Wisconsin Startup Points The Way For Grocers To Challenge Amazon/Whole Foods Onslaught

Even before the looming prospect of a combined Amazon and Whole Foods upending the grocery space, supermarket independents and chains alike appeared to be ready to meet consumers’ desire for crafting seamless online/offline shopping experiences.

As eMarketer has noted in its look at e-commerce grocery shopping, the number of consumers who purchase groceries digitally will rise significantly this year. Citing research from retail marketing and analytics software company Unata and consultancy Brick Meets Click, close to one-third (31 percent) of U.S. internet users said they were “very likely” or “somewhat likely” to buy groceries online in 2017—up from 19 percent in 2016.

While much of the focus on the broader on-demand delivery space has tended to revolve around what is happening in major cities like New York and San Francisco, GrocerKey has been ramping up its work with grocers in its native Wisconsin for the past two years.

With online grocery sales expected leap 355 percent to $123 billion by 2023 from  $27 billion in the U.S. in 2014, according to Brick Meets Click, it’s clear that the marketplace won’t belong to one player. And that’s what GrocerKey is planning for,

In essence, GrocerKey is a white label solution for grocers that want to create their own e-commerce shopping platform and operate it under their own brand name, as opposed to relying on a third party like Instacart or Postmates.

GrocerKey’s main client — and lead investor — is Janesville, WI-based Woodman’s Market, which runs 18 stores across the state and in northern Illinois.

The Madison, WI-based startup’s grocery focus goes back almost 10 years, notes CEO and founder Jeremy Neren.

“I ran an online on-demand grocery delivery service in Madison, WI for close to a decade. That led up to starting GrocerKey. We warehoused the product ourselves for over 8 years. I had a strong desire to expand that business, and in an effort to make the business more scalable, I shifted the operation from a warehouse model to operating out of a local grocery store and leveraging their inventory. That local grocery store happened to have their own e-commerce platform powered by the market leader in white label e-commerce grocery technology.”

Duly inspired, Neren and his team pivoted into starting GrocerKey and began pitching local grocery retailers.

“In early 2015, we were able to partner with Woodman’s Markets, the largest grocery chain in Wisconsin,” Neren said. “They not only contracted with us to use our technology, but licensed us to help them physically build the business on their behalf. Woodman’s also invested about $2.1 million in GrocerKey and they are our lead investor.”

In addition to Woodman’s, GrocerKey has recently signed up three other supermarkets on top of its 11 existing retail partners — Neren won’t disclose the names just yet. The company, which has over 100 employees, is planning to build out functions that will allow for its supermarket clients’ customers to blend online and in-store shopping.

GeoMarketing: On-demand delivery is generally viewed as concentrated in upscale, tech-centric, large cities. How would you describe the demand in Wisconsin and the Midwest for grocery delivery?

Jeremy Neren: No doubt about it – there is larger consumer demand for e-commerce grocery in other parts of the country. That said, the demand is increasing everywhere in all markets. We did 5,000 orders with an average $150 basket-size last month out of a half-dozen stores on ShopWoodmans.com and a small marketing budget. It’s all growing organically.

Every market has its own unique pull. In Madison and Milwaukee, you tend to have some awful weather for a substantial part of the year. That’s a natural driver of this business – people don’t want to go outside in zero-degree weather anywhere.

So we try to tailor services to the individual markets we’re in and see what makes sense for that individual retailer. This is definitely not a cookie-cutter approach.

What are the pain points GrocerKey solves for the markets you work with?

The biggest pain points we’re trying to solve for grocers in e-commerce is that their stores are designed for the brick-and-mortar environment, not e-commerce fulfillment. Right now, there’s a surplus of brick-and-mortar stores in the U.S. So retailers are motivated to get into e-commerce, for one, to leverage those existing stores. They don’t want to spend even more money to build a warehouse to develop a separate e-commerce business.

So the question is, “How do we take an inherently inefficient environment and create an efficient business on top of it?”

In many cases, retailers don’t often have great intel on exactly where products are in their store. So we create a “pick-path” in their store — then, when you’re assembling an e-commerce order, you’re using the most efficient path possible to shop for whoever is taking that e-commerce order. That allows the store to reduce labor costs and then ultimately provide a better value for the customer.

