jgordon-lmr-blog

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Untapped $5 Trillion Dollar Opportunity: “Localized Branding”

What if established “Brands” could directly promote their “in-store” products to high-buy-intent nearby shoppers the moment they are ready to buy? In a Lastmile Retail digital world they can!

Today’s Cooperative Model

For brands like yours that sell “in-store” via partner retailers, advertising locally available products has long been an important way to drive sales. However, directly creating and managing localized advertisements for every place and or location a brand may sell through is logistically impossible.

As a result, many brands adopted a co-operative (“co-op”) model in which the brands spend hundreds of billions in co-op dollars to directly fund or reimburse their end retailers for locally advertising their products.

Large retailers negotiate co-cop dollars from brands     and use that money to fund advertising

Small retailers earn a co-op allotment that     qualifies them for reimbursement on qualifying ads

So, What’s the Problem?

In theory, the co-op model sounds like the perfect solution. However, in reality, it poses numerous problems for both brands and retailers.

Control: Brands have very little control over ad     quality and limited insight on how effectively co-op funding is being     utilized

Consistency: Because each retailer is creating their own ads and     landing pages, the performance, brand integrity and messaging can wildly vary

Measurement: it is difficult and expensive to aggregate data     across retailers and nearly impossible to apply central optimizations

·         Administrative overhead: as high as 33% of spend and with high levels of misuse and fraud

 Even if brands do have strict requirements around quality and reporting, they can quickly become burdensome. As much as 40% of co-op funds go unused, locking up funds that could have gone to something else.

What about Digital?

Although in theory digital mediums should make it possible to automate and streamline some of these issues, in reality the problems become even more acute. Despite a massive consumer shift to digital, many retailers still simply aren’t equipped to effectively digitally advertise at the local level.

Although 80% of shoppers search online before buying     in-store, only around 1/3 of retailers put inventory on their websites

While 90% of retail sales occur in stores, many retailers     only have a basic store finder and don’t run any localized digital     advertising

Despite a 5x growth in “buy near me” searches the last 2 years, SEO     and PPC spending is almost entirely focused on e-commerce

As a result, many retailers simply can’t effectively deploy local co-op dollars digitally, leaving brands totally invisible when online shoppers look for nearby places to buy their products.

  The Untapped Opportunity

With new digital advances, brands have a golden opportunity to cut out the middle man and reach the local customer directly. How?

Instead of relying on their end retailers, brands can stand up their own digital infrastructure and use it to directly market to local shoppers looking for products sold in store. As a result, local ad targeting, content delivery, tracking, reporting and optimization can be streamlined and bundled into a single brand-managed system. This is accomplished by adding several key local assets to the brand’s digital presence:

Local Microsites:

Combine branded content with local business information for each store and location where the brand is sold to give shoppers a localized experience through which they can browse all of a brand’s products carried in a given store.

Enable ads to be localized to a specific product and     store

Give the customer the tools needed to buy the     brand’s products nearby, but also serve as destinations

Local Search Presence:

Allows the brand to rank in organic results for     local searches quickly (within weeks)

Enhance existing store locators and find nearby     tools to include local product stock

Local Tracking and Reporting:

Measure how shoppers are engaging with the brand in each     region and location

Unlocks ad optimization, but also helps answer     other critical business questions such as what lines, products and     promotions are most effective in each region, and how specific content and     campaigns work differently across regions

New Technology = New funding Models

Arguably the best part about the new co-op model is the new way funds can be deployed. Since the brand can now directly implement co-op ads on behalf of the retailer, new deployment options are available. Brands can choose to keep the existing reimbursement system, but then deploy unused funds after a designated amount of time. They can allocate some of the money to direct digital ads & keep some in existing co-op programs or spend all the money on localized ads.

