Uber Brings Back Uber Offers As ‘Visa Local Offers’

Uber has reintroduced its Uber Offers program as Visa Local Offers, allowing users to get 10 percent back on Uber rides for using the Visa card linked to their Uber account at select local merchants — a move that both deepens the tie between brick-and-mortars and on-demand providers and stands to boost foot traffic to local businesses.

The program offers clear benefits for Uber, local businesses, and Visa: Businesses boost discovery through Uber’s vast user base; Uber stands to increase rides by betting that the resulting 10 percent discount will encourage riders to choose Uber over a competitor; and Visa gets cardholders to spend more at both businesses and on Uber rides in order to unlock the promotion.

“You don’t even have to Uber to the location,” Uber said in a statement. “Just use your card around town like you usually do.”

Uber’s Visa Local Offers merchants for August include Walgreens, Denny’s, Petco, and others.

On-Demand Boosts Brick-And-Mortar

In addition to being a potential driver for local store visits, the program looks likely to appeal to brands due to the “captive audience” element: When people are on a car ride, they can’t get up and leave, and they are (most likely) looking at their smartphones. Showing them participating merchants and offers then — as Uber does — makes them more likely to be responsive, especially considering that the offer is going to translate to a discount for an app they (clearly) already use.

The main question after the reintroduction of the program might be this: Can local SMBs — who live and die by local foot traffic even more than major chains with a web presence — participate as much as the Walgreens of the world? And, if they do, will it make a significant difference in the age of competing with Amazon?

Uber didn’t respond to a request to comment at this time. But promotions of this variety remain a smart bet for retailers looking for a low-cost way to further bridge the online and offline worlds — even as the extent of the impact on physical sales remains to be seen.

In any case, as brands realize the local discovery advantages conferred by on-demand services, a great deal more of these “pay to play” offer partnerships are likely to emerge. It is also continued reminder that Uber’s transformation from an on-demand app to a full-fledged marketing platform has finally taken place — and the company will continue to invest its energy there in the future.

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Amazon Adds ‘Instant Pickup’ Points To Brick-And-Mortars

Amazon is rolling out instant pickup points on five college campuses where shoppers can collect their items immediately after ordering, Reuters reported Tuesday — a move aimed at shortening delivery wait times as well as expanding the company’s brick-and-mortar ambitions following the launch of pop-up stores and its major acquisition of grocery emporium Whole Foods.

Here’s how it works: Shoppers on the Amazon mobile app can select from several hundred pre-available items at each “kiosk” location. Then, Amazon employees in a back room load the ordered items into lockers within two minutes, and customers receive bar codes on their mobile devices in order to access them.

The initial limited rollout reportedly sees Amazon making a physical push for fast-selling items that shoppers might not ordinarily order online — like drinks or snacks — as well as a few more substantial products, like phone chargers. So, is Amazon aiming to compete with vending machines?

The Retailer Response

While the rollout might at first appear to simply put Amazon in competition with Coke machines, the long view of the impact is quite different. This isn’t about soft drinks: As Forrester analyst Ananda Chakravarty put it, “this might work for some electronic gadgets that are not commonly available at vending machines, [but] two minutes is too long to wait for a soda can.”

Instead, this indicates that Amazon has the drive — and likely, the means — to begin putting instant pickup into practice for a much wider range of products. Might real-time pickup of shoes or books be next, further threatening brick-and-mortars?

Perhaps. But the silver lining for physical retailers is that their stores already function as instant pickup points; it’s simply about integrating the technology aspect so that customers can find or purchase their products on demand.

As we wrote earlier this year, brick-and-mortar businesses are actually the backbone of delivery enterprises like Postmates, which uses the city and the city’s retailers essentially as its warehouses. These types of partnerships could be one of the keys to competing with the likes of Amazon: The physical store locations act as stockrooms, and companies like Postmates provide the immediate or near-immediate local delivery — acting as a competitor to Amazon Prime.

“In a sense, yes, what we’re allowing these retailers to do is to emulate what Amazon is doing with Prime Now,” said Holger Luedorf, former SVP of business at Postmates. “They can do the same thing because they have a great variety of goods, and the only thing they are missing is the logistics piece. And that can be solved [through] partnerships.”

Additionally, retailers like Kohl’s have seen success through embracing buy online, pick-up in-store programs to address the “instant” aspect. After all, brick-and-mortars don’t need take their time rolling out instant pickup “kiosks”; they have the stores.

