blocking a serious concern for advertisers globally. Native therefore offers a simple and viable solution for how brands can navigate ad blockers to reach their target audience, while simultaneously preserving publishers’ revenues.

Ready. Native. Go

Ultimately, the best ads are based on the creation of high-quality, successful content, regardless of the origin; if a piece of content is strong enough, creative and accurate, audiences will engage with it. That said, native ads still naturally need to be clearly labeled for transparency purposes.

With the native ad industry set to quadruple in size between 2013 and 2018, a change in the way ads are consumed over the coming years has begun. In fact, with location as a strong ally, native advertising will gradually offer even more opportunities for contextual dialogue between brands and consumers. It’s up to all of us to step up and make the most of it, and provide the next level of customer experience.


 

As Global Communications Director at Blis, Andrew Darling is responsible for communications and PR activities, as well as marketing operations in APAC. Darling is a seasoned tech marketing and communications expert, and former Telecoms, Media and Technology journalist. Highly experienced in PR, content and brand communications with particular expertise in mobile and media tech, he has previously held senior and consultancy roles at TBG Digital, OpenMarket, MX Telecom and Mobile Interactive Group. Darling has more than 18 years’ experience working with and reporting on tech companies, digital agencies, media companies and Telcos all over the world. He has written for publications including The Times, FT, Marketing, New Media Age, Information Week and 3GSM World Focus.

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feed@retailtouchpoints.com (Andrew Darling, Blis) Executive ViewPoints Tue, 27 Sep 2016 10:02:35 +0000