The End Result

With their own local web infrastructure, local ad targeting, content delivery, tracking, reporting and optimization can be streamlined and bundled into a single brand-managed system that covers every store they sell into. Instead of dozens or hundreds of retailers independently running and managing localized ads (or not running anything at all), the brand gets

Better control, consistency and cover

Better actionable local insights

High return on ad spend (up to 5X ROI)

Lastmile’s Local Motive™ platform (www.lastmileretail.com) localizes your existing website without disrupting your existing site or SEO. Our scalable architecture allows integration to be done in weeks for any number of products and locations. Go live in as little as 4 weeks.

 For further information  on how to leverage the power of “near me” for your business localized marketing please contact James Gordon, EVP @ james@lastmileretail.com .

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Untapped $1.53 Trillion Dollar Retail Pot of Gold: BOPIS, Buy Online Pickup in Store

Of the $5 trillion dollars of total U.S. retail sales in 2017, 30% or $1.53 trillion of those purchases occurred via “BOPIS, Buy Online Pickup in Store” transactions.  Most retailers and brands will agree that $1.53 trillion per year is quite an alluring  revenue opportunity.

 However, with massive retailer investment in e-commerce, mobile shopping apps, and voice activated shopping technology over the last five-years, a vast majority of those American retail brain trust have missed the “BOPIS” target profoundly. How exactly did that happen? The answer is really quite simple and is best explained as follows:

 ·         Shopper demands, and subsequent behavior have changed - they have matured, while most retailers have not nimbly shifted to accommodate shopper transitions

 ·         Most retailers and brands suffer from a form of  nearsightedness in their steadfast hope that their substantial investment in strict e-commerce capabilities will pay-off, hoping to recoup losses & save their own executive-level butts. This effort is futile.

 Is anyone getting it right?

While it is true that most retailers have “missed the mark” a few in-the-know, and forward-thinking retail behemoths have not, and they are crushing their competitors, prospering in major ways - gaining significant market share and sales revenue, and are acting to further extend that edge. They got-there-first & are relentless in the pursuit of domination.

 Walmart for example, offers “customer discounts” for in-store pickup at all of their current  

6,363 U.S. located stores. Walmart has also recently completed a successful inside store “Pickup Tower” pilot program and is now expanding that service on a U.S wide basis. In addition, they have begun a 24/7 available self-service “grocery pickup kiosk” pilot program. Early data indicates that the kiosk pilot program has been widely accepted, utilized by their growing customer base and Walmart profitable. Conjointly, their early investment in localized shopping search capabilities such as “near me” propositioned them to fully exploit the trending phenomena of “BOPIS” consumerism.

 Amazon with their June 2017 $13.7  billion cash acquisition of Whole Foods now offers “free shipping” to customers who are willing to pick up their packages at the nearest  of the 470 Whole Foods Market locations. Initial data suggest that shoppers will also shop and buy grocery products at Whole Foods while they’re claiming their cardboard package of e-commerce books and electronics. This innovative approach is a compliment to their  proven “Order online, pick up today” service, where the company delivers parcels to a centralized bank of lockers instead of covering last-mile routes to consumers’ front doors.

 Another successful location-based undertaking, “Amazon Go”, the mobile “BOPIS” based automated-cashless pilot program launched by Amazon in 2018, with five locations is expected to expand that number to 3,000 by 2021 further extending their retail footprint.

 They both get it; they understand as do we at Lastmile that high-intent local buyers are the holy grail of target marketing and optimal corporate profitability. But, why is that - why does “BOPIS” work so well? What do you need to know to be state-of-retail competitive?

The Top Three Reasons for BOPIS Domination: - Understanding the Shopper:

Although subtle difference occurs based upon demographics such as age, gender, and geographic living location occur the following nation-wide shopper survey presents a realistic spot-on measure of shopper mentality-behavior supporting the value of “BOPIS”.

 ·         48% Product Interaction: is largely touted as the most important factor in driving shoppers into stores. Studies tell us that humans are intrinsically tactile - we like to touch and feel, it’s fun – that we are “emotionally reached” by such actions. We agree, but our analysis uncovers a more practical reason for product interaction;

  we want to be sure that the product lives up to our expectations as in “caveat emptor”, buyer beware - giving the shopper an excuse to buy.