For its part, Target has taken a direct step to tackle one of the primary holes in its omnichannel strategy by acquiring transportation tech company Grand Junction to promise same-day delivery to customers — a clear step to address Amazon’s moves as retail undergoes a rapid transformation.

Amazon’s next steps are unknown. But the brick-and-mortar future will almost certainly continue to rely on on-demand partnerships — both with Amazon and with other competitors — and “instant pickup” is an option that existing retailers need to embrace now.

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Think With Google: In Searches, “Near Me” Is Now Implied

The growth in searches for local places without a location qualifier (“near me,” zip code) has outpaced searches that do include “near me,” according to new research from Think With Google — a trend that indicates that location relevance is now all but assumed by consumers making voice and text searches.

“Near me” searches first spiked in 2015, and this (rightly) turned marketers’ attention to the growing importance of location in search; after all, 76 percent of location searches result in a visit to a physical location within a day. But if people are still turning to their smartphones to discover goods and services in the world around them, why drop the “near me?”

“People [now] know that the results will automatically be relevant to their location — thanks to their phone,” writes Google’s Lisa Gevelber. “It’s kind of magical.”

Here’s why: As search results have evolved pursuant to customers’ real-time, “near me” desires, they’ve become increasingly mapped to the physical world: For example, Google’s mapped “three-pack” of results appears at the top of search results. Additionally, if a consumer searches for “new car,” they don’t simply see links — they see the knowledge card, with prices, configurations, features of cars for sale, and more, all seamlessly. As we wrote earlier this year, Google now assumes people are looking for something in the physical world, which wasn’t the case several years ago.

All of this appears to have rendered the “near me” search irrelevant — even as people expect more location-specific, targeted content than ever. So, what’s a local business to do?

Data Matters More

First, this shift in search behavior underscores the importance of businesses preparing their underlying data layer: Online listings that are correct, consistent, and have all location information comprehensively integrated will rank higher in search results — and appearing at the top of results based on relevant content will be more important as zip codes and/or city names are omitted from searches.

Secondly, businesses need to continue to focus on the shift to voice: In fact, over 20 percent of searches in the Google app are now made by voice — making up a significant portion of the “implied” local searches that Google is talking about. Local brick-and-mortars need able to provide the answers that people want when they make on-the-go searches via voice.

Google Maps’ new Q&A feature may have significant influence here — and once again, this also means that the data people most often search for (hours, address, et cetera) needs to be listed accurately and be ready for consumption by “traditional” search engines and intelligent assistants alike.

And given that for every online purchase resulting from a search Google sees multi-channel retailers receive an additional 400 in-store visits, expect to see this “new frontier” for SEO matter immensely for brick-and-mortars in particular.

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How Voice-Activation Is Becoming The New ‘Touch’

The adoption rate of smart speakers with voice assistants grew 140 percent from 2015 to 2016, according to a survey from music streaming service Pandora and Edison Research.

In particular, Pandora usage on these devices grew by a 282 percent year-over-year.

Wit that growth in mind, Pandora sought to get a sense of how the rise of devices such as Amazon’s Alexa, Apple’s Siri, Google Assistant, and Microsoft’s Cortana is opening up new opportunities for marketers to reach multiple household members in contextually relevant ways they couldn’t before.

The research bears out much of what NPR found in its recent examination of the role of voice-activation and consumers’ media usage. Roughly 65 percent of people who own an Amazon Echo or Google Home can’t imagine to going back to the days before they had a smart speaker, and 42 percent of that group say the voice-activated devices have quickly become “essential” to their lives, NPR’s research said.

Among the obvious points both NPR and Pandora’s separate studies found: listening to music was the initial reason people sought these devices for. But the use cases of have quickly mushroomed.

With Apple emphasizing entertainment as part of its marketing behind its Siri-powered smart speaker, Homepod — which is set to be released in December — the next phase of audio and voice activation may be only just emerging. But it is emerging at a rapid rate.

From Touch To Talking

As Keri Degroote, vice president of research and analytics at Pandora, notes,  it is critical for brands to align their strategies accordingly.

“Voice-activated-everything is spreading like wildfire,”Degroote says. “From what we’ve seen, yes Smart Speakers have just surpassed any fad or experimental phase. The demographics of users (particularly the high proportion of 55+) suggest that this is no longer early adopters, but has hit the mass market. And the frequency with which these devices are used amongst consumers show the true value of bringing them into their homes.”

There is still room to grow in terms of users, functionality and integration – look back on the iPhone’s launch a little over 10 years ago, she adds.