What are the issues GrocerKey solves for consumers?

The biggest challenge is out-of-stocks. As a consumer, if you don’t see the item you want on the shelf, you move on and grab another similar item. If you buy an item online and when it’s delivered, it’s not there, that’s a miserable experience.

How do you solve for that? We let the consumer choose a backup item in case their first choice isn’t available and we provide suitable backup options for staff that assemble online orders.

How do you help the markets you work with spur interest and usage of on-demand grocery delivery?

We are doing more work with third-party platforms to create adoption. We’re utilizing the strength of the retailer’s brand and providing them with a number of robust marketing tools that are built into our platform.

The role of Connected Intelligence and voice-activated search and ordering through Amazon’s Alexa, Apple’s Siri, Okay Google, and others is becoming mainstream. What impact will that have on the way people shop for groceries?

We’re bullish on the idea of voice-activation. E-commerce is all about convenience and removing friction when it comes to the shopping experience. Voice-activation and artificial intelligence advances that idea of convenience. It’s going to be an integral piece of e-commerce and shopping going forward. It’s already having an impact, as people are ordering groceries on Amazon now.

What do you think the Amazon/Whole Foods deal means for established grocers?

The Amazon deal demonstrates the need for grocery retailers to move faster in their digital efforts. There was already pressure to do so, given the rise in consumer demand and pressure being put on those stores by Amazon. So that pressure will only increase with Amazon having a nationwide brick-and-mortar presence to add to its arsenal of digital tools to reach consumers and bring them into their overall ecosystem.

It requires an entirely different operational approach than what Amazon is accustomed to, in terms of translating its e-commerce approach to serve customers in-store.

It’s also important to consider that strengthening your digital presence does not simply mean e-commerce, it means providing more touch points to reach consumers — e-commerce is a component of that, but you must also consider how to augment the in-store experience via digital touch points such as value added native mobile apps.

What’s next for GroceryKey?

We’re in the process of launching several retailers. And we’re trying to encompass more in-store shopping tools, so we’re becoming more of an omnichannel platform as opposed to a strictly e-commerce company. You can build your shopping list and give them the same item availability and pick-path information that we give to e-commerce shoppers. Eventually, that functionality will lead to mobile self-checkout within the store.

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How Marketers Can Integrate OOH, Social To Create Context — At Scale

It’s long been the marketer’s “holy grail” to get the right message to the right consumer at the right time — but actually delivering that personalized engagement at scale is a bigger challenge.

In a panel discussion at at Cannes Lions dedicated to bridging digital and real-world experiences, execs from Kinetic, Maxus Global, and Clear Channel talked with GeoMarketing‘s Lauryn Chamberlain about using OOH to drive location-specific context and then social media to amplify that message — plus, what’s going on with the future of smart cities. An excerpted version of the conversation, below.

Let’s start with some examples: How have you worked to bridge the online and offline worlds through integrating mobile, social, and out-of-home in your respective work? What have you seen people really engage with? And on the flip side, what hasn’t worked so well — what can we work on as an industry? 

Richard Stokes, Worldwide Chief Development Officer, Maxus Global: I’ll talk about a very specific example: a campaign for the Dutch Kidney Foundation. Obviously, that’s not somewhere where you’re trying to sell something, but charities are under a lot of pressure from a fundraising point of view and from an awareness point of view — they [needed to] get the message out.

What they did was to take a story about a single patient, Fabian, who was on dialysis. What happens when you’re on dialysis? You’re superman to your kids, you’re a sportsman, you’re a businessman — but your world shrinks, and your world becomes the bedroom because you have to spend most of the day in dialysis.

What we did is to take the fact that here’s Fabian in his tiny bedroom — and then ask, ‘where can we broadcast this to that is the exact opposite?’ The exact opposite was a central station [in the Netherlands], a very busy transport hub. A single digital panel [incorporating social] allowed Fabian to communicate, and interact, and speak to people who stopped in front of him. Kind of take the world into his tiny little bedroom in that way.

The interaction that they had was fantastic, but it didn’t stop there. In a way, what was interesting for me, was to see how out-of-home gave this campaign the physical context, and social gave it scale. Everything was captured [for] Fabian, and the perspective then went out on Facebook, on his page. The campaign was a huge success, and their subsequent donations have been huge. I think that’s a great example of how mobile, social, and out-of-home can work together [to do more] than people might expect.

