Localized marketing is no longer tech of the future for big brands.
Seattle-based Amazon found a way to convince a consumer in Boston to buy paper towels and wait two days for delivery instead of visiting a local grocery store. How does that happen?
Amazon’s challenged brick and mortar stores since its inception, even being sued by Barnes & Noble for calling themselves “the world’s biggest bookstore” when B&N claimed they were actually a book broker. That suit didn’t stop Amazon and today consumers can buy everything from clothing to home furnishings to grocery items on the site. Their success is largely in part to their innovation strategy focused on shaping customer shopping habits.
Amazon learned early on the trick to winning customers is shaping and defining their shopping and buying habits. Programs like Amazon Prime inspire customers to spend more in order to “pay off” their subscriptions. Amazon’s “Subscribe & Save” feature tells us people are less likely to purchase their favorite brands in-store if they can time and auto-ship a purchase instead.
These features work. Last year Amazon had its best holiday season, cashing in 426 items sold per second. In the week before Christmas, they gained more than one million Prime members. Previously, Alice.com pioneered services similar to “Subscribe & Save,” but filed for bankruptcy when they could not compete with Amazon’s inventory offers and lower shipping costs.
Amazon Price Check is also changing behavior by giving consumers more control over their shopping experience as they seek the best deals. In the phenomenon called “showrooming,” in-store shoppers order items from online retailers after scanning them with their smartphone.
Other online companies use similar habit-shaping strategies to achieve Amazon-like successes. Curated deals sites like Gilt offer a level of exclusivity by being “members only” and drive sales with limited-time and quantity offers. Jakthreads takes the time-sensitivity approach a step further by placing a countdown timer on users’ shopping carts to drive urgency. They also incentivize shoppers to promote their brand to new users by offering discounts.
However, while these online brands can ship items anywhere, they don’t achieve a true local presence in consumers’ lives. And consumers are local. They have houses, street addresses and cars. They enjoy online shopping, but they are still hard-wired to shop locally. In order to compete with giants like Amazon, retailers and brands must create incentives to shop in-store with better localized marketing campaigns.
But retailers and brands can shape consumer habits too and that will fundamentally change localized marketing. Imagine the following:
- Using local price and promotion assets with store location and zip code targeting to deliver hyper-local messaging to drive local store traffic
- Re-purposing national television ads by embedding local prices and inventory in order to create thousands of unique, localized video ads
- Deploying social media ads targeted within a proximity radius of 5 miles of any city highlighting local store offers
The truth is billion dollar brands can achieve local at scale right now. Instead of a generic ad that says “Tide gets stains out” you can now say “Tide gets stains out and is on sale for $5.99 three miles away.” Instead of one broad message, with the push of a button thousands of locally versioned ads can be distributed across any channel (Facebook, Google, Yahoo!) and any platform to reach local consumers before they even consider signing up for an Amazon membership.
Yesterday’s print circular can be a more dynamic digital shopping experience and sourced for more engaging digital ad units. For example, recently a grocery chain retailer tested dynamic local content to better reach their audience over a three-month period. They piloted a new online creative ad format featuring sale items dynamically loaded from their local weekly ad in each zip code.
For 1/10th the cost of print, in-store sales experienced a 9% increase from the campaign due to increased household penetration and interactive ads delivered a 17% lift in incremental sales.
A national retailer got 10x return on investment by retargeting consumers in online search. The consumer’s search and purchase history informed every subsequent advertising impression in real time so they were not over-served ads for the campaign’s targeted products. The results showed a 23% life in online conversions and a 28% conversion life in-store, with the 97% of incremental conversion in-store.
Finally, it’s about relevance: getting the right content to the right person at the right time. While Amazon might be doing their job at creating an online marketplace, local still has the advantage of proximity. When Amazon Drones become a reality, with delivery in 30 minutes or less in as early as 2015, we’ll face our next challenge.