Ocean Fine, vice president, agency & strategic accounts, Factual
Retail is changing at lightning speed thanks to data-powered online and offline shopping experiences (think shoppable Instagram posts, pop-up shops and checkout-free stores). To discover and buy products, consumers increasingly give valuable data to more channels, from social media to mobile apps to voice devices. But while brands have access to more information about audiences than ever, many fail to leverage the right data to reach customers.
When combined with demographics, location data can yield powerful insights about who your customers are, their products of interest and other relevant factors, informing retailers about how to best reach them. Such sophisticated targeting should be a huge priority when considering that brands that create personalized experiences are seeing revenue increases of 6 to 10 percent—two to three times greater than brands that don’t. By showing the places where increasingly omnichannel-minded consumers actually visit in real life, location data bridges the online-offline gap, which is mission critical considering that brick-and-mortar sales still account for 90 percent of total sales. The Location-Based Marketing Association last year found that 50 percent of all brands are using location data to target customers, and—from what I’ve seen in the marketplace—that number would definitely be higher if the study focused on retailers alone.
At the same time, too few of the retail marketers who are using location data are employing it to accomplish much beyond driving and measuring store visits. That’s despite the fact that location can be combined with other rich data sets like purchase history, web browsing and social media engagement to drill down into nuanced segments. Not only can marketers determine if a set of customers went to a spa or a gym, they can separate yogis from kickboxers. They can ask: Did these in-market car shoppers pull into a used lot or a branded dealership? Honda or Jaguar?
With this specificity in mind, here are four cutting-edge ways retailers are employing location data.
Intelligent conquesting
Generally speaking, retailers are utilizing anonymized, mobile data that is collected with consumer consent via various apps in gaming, weather, utility, social, messaging, dating, music/video streaming and photography categories. Such data is often combined with data on millions of places (stores, restaurants, public parks, etc.) globally that not only provides intelligence for consumers’ location but also serves as predictive analysis around their demographics and interests. This kind of data can be employed for what retailers like to call “mobile conquesting.”
For instance, one of my company’s clients appeals to “DIY weekend warriors,” people who spend their Saturdays and Sundays on home improvement projects. Using location data, the retailer zeroes in on people who have visited other competitors’ locations—places like big-box stores, specialty paint shops or hardware merchants—on previous weekends.
Several of our luxury retail clients repeatedly employ location data to target people who visit a competitor and pull them into their stores. To illustrate how lucrative this practice can be for high-end players, let me hypothetically point to a non-client brand like jewelry retailer Cartier. To boost its footfall to its 120 U.S. stores, Cartier could target people who regularly visit New York rival Harry Winston or Chicago competitor Marshall Pierce & Company, poaching their patrons with a better offer. Such targeting is partly why geo-targeted ad sales will exceed $32 billion by 2021—up from around $12 billion in 2016, per researcher BIA/Kelsey.
Powering holistic marketing
One fast-food client measures campaigns primarily with footfall data for an interesting reason: about 75 percent of its in-store transactions are cash, rendering credit card data in its CRM system virtually irrelevant. This reality makes store visit data unusually powerful for understanding the impact of its holistic marketing efforts, closing a data gap—between locally targeted digital promotions and store visits—that would otherwise cause headaches for the chain’s marketers.
Brands are using location data to understand path to purchase too. The internet is king when it comes to product discovery, as 80 percent of shoppers search products online before purchasing them offline. On the other hand, consumers’ store visits inspire online purchases as often as 55 percent of the time. Whether the path begins in-store or on the web, location data can help retailers pinpoint the series of messages that actually drove the sale home and optimize search marketing.
Sophisticated media planning
One CPG client recently launched a product it knew would do well in specific locales. The company used location intelligence to plan media—not just for cross-screen digital ads via Google, Facebook and other platforms—but also for targeting local TV and outdoor signage.
At the same time, brands can employ location data more granularly. Sporting goods merchants suss out whether a consumer is a bowler, golfer, softball player, hunter, hiker, bicyclist or beachgoer. Pharmacy and supermarket brands can target urban dwellers based on whether they stop to buy household items or groceries as they walk home from the subway after work. After all, the right message at the right time will be different for that consumer compared to car-driving commuters.
Mapping out grand openings
Location data is helping merchants figure out where to open their next stores. For instance, one client wanted to identify high-value locations in major cities nationwide and make smart decisions on where to launch storefronts. The retailer zeroed in on desirable spots by capturing the density of bars, coffee shops, restaurants and other amenities in neighborhoods, and then it opened several successful outlets across the country.
Where retailers open stores can affect whether a consumer will shop online with them. For example, CGS recently stated that 74 percent of the 1,500 online shoppers it surveyed preferred returning items in-store instead of shipping them back. With that in mind, digital shoppers are more likely to pull the trigger on purchasing commonly ill-fitting items like shoes if they know there’s a nearby outlet for returns.
Location data is just getting started
All in all, marketers are gradually coming to grips with how location data can be combined with other datasets across channels to beat the competition. And if what’s going on now isn’t inspiration enough for them, location data’s next decade should be an incredible chapter.
To give but one example, connected cars will give brands a dynamic look into in-vehicle shopping habits, which may result in store visits or e-commerce purchases. Connected cars will also offer merchants actionable insights on customers’ music listening, favorite podcasts, video preferences and voice search activities.
So if your retail brand hasn’t gotten serious about location data, the time is now. Even if your team is already going in the right direction, it’s never too early to start moving even faster.
Factual provides location data to help advertisers and agencies understand consumer behavior, target audiences and measure campaign effectiveness.
Favorite