Mauricio Sabogal, Global CEO, Kinetic: What is interesting is, who are some of the biggest advertisers in out of home? Apple, Google, Facebook, Amazon. It might seem kind of weird, because their media assets such that, well, why are they advertising out-of-home? That’s a good question, and the answer is, because they need to be direct, and really they’re getting [incredibly useful] traffic data through interactive [OOH.] They see something in the everyday, they collect it, they analyze it.

But it’s not just about connecting; it is about connecting the strategy at the right moment, to the right company, to the right communication, and to continue to go from there. Once you’ve done that, the question is how to amplify [the message]. [That’s] a good way that social media platforms come into play.

What are the challenges of trying to deliver that contextually relevant message, at the right time, via out-of-home? What have you learned?

Stefan Lameire, Chief Customer & Revenue Officer, Clear Channel International: As Mauricio said, the challenge of technology is that a lot of things are possible — and it’s not just about [connected technology just for its own sake.] I really never forget that what we do with technology should be consumer relevant.

The consumers are driving a different effect, and here’s something we learned: We were putting [a touchpoint] on the side of our panels, where people could actually interact through their smartphones, using NFC, QR, whatever.

The idea behind doing that is really strong, I think, and we indeed had thousand of companies across the globe doing it. But we ran into the issue that the process of downloading coupon, or being told to ‘do this, do that,’ was not consumer relevant. The consumer felt this was advertising; it was not a genuine choice to interact with the brand. [We had to] rethink what kind of information people would actually want — and when. Like, in the UK, there’s a great example of [interacting at taxi stands] to give people information about drivers or about the city.

My two main takeaways would be: Whatever you do with technology, make it consumer relevant — and try to make it at scale so that it’ll use the value of the reach that algorithms have to offer.

Stefan, you mentioned the taxi example in the UK. In many ways, the rise of OOH that is interactive in real-time is driving the development of smart cities. How can you deliver that consumer relevance in smart cities? And what kind of opportunities do they open up for marketers?

Mauricio: We’re [seeing that] evolution now; we’ll be having not just wifi, but internet of things, and many other technologies available to activate in cities.

We see many aspects in cities that can be connected, and you will see thousands of facets of this. The most important part of this, for marketers to think about, is how to demonstrate efficiency and how to demonstrate the right alignment.

Stefan: If you look at this as a media owner, I think, we are restoring assets by delivering services. In the last two years, we’ve [invested in] smart bikes, and wifi, and our company really invested a couple hundred million dollars. We are trying to drive this [evolution], to actually grasp how to support and develop [smart cities].

Some of the important solutions, and the really exciting things start to come in when you are starting to apply wifi, or whatever technology is, and not just in terms of delivering service. A lot of the potential [for marketers] comes from the real-time data that will be there. There are a lot more opportunities around collecting user data. It’s very interesting to see how that will evolve.

Richard: There’s also this opportunity as we look to the future of self-driving cars: You think about the two, three hours that someone has in their car [commuting] every day, that becomes an opportunity — a very valuable one. There’s a value exchange: Maybe I don’t have to actually pay for this car ride, when I’m getting to work, because I’m exposed to X amount of messages, and that’s a very context rich and mass reach environment. I think we can see that quite soon.

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Acquisition Of Zenly, Launch Of Snap Map Highlight Snapchat’s Real-World, Real-Time Influence

Snap, the parent company of social messaging app Snapchat, has been adding a variety of location tech tools at a rapid pace lately, and the debut of Snap Maps with the platform’s latest update is further demonstration of how its images and animations are intended to affect users’ activity in the physical world.

Launched the same week as its big appearance at Cannes Lions, where Snap’s branded yellow ferris wheel dominated the skyline in the seaside French town, Snap Map is being billed as a new map experience for its users.

In essence, Snap Map lets Snapchatters show and see what’s happening around their friends. As opposed to most social media uses of location, Snap Map is not about where you are and directions for how to get somewhere.

In addition, after suggesting certain similarities between Snap Map and French social location app, Zenly, Techcrunch broke the news that Snap acquired the company for between $250- and $350 million dollars in May, citing anonymous sources.

