By Gil Larsen, Blis
More
than 5,000 stores closed their doors in 2017, and this year looks set to
surpass it with 1,500 more closures already. And while the mom-and-pop stores
are certainly suffering, the bigger names are not escaping unscathed — Macy’s,
JCPenney, Sears and Kmart have all announced significant shuttering. The
competition from Amazon, and the wave of digitally native, direct to consumer
brands it inspired, is undoubtedly stiff, but to say the battle for shoppers’
hearts (and wallets) is lost is to oversimplify the challenge.
Firstly,
not all closures have the same symptoms. We’ve all experienced wandering into
an empty, deserted department store and thinking to ourselves, ‘This place
hasn’t got long left,’ and we’re unsurprised when it, seemingly inevitably,
joins the shuttered ranks. But then there are the others, the stores that are
always busy and buzzing with browsers. The reaction when this kind of store
closes down is much more shocking and can lead to this sense of retail doom. It
is contrary to observation and accepted wisdom that the stores that see a lot
of foot traffic are in trouble too. If they can’t make it, who can?
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The
challenge facing retail as a whole is how to identify the valuable shopper and
engage with them. A manager scanning a busy department store might be led to
think that the marketing campaigns are working perfectly by enticing the
consumers in. However, knowing the high-spender from the casual browser is
difficult to ascertain. Away from email marketing and IP addresses, the
knowledge the brand has about the individual starts to dissipate. Essentially
retailers are playing the role of guide throughout the entire path to purchase,
and losing them as they come through the door.
However,
as mobile, sensor and location continues to proliferate, there is an
opportunity for retailers to move beyond simple foot traffic or location data
collection. By cross-referencing this data against traffic patterns, regularly
visited locations, travel distances and routes, retailers can build a much more
detailed picture of their customers.
Foot
traffic patterns provide incredibly strong indicators of consumer shopping
habits (and what influences them) — but even foot traffic only tells us part of
the story. Location intelligence, combining foot traffic data with the
smartphone devices being carried means it’s possible to get a very clear
understanding of shopper demographic, timing, frequency and spend. All
importantly, retailers can get the same level of understanding about the best
ways to engage and converse with consumers that the digital marketers enjoy — a
move towards leveling the playing field between the online and offline worlds.
It also allows brands to continue the conversation with consumers even when
they move away from the desktop — enabling online and offline to better work
together.
By using location
technology, marketers are able to further break down, qualify and target
audiences so they don’t have to treat in-store shoppers as the same demographic
group. By monitoring device IDs after in-store visits and mapping them against
other frequently visited locations by the individual, it’s possible to
determine whether the smartphone belongs to a parent, a student, a Millennial or
an older shopper. We can see what they care about and their other interests,
sorting them into micro-tribes and speaking to them accordingly. For a
physical retailer trying to compete against the on-demand, online sale, this
level of insight into the wants, needs and capabilities of shoppers as you plan
advertising campaigns, sales strategies and in-store offers is invaluable.
Businesses also can use
these insights to plan or open new stores in locations that are a natural fit
for their more valuable customers. For example, H&M’s target demographic
may often browse for ideas in Topshop and Bloomingdales, but take that
inspiration into their store to find comparable products to purchase. As a
result, new H&M stores should be opened close to the ‘inspirers’ to
continue to drive traffic.
Collecting and
analyzing location intelligence and smart insights will increasingly have a
critical role to play in helping brands understand their shoppers and their
habits, to better inform commercial, marketing and operational decisions. In
today’s retail climate, the ability to partner with would-be shoppers as they
move along the path to purchase is just as much about location as it is about
the journey.
Gil Larsen Is Vice-President, Americas for Blis, responsible for driving ad sales revenue in
the U.S. He has built strategic media and marketing partnerships with leading brands
over the past 20 years. Prior to joining Blis, Larsen served as Regional Vice
President for Thinknear, a location-based mobile competitor in the U.S. Over
the course of his career, he has worked for both digital media companies such
as YuMe as well as professional sports leagues including the National
Basketball Association.