“What brand can you name that doesn’t have a presence on the app store these days?” Degroote says. “And how many brands wish they were on the top of app-store charts in the early days to secure that prime home-screen positioning? It is important brands don’t play catch up in two- or three years’ time and find themselves in the same position.”

Still, Larry Rosin, president of Edison Research, notes that the adoption curve may be different from some of the other technologies and platforms that consumers have popularized since the iPhone emerged.

For example, Facebook, Instagram, Snapchat, as well as fitness trackers and wearables, have tended to be driven first by younger tech aficionados. The rise of voice-activation has been driven by people who are older and more affluent.

“This is not just a ‘young people’s technology’ like video gaming, for example. It’s much broader in terms of its appeal. So the adoption curve is going to be a bit different than with previous technologies. To start, connected home devices are not the cheapest products. But it depends on how you consider them: if you think of them as a computer, they’re generally not that expensive. If you think of them as a novelty, then you might consider them a bit pricey. For people who can afford these devices, voice-activated devices are quite practical.”

Here are some of the topline findings of Pandora’s study, which was based on interviews with 444 U.S. adults who own a voice-activated smart speaker: Amazon Echo, Dot, Tap, or Google Home:

  • Voice-enabled home devices are creating a rise in audio consumption and music. On a weekly basis, 69 percent of people are regularly tuning into audio content on their voice-enabled smart speakers with 58 percent tuning into music for an average of 4 hours and 34 minutes per week.
  • We now search, make inquiries and buy with our voices. 46 percent of people are checking the weather, 42 percent get a joke, “Easter egg” or converse, and 40 percent are asking general questions on where to find a store or how to cook a particular recipe. 29 percent plan to make purchases with top items being technology, household goods and beauty products.
  • Adoption is beyond fast. While it took many years for there to be multiple TVs in the home, 1 out of 3 people already have 2 or more voice-enabled devices across different rooms in their home.
  • These devices are not just for the young and tech-savvy. 40 percent of these device owners are between the ages of 35-54 with younger Gen Z and Millennials, 18-34 (35 percent) coming in second (35 percent). 
  • Voice-activated devices are also social. 77 percent of people are listening to music on these devices with friends and family: creating new ways for advertisers to engage multiple members of the household at home.

What Does Voice Mean For Marketers?

When looking at the the most popular usage patterns Pandora’s study notes, it’s worth considering whether voice-activation is for all marketers — or just some who can meet a direct question-and-answer response that depends on a certain immediate need.

Can voice-activated assistants have greater impact on the purchase a consumer packaged goods product, as opposed to, say, buy a car or real estate?

“From a short-term perspective, yes it appears that brands that serve immediate needs (like CPG products) are best positioned to capitalize on Smart Speakers,” says Degroote. “This is another way of search functionality, only this time done through voice. Users are already turning to smart speakers and voice assistants to talk, search, entertain, shop, etc in moments where they may have used a screen in the past.

“However, data from a follow up study on the Pandora Soundboard suggests that Voice Assistants are going to be key referral sources for a whole range of consumer needs,” she adds.

Around 60 percent said that they’ll use Smart Speakers to find stores and business locations, suggest entertainment content like TV shows and movies, and make restaurant recommendations in the future.

“We can easily see this evolving to Voice Assistants being the first ‘port-of-call’ on how to maximize tax deductions, or develop a training routine or physiotherapy exercises –a perfect opportunity for more service-based industries to deliver their messaging and offer their services to consumers,” Degroote says.

Advertising And The Company Of Others

As Pandora’s research suggests, the use of voice may have a more social aspect to it as opposed to the smartphone, which has come to represent the most personal of “personal computing.”

Does that mean the advertising we’re used to seeing on mobile and social channels will need to reflect that the voice-activation experience is not necessarily “solo.” What impact is that social aspect likely to have — or should have — on marketing strategies aimed at leveraging smart speakers?

“Brands need to be aware of messaging to consumers on Smart Speakers, or any Connected Home device for that matter (Smart TVs, Fridges, Games Consoles),” Degroote says. “On Pandora, the majority of our listening is on mobile which usually dictates a one-to-one creative approach.”

If a listener is in their car listening via their Connected Dash, the situation changes — they could be with their children or by themselves, which may change the way a brand wants to communicate with them and “show them they know them,” Degroote notes.

“We estimate that over 50 percent of listening via Connected Home devices is done in the company of others, which gives brands the opportunity to reach many listeners at once during a number of moments and occasions,” she adds. “Being able to serve a contextual message to a father playing with his kids on the weekend, or a couple hosting a dinner party for their old college friends on Saturday night provides marketers a great opportunity to reach consumers at key moments that create relevance for their products.”