While Techcrunch contends that Snap Map is built directly on Zenly’s location sharing capabilities, the similarities actually appear to be merely skin deep.

Attribution is commonly required in map-based apps to indicate the technologies and geospatial data used in the application. The companies listed on the Snap Maps attribution page are all suppliers (directly or indirectly) to Snap Map. Typically a map platform puts together a number of different data sources, synthesizes them into the various map layers and then delivers them to the application. That indicates that Snap maps are built on Mapbox (as indicted in my previous article), not Zenly.

There is an obvious similarity between the two and Snap has acknowledged that they purchased Zenly several months ago. That similarity is may be due to Zenly having built on Mapbox as well…as are thousands of other customized map based applications.

Offline Activity Brought Selectively Online

The map itself is powered by a trio of location data visualization and geospatial tech providers: Mapbox, OpenStreetMaps, and satellite imagery vendor DigitalGlobe.

The activity on the map is seen through Snap “Actionmojis”– a new type of Bitmoji, which users can download separately to create a new avatar on Snapchat, the company said in its blog post announcement.

The idea essentially updates what other mobile apps from Swarm to France’s Zenly is to connect members of a social network together based on where they are and what they’re doing in the moment.

“In a lot of ways, we’re taking what a map is and turning it upside down,” Jack Brody, a product designer at Snap, told Refinery29’s Madeline Buxton. “This map isn’t about where am I, it’s about where are my friends and what are they up to? It’s not about figuring out how to get to your destination, but about discovering where you want to go.”

The nature of Snapchat, unlike say Facebook or Twitter, indicates a greater level of actual friendship in “real life” and its use of location reflects that level of intimacy: roughly 60 percent of the interactions on Snapchat are between close friends, according to a study called Circles of Influence from Sparkler, US data, commissioned by Snap.

To use and view Snap Map, app users simply pinch to zoom out from the Snapchat “camera.” The Snap Map is a new layer on top of the current Snapchat experience. The first time Snapchatters open Snapchat after updating their app, they’ll be taken through an explanation outlining how to find the Map and how it works.

Showing Snapchat’s Playful And Serious Sides

At the moment, there are no branded sponsorships available in Snap Map, the way they are through Snapchat’s Geofilters, which have been available to marketers for two years, starting with McDonald’s in Aug. 2015.

For Snap, The Map is another place for it showcase its users creativity in the app’s “Our Story” feature, which feature public posts. Users can also opt-out of wide sharing of their Map stories through the “Ghost Mode” privacy setting.

In general, Snaps are available to view on the Map for about 24 hours, though they may be found for a longer period through the app’s search.

A visual “Heat Map” within the feature can be used to point other users to a special event or breaking news at a particular place and are sorted through Snap’s algorithm.

Thumbnails will also help Snapchatters distinguish points of interest where a lot of Snaps are regularly being taken and submitted regularly, like Times Square or a major attraction, as well as those events that the Snap team has more of a hand in curating.

The addition of Snap Map comes a week after the company struck a partnership with geo-data specialist Factual’s Global Places data, which contains real-time info on more than 100 million places across 52 countries. Days before that deal, Snap acquired attribution platform Placed. That purchase came after months of assembling location data and digital presence knowledge from partners such as Foursquare and Yext (full disclosure: Yext is GeoMarketing’s parent company. More details on that relationship here).

Last August, Snap acquired mobile search and local recommendation app Vurb for a reported $110+ million to help promote discovery of local places.

Snap Map Making — And Breaking — News

While Snap tends to take things a bit more cautiously when it comes to marketing, the company has been trying to demonstrate how it, like Facebook/Instagram and Twitter, can serve as an additional distribution channel for news sites and publications. Given the inherently local quality of news, the use of Snap Map could be used to enhance Snapchat’s appeal to publishers.

As Brody tells Refinery29, Snap wants to prove it has a serious side as well as a playful side.  For example, Brody points to the first test of its mapping capabilities during construction site’s crane accident in Feb. 2016. Snapchat users began sharing details of the incident through the Our Stories view.

Brody’s summary of Snapchat’s role in spreading information is particularly telling for traditional news organizations still trying to catch up to the speed f social media: “That was this moment of ‘we have something here,’” Brody says. “We had newsworthy content 10 minutes before the first news company actually arrived.”