 This product reinforcement has a secondary rationale, the desire to avoid the common hassles of  e-commerce products returns, which average 35% for online purchases. 85% of shoppers surveyed selected “returns” as their primary concern.

 ·         38% Instant Gratification:  this human factor element takes several forms with the most prominent being the convenience and timeliness of “nearby shopping”: “I ‘want it now, I want in in-stock and nearby, I don’t want to wait, and I don’t want to deal with shipping costs and associated hassles of returns”. “Near me” shopping has grown 34x since 2011 with a remarkable 200% growth in the last two-years. In addition, 46% of all Google searches are local – and that trend is expected to reach 60% by 2020. Facebook and Amazon report a similar local-search rate across all demographics and product lines and report that yearly increases are trending.

 ·         14% Sales Staff Support: shoppers also seek a logical connection providing a reason  to buy when buying products. The ability to discuss such important product issues in an in-store or online via a pre-sales chat feature as: specifications, warranties and accessory items with a learned in-store sales person provides that connection, giving the shopper an empowerment of confidence, and a solid reason to buy. These support conversations further promote trust and loyalty, for upsells, and future success regarding product support and sales activities.

 The Hidden Value of BOPIS

·         Upsell opportunities:  40% of in-store buyers will purchase additional items

·         The average in-store purchase value  is 22% higher than on-line buys

·         Loyalty and Referral Programs signup increase by 11%

·         Returns Minimization: enhancing store net profitability by 10%

·         Enhanced Inventory Control with POS, Point of Sale systems

 Getting Started with a Simple Test Campaign

If you aren’t sure how effective your “local search” BOPIS efforts will be, the fastest easiest way to validate the power of “BOPIS enriched local search” is with a simple A|B test. Select two (or more) similar markets in order to track sales volume. By holding a similar market as a constant (i.e. not changing anything you’re already doing now), you can see the direct impact a larger focus on “BOPIS 1enriched local search” delivers to your bottom-line.

 Armed with the data and a proven successful track record, you can begin to develop new approaches and “local market BOPIS” models that support your desired growth. This allows you to have more control and influence over the “last mile” of the customer purchase decisions. Because, after all, doesn’t all your marketing and advertising efforts lead up to that most critical step in the customer journey? Where and what they buy matters and “BOPIS enriched local search” gives you the power to create substantial influence in these final moments that creates brand winners and losers!

 Instead of leaving to chance what happens next, retailers have the opportunity to direct high-intent foot traffic to preferred nearby retail locations - while also measuring the direct impact of your “local search BOPIS, Buy Online Pickup in Store” investments.

  Lastmile’s Local Motive™  BOPIS enriched platform (www.lastmileretail.com) localizes your existing website without disrupting your existing site or SEO. Integrate inventory systems to prevent out of stock issues and consistently calculate the local and online sales that each channel drives. Our scalable architecture allows integration to be done in weeks for any number of products and locations. Go live in as little as 4 weeks.

 For further information  on how to leverage the power of “BOPIS” for your business localized marketing please contact James Gordon, EVP @ james@lastmileretail.com .

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Untapped $5 Trillion Dollar Opportunity: “Near Me”

Today, 87% of shoppers begin their product searches online, according to research from Salesforce and Publicis Sapient. And yet of the $5 trillion dollars of total retail sales in the US in 2017, ecommerce sales represented only 13%.

 The big mistake most brick and mortar stores make is trying to beat Amazon at its own game rather than using the very thing that Amazon so desperately wants – physical presence. There’s a good reason Amazon bought Whole Foods and is conducting all sorts of experiments in creating 3,000 cashless stores. Amazon understands that while shoppers begin their product searches online, they still prefer the convenience of transacting locally in physical stores.

 While there’s no denying that ecommerce is responsible for nearly half of the 4.4% growth that US retail experienced last year, the logical question is why are so many retailers fighting for the single digit growth numbers happening in pure play ecommerce when they could be grabbing substantially more physical in-store sales in their own backyard?