For Edison’s Rosin, who notes he’s something of an outlier among digital assistant owners: he has one voice-activated device in his kitchen and one in his bedroom. Most people tend to have them in their living room. And that will have a significant affect in the experience that people expect from the media and ads they receive from these devices.

“There is plenty of evidence that most people are using these devices while they’re together, as opposed to being alone,” Rosin says. “Audio has been hot for awhile, and the combination of audio and shared interactivity, suggests that voice and listening is only going to become more central in the way people use computers.”

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Department Stores’ Pains Eased In Q2, But Challenges Are Digging In

This past week’s earnings results for Macy’s and Kohl’s were brighter than expected, but that doesn’t mean troubles afflicting major retailers are fading.

As eMarketer pointed out on Thursday, Macy’s same-store sales slipped 2.8 percent — the 10th consecutive quarterly drop.

Meanwhile, Kohl’s same-store sales were essentially flat, falling 0.4 percent year-over-year, continuing a dynamic that was seen for the past five quarters.

Even Nordstrom’s reversal was fairly meager, as it delivered a same-store sales gain of 1.7 percent.

On Friday, JCPenney posted a 1.3 percent declines in same-store sales, a bit worse than the expected fall of 1.2 percent.

The retailer, like its rivals, have been aggressively pursuing in-store omnichannel strategies designed to combat online showrooming, even as it and other major store brands shrink the number of locations they have.

For JCPenney, it did point to some bright spots in its home, fine jewelry, footwear and handbag, and Sephora beauty units.

“The company has gained customers across these segments — including younger shoppers who might previously have shunned JCP,” GlobalData Retail’s Saunders told CNBC about JCPenney’s focus on the home, footwear, and fashion categories.

Looking at how broader shifts away from malls and other big boxes have seen a retreat in foot traffic, eMarketer, citing RetailNext data, says that through July, sales and traffic at US brick-and-mortar stores have declined each month since at least January 2014. Both Macy’s sand Kohl’s, for instance, said on Thursday Q2 traffic declined.

“Department stores themselves also have failed to keep up with fast fashion rivals like Zara,” eMarketer says. “They also have shot themselves in the foot with frequent promotions and one-day sales.”

Some observers find that omnichannel moves, such as advancement of mobile-based loyalty programs, are unlikely to reverse the trajectory of department stores’ dwindling fortunes.

“It’s all band-aid stuff, said Mark Cohen of Columbia Business School in an interview with eMarketer. “The slope of the curve of their performance continues to point downward. The slope may be abating a bit, but not turning up. Macy’s is the poster child of the whole sector. The department store genre is in decline.”

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Age of Amazon: Stores’ Lack Of Responsiveness Is A Prime Problem

Pretty much all brand marketers agree that “responsiveness: the ability to source, understand and then quickly react to feedback, preferences and needs” is crucial to the delivery of an exceptional customer experience as expectations driven by Amazon and the on-demand economy have shaped consumers’ views.

But all too few can say that their businesses can meet those expectations.

In a CMO Council survey of 153 senior marketing executives (54 percent of whom are CMOs), 90 percent concede responsiveness is important, if not critical, to attracting and retaining customers and maintaining competitive viability.

However, only 16 percent of marketers feel their organizations are extremely responsive to the consumer, failing to make changes to products, packaging, services and experiences based on real-time consumer requests and feedback.

Is Anyone There?

The CMO Council study, The Responsiveness Requirement: Meeting the Consumer When and Where It Matters to Drive Growth, was conducted with Danaher Corporation’s Product Identification Platform companies, examined the level of success (or lack thereof) when it comes to responding “in the moment,” whether it is a physical or digital touchpoint.

“Customers fully expect for brands to engage at the speed of light—after all, it is exceptional customer experiences from brands like Amazon and Starbucks that have proven that rapid response, personalization and real-time (or near real-time) omnichannel engagements are possible at the push of a button or click of an app,” said Liz Miller, SVP of Marketing for the CMO Council. “This is engagement at the speed of digital, and the customer expects a similar level of responsiveness across all experiences, regardless of whether the channel is physical or digital.”

In general marketers feel they are able to respond or react to consumer feedback, requests, suggestions or complaints specific to marketing campaigns in less than two weeks — which to app-centric consumers may feel like a lifetime.