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Pinterest Adds Measurement Partners To Promote Proof Of Brick-And-Mortar Sales Lift

As challenges mount against Pinterest’s dominance on image search for brands, the photo sharing platform has signed up six major measurement providers to help deliver a message to marketers: “Pinners” are heavy shoppers across retail, consumer packaged goods, and other categories typically associated with brick-and-mortar purchases.

Pinterest advertisers can now tap brand lift measurement and related insights from Acxiom, Analytic Partners, IRI, Neustar MarketShare, Nielsen Catalina Solutions, and Nielsen Digital Ad Ratings. These new partners join eight existing measurement partners in Pinterest’s Marketing Partners program.

“People associate Pinterest with taking action,” writes Gunnard Johnson, head of Measurement Science and Insights at Pinterest, in a blog post. “98 percent of Pinners report trying new things they find on Pinterest, compared to an average of only 71 percent across social media platforms. Before they even open the app, they intend to act—and then Pinterest guides them to a confident decision.”

Source: Pinterest

Among the kinds of information Pinterest will be promoting to show off its store traffic and sales lift prowess include this insight from Oracle Data Cloud, which found that people who use Pinterest shop and spend more than the general public.

Looking across a mix of categories, including retail, CPG and automotive, Oracle reported that Pinners are 39 percent more likely to be active retail shoppers—and when they shop, they spend 29 percent more than people who don’t use Pinterest.

“Overall, our average CPG sales lift increased 82 percent in 2016, over 2015 rates,” Johnson wrote. “The Oracle Data Cloud analysis showed that 92 percent of Pinterest CPG campaigns measured drove a positive lift in sales.”

Pinterest has been rolling out a number of features designed to keep pace the aggressive pace of social media marketing tools from Facebook, Snapchat, and Twitter. In February, it rolled out  a new search function that aims to match discovery to images, not words.

Dubbed Pinterest Lens, “it lets you use the camera in your Pinterest app to discover ideas inspired by objects you see out in the real world,” the company said at the time.

Part of Pinterest’s pitch is that brands “see more than sales lifts—they see strong campaign ROI, too,” Johnson says.

When Analytic Partners studied Pinterest campaigns in the context of total marketing spend, Pinterest delivered $2 in profit for every $1 the advertiser spent on Pinterest.

“That outperformed all other categories, including digital as a whole, TV, and channels like print or out of home,’ Johnson says.

Despite the wider measurement coverage, Pinterest still lacks a dedicated location-based attribution solution that directly links seeing a Pin to store traffic and sales. But as the attribution wars heat up, it’s likely that Pinterest will be adding one sooner than later.

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Over 50 Percent Of Millennials Are Using Voice Commands At Least Once A Month

Over 50 percent of Millennial (18-34) use voice commands once a month or more, according to research from Mindshare and J. Walter Thompson, and Google has stated that a full 20 percent of searches on Android in the United States are now conducted by voice — meaning that brands need to think about voice search and commerce not as a distant eventuality, but as tidal wave sweeping the industry today.

At this week’s Cannes Lions event, J. Walter Thompson’s Elizabeth Cherian,  UK director of The Innovation Group, talked to GeoMarketing about why voice is more intuitive than text or swipe — and how brands can stay discoverable in the world of intelligent assistants.

Voice has just recently reached to point of viability. Per the findings in JWT and Mindshare’s recent ‘Speak Easy’ voice report, what is the state of voice and AI today? What do brands need to know?

Ultimately, there have been so many changes in artificial intelligence, and voice technology essentially fits under artificial intelligence. In particular, there is voice recognition; that’s when the computer takes in what you’re saying and turns it into text to one degree or another of accuracy. Right? Then there is natural language processing. Which is much more complicated, because that’s understanding intent — and there is more work to be done there, [but] we’re getting there.

Nonetheless, what’s incredible about voice recognition it is currently on par with human voice recognition. So, if you were writing down what I’m saying, you, on average, should have about 95 percent accuracy. That is exactly where [voice] AI is today. We’ve gotten there, and we’re quickly going to surpass that, and we’re going to be looking at something like 99 percent accuracy – which is all the difference in the world; that’s the difference between hardly ever using it and using it all the time.