 Fully Grasping the Power of “Near Me” in Search Results

The alternative is tapping into the power of local search in a more deliberate and systematic way – something many retailers simply don’t understand. Today, it’s simply not enough to run generic paid search campaigns in an effort to generate foot traffic. A deeper understanding is needed around how today’s shoppers seamlessly use search on their mobile devices to discover and act around immediate solutions to their shopping needs.

 According to Google, in the last two years “near me” mobile searches have grown over 500%. When a shopper searches for “[Your Product] near me,” they are declaring that they are interested in purchasing the very product you sell in the most convenient location to where they are standing when they tap that search term into their mobile device. If your physical retail store isn’t showing the available item in-stock, that’s an immediate sales opportunity that was totally missed.

 Today, Content in Context is King

There’s both too much and not enough content. In the aggregate, there’s more content available than anytime in history. And yet, when a shopper is actively seeking out information with the intent to buy, there’s an insatiable demand for more to ensure the right purchase decision is made.

 Adding “near me” includes context to a shopper’s search query. The right content in the right context allows the shopper to make an immediate and an informed decision. This is what they are seeking, and they are tapping into the power of search to discover the best solution to their needs in the moment. Proper context provided as part of a search for content will produce the desired immediate sales impact.

 Taking Full Advantage of “Near Me” Contextual Search

For physical retailers who aren’t aware of the growing power of local search, the first step is to begin tracking and measuring just how much search volume is happening around the products and services that you offer. Understanding that you can’t manage what you don’t measure, this is a great place to start.

 What’s better is to launch a pilot program where you are investing in the areas where your shoppers are actively searching. Think about it. The majority of physical stores are centrally managed online with little more than a late 1990’s style store locator and possibly a dedicated page that has store hours and a map. For most shoppers that’s woefully insufficient. So much attention has been given to mobile apps, responsive design and ecommerce functionality, that not much progress has been made better leveraging the brick and mortar assets they already own.

 In the age of big data, shoppers want to be able to tap into individual store’s local deals, real-time inventory, book an appointment, call an employee, begin a sales chat, redeem a coupon, and access as much of the in-store experience as they would need in order to decide to step foot into your store.

 This is where buy online and pick-up in-store can provide a competitive advantage over Amazon Prime and next day deliveries. Simply put, by thinking through the end-to-end ideal customer journey, brick and mortar stores can provide a huge competitive advantage; one that is typically underleveraged and overlooked.

 The ROI of “Near Me” Local Search

The tech-forward, digitally astute brick and mortar stores that have taken the time to provide more relevant local data tend to capture the attention of Google’s algorithm and, as a result, move up the search rankings. While that page result upward migration can take up to 6 months to happen organically, retailers see immediate benefits along that journey, including:

 ·         3-5 Times Higher Conversion Rates

·         100% Incremental Search Traffic

·         30% Increase in Local Leads

·         300% Increase in Buy Online and Pick Up in Store

·         500% Return on Investment (within 6 months)

 Beyond all the stats is an important distinction that retailers are only beginning to understand: Significant market share is won or lost at the local level. While multi-million-dollar advertising campaigns help build brands, brick and mortar sales are won or lost at the individual store level. According to Accenture, the number one requested shopper feature is to check stock online. And 50% of mobile searches lead to a store visit within a day according to Google.

 Knowing that 87% of shoppers begin their searches online and would prefer to purchase in-store when given the opportunity, it would seem understanding how to tap into the 500% growth of “near me” search volume should be a bigger priority for brick and mortar retailers. The good news is, the first movers tend to get the biggest returns on their efforts and it’s been a relatively slow migration toward understanding and maximizing local search. If that’s something you’re looking to change we welcome the opportunity to have a deeper dive conversation.

  Lastmile’s Local Motive™ platform (www.lastmileretail.com) localizes your existing website without disrupting your existing site or SEO. Our scalable architecture allows integration to be done in weeks for any number of products and locations. Go live in as little as 4 weeks.

 For further information  on how to leverage the power of “near me” for your business localized marketing please contact James Gordon, EVP james@lastmileretail.com.