For the most part, 78 percent of marketers surveyed are able to meet that expectation, with 43 percent actually saying that they are able to respond to the consumer within 24 hours, effectively setting the expectation with consumers that responsiveness is possible.

In those cases, the averages are skewed by online interactions, which are naturally immediate. When it comes to brick-and-mortars, though, that’s when the problems of immediacy show themselves.

About 77 percent of respondents admit it can take up to 90 days to respond and react to customer feedback, suggestions or issues, with 36 percent needing up to three months to respond. In other words, the equivalent of several lifetimes as far as consumers are concerned.

Source: CMO Council

Among the solutions the CMO Council is proposing to spur marketers to ramp up their level of responsiveness:

  • Starting strategic conversations internally to bring product packaging and physical touches like POP displays and promotions into the customer experience dialogue. This isn’t just about printing and getting packaging made; it must be discussed as a critical touch in a multi-touch, connected experience.
  • Setting the expectation that procurement must act as a strategic partner and not just a cost-cutter. Together, marketing and procurement must identify vendors that can meet responsiveness goals, not just budgetary ones.
  • Demanding transparency. Marketers need to develop supply chain relationships that provide continuous data streams with the intentional goal of total transparency across the supply chain to track everything from creative iteration and collaboration to works- in-progress.
  • Broadening the meaning of omnichannel to including everything from social posts to product packaging. It is time to bring physical and digital together, if for no other reason than this: The consumer thinks of us as one brand—not a physical brand and a digital one.

“With recent great advances in digital media delivery, unfortunately, the capability to make changes to physical media has been a laggard,” says Joakim Weidemanis, Group Executive and Vice President, Product Identification at Danaher Corporation. “Many people simply don’t know what’s possible until they decide it will be so. Advances in technology today allow business leaders to demand more speed, higher quality and greater transparency from their partners and vendors than ever before. Even more powerful for global brands is that such technology is available all over the world.”

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Amid Declining Ad Revenues, Twitter Aims To Prove Offline Sales Effectiveness

Twitter’s second quarter earnings last month revealed an interesting disconnect: on the plus side, advertising engagement grew 95 percent compared to the same period the year before; but ad revenue slipped 8 percent.

The competition for the ad dollars not claimed by the digital ad hegemons Facebook and Google is a problem all online publishers have to contend with. But Twitter’s ubiquity as a mainstream social media tool has put a spotlight on its challenges more than most companies, though Snap is starting to feel some heat as well.

eMarketer has forecast Twitter’s ad revenue will grow 1.6 percent this year, to $2.28 billion — driven by almost entirely — 90 percent — from mobile. By being so heavily mobile, the microblog hopes to capitalize on the kinds of micro-moments that have propelled spending on its online rivals.

To help make its case to marketers, Twitter has enlisted analytics partners Foursquare and Nielsen to make its case to brands, particularly when it comes to driving offline foot traffic and sales.

Among the stats Twitter is highlighting involves the sale of mobile devices at telcos’ brick-and-mortar locations.

“For carriers and manufacturers focused on generating in-store foot traffic, Twitter proves to be an effective partner,” Twitter says. “Research shows that Twitter not only drives in-store foot traffic, but it also compels buyers to spend more overall. In fact, people on Twitter are more likely to research a smartphone while in-store compared to those who don’t use Twitter.”

Specifically, Foursquare and Nielsen say that buyers spend 6.8 percent more with mobile wireless carriers after seeing ads on Twitter.

Nielsen and Foursquare’s research also offered analysis of the kinds of people who are more likely to make purchase in brick-and-mortar stores.

Twitter users tend to frequent big-box stores and budget-friendly travel locations, and their tastes include fast-casual food. While that sounds a lot like the general population, it does indicate the connections of when those brands should advertise. For example, in-store shoppers love sports — again, like pretty much everyone else — so brands can activate during major sporting events when people are the most engaged on Twitter.

“On Twitter, people are in a unique discovery mindset,” the report says. “They are curious, leaned in, and looking to learn, be inspired, and act. This means that because users are in the right mindset, people on Twitter are more likely to see and remember ads.

“Competition in the telco industry is fiercer than ever, and marketers need to make their ad dollars work harder,” Foursquare and Nielsen note. “Whether you are looking to drive offline sales, online sales, or both, people on Twitter are especially receptive to ads and motivated to buy. Brands that leverage customer insights to reach different audience segments based on their interests, passions, and behaviors on Twitter will be able to more thoughtfully and creatively reach and win customers.”

Of course, given that Twitter’s rivals recognize the micro-moments and user attention, Twitter will have to make a concerted effort to specifically target the brands who are considering how much to spread finite ad dollars around.

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IAB Working Group Aims To Develop Marketing Standards For Artificial Intelligence

The Interactive Advertising Bureau has established a working group of industry executives to tackle three areas that will shape the use of artificial intelligence and machine learning in the digital marketing space: recruiting talent, developing new approaches to creativity, and establishing insights.

The IAB AI/Machine Learning for Marketing Purposes Working Group is headed by Co-Chairs Patrick Albano, Chief Revenue Officer of AdTheorent, and Jordan Bitterman, CMO of IBM’s the Weather Company.

The Weather Company has been particularly aggressive in using IBM’s AI and machine learning system, Watson, to power campaigns for the likes of Campbell Soup Company, Unilever, and GSK Consumer Healthcare.

“Transforming ourselves and industries is part of The Weather Company DNA,” Jeremy Steinberg, TWC’s Head of Global Sales, told us earlier this year. “We’ve embraced big data and leveraged it to improve every aspect of our business, from forecast accuracy to ad targeting. Now we’ve set our sights on cognition. We believe human interaction is the new ‘search,’ and that cognitive advertising is the next frontier in marketing – and we’re leading the charge to make it a reality.”

The Weather Company is in the process of establishing the Watson Ads Council, which will include a marketers who will act as a sounding board for the latest ways of leveraging Watson Ads and the use of artificial intelligence for brands.

The IAB is expected to amplify and organize existing efforts at using AI and machine learning for advertising.

Citing a Forrester prediction that by 2020, Albano wrote a blog post introducing the working group by nothing “the companies that effectively master AI will steal $1.2 trillion per year from those that don’t… If you’re not thinking about it yet, hold your wallet because the race is on.”

In addition to the three initial subjects the working group plans to tackle, Albano also highlighted these areas of interest that will be on the agenda as well:

  • Understanding how AI and ML will impact our business
  • Simplifying, defining and setting standards for the space as it relates to the advertising and marketing industry
  • Organizing tools for the industry to plan ahead
  • Thinking about responsible usage of AI so that humans and machines work well together into the future

The assembling of the working group on AI follows the publication of the IAB’s  “playbook” on understanding location-based advertising in April.

On the talent development front, Albano offered a military analogy to what digital marketing companies face in terms of finding the right people to move AI and machine learning programs ahead.

“Recruiting people is hard as so much of the decision is based on timing and circumstance,” Albano wrote. “A cliché approach to recruiting for the armed services is ‘setting up a table in a shopping mall,’ which is similar to the way that a lot of advertising targeting works – make a broad assumption (potential recruits will visit the mall) and hope for the best (maybe our sign will attract them).

“The US Air Force took a different approach earlier this year by using Machine Learning to analyze the different attributes of young men and women across the US and predictively target the people most likely to volunteer for service,” he continued. “This not only takes the guess work out of advertising, but it also identifies hard-to-reach audiences with the right message.”

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What Do People Use Smart Speakers For?

Roughly 65 percent of people who own an Amazon Echo or Google Home can’t imagine to going back to the days before they had a smart speaker, and 42 percent of that group say the voice-activated devices have quickly become “essential” to their lives.

Still, it’s the earliest of “early days” for this Connected Intelligence technology, as a mere 7 percent of the population actually has a smart speaker in their home, a report by Edison Research commissioned by NPR suggests.

Given that smart speakers and the connected home are only starting to reach mainstream interest — and Apple’s first speaker, Homepod, isn’t even due to hit the market until December following its June preview —  it’s not surprising that just 7 percent of U.S. adults own one.

NPR’s Smart Audio Report was based upon a national online survey of 1,620 Americans ages 18 or over, including 15 in-home interviews in Atlanta, Chicago, Los Angeles, and Allentown, PA.

About 800 respondents indicated that they owned at least one Smart Speaker (160 Google Home, 709 Amazon Alexa-enabled, and 69 who owned both.) 820 respondents did not own a Smart Speaker device, and were “surveyed for comparative purposes.”

Amazon Prime Time

While Amazon Echo’s dominance of the space is no surprise, NPR’s report puts it in a bit more context: 82 percent of the smart speaker owners subscribe to Amazon Prime, the e-commerce’s giant’s discounted sales and shipping membership program; 44 percent of those surveyed who don’t own a smart speaker subscribe to Prime, indicating that Amazon Echo has plenty of room to go grow — as do its rivals.

It’s remarkable to gauge the speed with which voice-activation, although it’s been around popularly through Apple’s iOS assistant Siri debuted on the iPhone in 2011, Still, it’s one thing going from using Siri to open an app on a device, to using a digital assistant to book restaurant or hotel reservations.

In 2017, 35.6 million Americans will use a voice-activated assistant device at least once a month for sudden rise of 128.9 percent over last year, says eMarketer.

At the moment, Amazon’s Echo device has a huge lead with a 70.6 percent of users in that space. Google Home, which only launched last October, will have to catch up as it has just 23.8 percent of the market.

Earlier this summer, a Raymond James survey of 500 consumers found that 14 percent of iPhone owners are interested in buying Apple’s Homepod. To put that into perspective, three years ago, when the Apple Watch was first announced, iPhone owners’ purchase intention of that product was only 6 percent.

Source: NPR and Edison Research

What Are Smart Speakers Used For?

In looking at over two dozen use cases, just 13 percent of smart speaker owners use their smart speakers to find a local business, according to an NPR survey.

Again, considering the relatively small penetration, and Amazon’s particular push to use Echo and its voice assistant Alexa to push products through Amazon Prime, that low number is not a surprise. As consumers get used to the idea of using their smart speakers to connect them with places in the physical world, that number will rise quickly.

 

While most of the people surveyed said they used their smart speakers to play music (68 percent) or check the weather (58 percent), most of the uses offer additional points of connection for brands.

For example, the calendar and appointments use case (23 percent) might allow OpenTable to make better restaurant suggestions through its existing Alexa skill.

“As these platforms where people are actually spending their time adapt, and allow you to stay within the platform more and more, that, to me, is [the future],” Birchbox CEO Katia Beauchamp recently told GeoMarketing‘s Lauryn Chamberlain.

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Seamless Parent Grubhub Buys Yelp’s Eat24 For Nearly $300 Million

Two years after trying to beat Grubhub in the local on-demand delivery space, Yelp has decided to sell its Eat24 unit to its former rival for for $287.5 million.

The deal was announced within Yelp’s Q2 2017 earnings report, which saw revenues rise 20 percent as placement on app unique devices grew 22 percent over last year to roughly 28 million on a monthly average basis.

Yelp acquired online food order service Eat24 for $134 million back in Feb. 2015, just as the the on-demand delivery space was taking off amid burgeoning competition from GrubHub and its subsidiary Seamless, as well as Postmates and UberEats, DoorDash, Caviar, and others.

Grubhub in action

Grubhub’s Local Delivery Dominance

Before the Eat24 deal, Grubhub has been carefully picking up smaller delivery platforms as it seeks to maintain its local dominance of restaurant takeout orders.

In June, Grubbub bought Boston-based Foodler, which is estimated to bring more than $80 million in sales from that city alone. That purchase was preceded by May 2016’s acquisition of Los Angeles delivery provider LAbite, which had $80 million in food sales in 2015, according to the WSJ’s report at the time.

Grubhub’s “active diner growth” was up 26 percent compared in Q1, marking its  highest growth rate since 2015 “and easily the most net Active Diners we have added organically in a quarter,” the company said during its analyst call in April.

To get a sense of its scale, Grubhub processed 324,600 orders (aka “Daily Average Grubs”) and nearly $900 million in related revenue during the quarter, for a 21percent increase year-over-year.

The acquisition of LAbite contributed approximately 1.5 percent to Active Diner growth, 1 percent to food orders growth, and 3 percent to related food sales gains.

Grubhub for Restaurants

But the margins of the delivery businesses has remained low, even as restaurants have continued to adopt — or, in the view of some, acquiesce — to the notion of on-demand meal delivery.

For example, major brands like McDonald’s have sought to increase sales by signing on with UberEats in the New York area last month.

But the competition is intense, and it appears that platforms like UberEats are far from profitable.

Facebook and Amazon have also begun entering into the food delivery space. Given the ability of those companies to weather the low margins and the scale of their respective operations, the on-demand delivery space is particularly ripe for consolidation.

Therefore, for Yelp, this appears to be a case of “if you can’t beat ’em…” sell to them and ally with them. The partnership has a term of five years, which is practically a lifetime compared to how long many of the on-demand delivery platforms in the space have existed.

For instance, during Grubhub’s Q1 2017 earnings call with analysts, CEO and Founder Matt Maloney said that the company sent $10 million in takeout orders to our more than 50,000 restaurant partners every day and generated close to 40 percent year-over-year revenue growth.

In many ways, Yelp has achieved one of the main purposes for buying Eat24: to expand the idea of the local guide as more than just a “reviews site” to a commerce and service platform connecting online, app-focused consumers with restaurants.

The deal calls for Grubhub, which connects 55,000 restaurants with consumers in over 1,200 U.S. cities and London, will buy Yelp’s Eat24 business. At the same time, Yelp will integrate online ordering from all Grubhub restaurants onto its extensive local goods and services platform.

“Bringing Grubhub onto the Yelp Platform through this long-term partnership will be a win for everyone,” said Yelp CEO Jeremy Stoppelman, in a statement. Consumers get a high-quality end-to-end experience with a wider selection of restaurants and better delivery options.

“Restaurant partners receive increased online exposure and the opportunity for increased order volume, as well as expanded delivery support,” Stoppelman added. “Yelp and Grubhub benefit from greater scale and sharper operating focus. We expect Grubhub’s acquisition of Eat24 to create significant value for our consumers, restaurant partners and stockholders. The Eat24 team deserves credit for the transformational impact they’ve had as part of Yelp, and I’m pleased that we will continue to pursue this huge market opportunity in partnership with Grubhub.”

“Grubhub and Yelp, market leaders in their respective fields, have a shared mission of connecting consumers to local businesses,” says Grubhub’s Matt Maloney.

Maloney, in his statement called Grubhub and Yelp, market leaders in their respective fields, with a shared mission of connecting consumers to local businesses.

“With such complementary goals and strengths, Jeremy and I are excited to form a partnership that will allow each company to focus on its respective expertise, while working together to expand local e-commerce for diners and restaurants,” Maloney said. “Adding Eat24’s large diner base and thousands of restaurants to our platform will accelerate Grubhub’s mission to become the most comprehensive marketplace connecting takeout diners and restaurants. The long-term agreement ensures that Grubhub also has access to Yelp’s enormous user base and clear content leadership to help drive more diners to our restaurants.”

‘A Win For Everyone’

In attempting to make the case that the deal is indeed a “win-win for restaurants and diners, Grubhub and Yelp provided this outline:

  • Diners: Together, Grubhub and Eat24 will form the largest network of restaurants offering online and mobile food ordering in the United States. Diners will have the ability to discover and order from approximately 75,000 great local restaurants through either Grubhub’s or Yelp’s easy-to-use interface and take advantage of the industry’s lowest diner fees.
  • Restaurants: Connecting Grubhub’s unmatched restaurant network and efficient delivery infrastructure to Yelp’s large purchase-oriented audience will give Grubhub’s restaurant partners access to new potential diners and the opportunity for increased orders. Extending Eat24’s restaurants to Grubhub’s sizable diner network will help drive new diners and incremental revenue to Eat24 restaurant partners.
  • Grubhub: The combination of Eat24’s much-loved brand and significant reach will enable Grubhub to address more diners and drive more volume in all markets.
  • Yelp: The partnership adds tens of thousands of order-ready restaurants to the Yelp Platform and increases the availability of food delivery via Yelp, which will drive usage and transaction velocity in Yelp’s most highly-trafficked category.

Restaurants Wrestle With On-Demand

Restaurants have felt considerable pressure the past few years the sign on with the on-demand food delivery apps.

As Chris Brandt, the ‎EVP and chief brand officer at Bloomin’ Brands,  — the corporate parent of casual dining franchises Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse & Wine Bar — told us earlier this year, his primary competition isn’t other restaurants; it’s all the on-demand dining options consumers have available from their couch as they tap out orders on an increasing variety of smartphone delivery apps.

The question restaurants wrestle with is if people can have their food in the comfort of their own home — and save on beverages and other menu items typically driven by table-service — would they stop coming altogether?

When looking at individual categories like Quick Serve Restaurants and Casual Dining, the answer from a recent report by mobile data analytics provider Sense360, is complicated.

But for the most part, Sense360’s look into the connection between mobile-based food ordering and traffic to full-service restaurants and QSRs found no significant decrease in restaurant visits and in-store orders from customers who have downloaded third-party delivery apps.

“With delivery among the most watched business opportunities in the restaurant industry today, our findings tell an interesting story of both who delivery app users are, and that downloading such apps did not impact their in-restaurant visit behaviors and frequency,” Sense360 CEO Eli Portnoy told GeoMarketing at the time. “The data gives a clear and unequivocal view into this industry trend, provides clarity that restaurant operators and owners have been seeking to help them make the most informed and strategic business decisions.”

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