So, what’s [important to know] is that this is happening now — and it’s going to be picking up even more quickly. In our report, we are already seeing, amongst our global respondents, that 37 percent of smartphone users are using [voice search or voice commands] at least once a month.

That’s a really healthy number, especially considering that in the UK, Alexa didn’t even hit our shores until the fall — so as a category, it is brand spanking new, and yet already we’re seeing [more than a third using it]. And [intelligent] voice assistants in particular are coming fast and furiously: It’s projected that there are going to be more on the planet than humans by 2021.

In your keynote at Cannes, you identify three of the major trends in consumers’ desires related to voice-activated connected devices. What are they? What are people looking for?

In [the report] we identify nine, but there are three of the nine that we’re really focusing on [talking about] today. People want voice assistants to: ease their cognitive load, help them as a ‘digital butler,’ and to create intimacy.

For the ‘digital butler,’ that just means that they want a useful service. Not just voice for voice sake — they want it to solve problems and they want it to be proactive. The more that technology gets smarter and is more effective, the more that productivity is going to be an expectation.

With easing the cognitive load, what we found is that a major reason for taking on voice technologies is how efficient it makes [users] feel; they talk about how more efficiently they can manage their daily lives. And this makes sense: We’re humans; we’re built to exchange information orally.

Swipe and text, on the other hand, are not intuitive. Actually, we thought, wouldn’t it be cool to test what’s happening in the brain when we’re using voice as apposed to text or swipe. Is it indeed easier, and could we prove this from a physiological point of view? We teamed up a company called Neuro Insight to hook 100 people up to devices called SST — they’re very much like EEG but more accurate and better measure of brain activity.

To sum up, when our respondents took in information by text [their brains] worked far harder than when they took information in by a voice. What the implications of that are is that humans follow the path of least resistance — it’s just in your nature. If you’re sitting there as a consumer and you have two ways of accessing information, ultimately, once you get used to it… you’re going to opt for voice over text because it’s easier.

So, are people actually transacting over their voice-activated devices? E.g. saying ‘Alexa, find me a sun dress’ and then purchasing it that way? Will we start to see more of that?

It’s slower, certainly. Especially through a device like Echo, right now, users are primarily listening to music, they’re asking questions. They might say, ‘send me an Uber to pick me up.’ Set an alarm.

But [the commerce element] is surely coming in terms of trying to get at what brands need to think about for the future. Really, right now, they need to think in terms of being discoverable.

53 percent of global smart phone users are excited by the prospect by their voice assistance anticipating their needs — making suggestions and even going so far as to take action, even buying something on their behalf. Like, if my [digital assistant] knows that Charmin is my favorite toilet paper brand and just orders it for me.

What works really well over voice is just one good answer. That’s scary for brands for the reason I just said: If someone loves Charmin, and the assistant knows that, how, as another brand do you get into that very loyal relationship just that keeps repeat purchasing your favorite toilet paper?

Right. How can brands approach this challenge?

What we are seeing is that there is a couple of options there. Firstly, could there be paid recommendation? Could you, as a brand, pay to have the voice assistant recommend your brand? Especially when there isn’t that bond already formed. It;s not the best option, it’s not maybe the cheapest option, but it is an option that theoretically a brand could pay to get to the top of the list.

But here’s what’s happening right now: Look at this idea of algorithm optimization. It’s like the new SEO; brands [need to get their] underlying data layer ready for consumption by these devices. The question is, how do you build into your product and services such as the voice assistance sees you as the best option? That’s something we think brands should be thinking about right now.

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Salesforce: Email Still Works To Drive Consumer Connections, As Artificial Intelligence Emerges

“Personalization” is the primary focus of marketers in the Age of Amazon, but to actually achieve that one-to-one relationship with consumers, a Salesforce report highlights the value of one of the older forms of digital marketing: email.

Email seems like an odd touchpoint for marketers’ success as social media and messaging apps emerge as key entries for personalized campaigns. On average, the 3,500 global CMOs surveyed by Salesforce in its Fourth Annual State of Marketing report say 34 percent of their budget is spent on channels they didn’t know existed five years ago — and they expect that to reach 40% by 2019.

The reason for email’s continued relevance, even as Saleforce’s survey shows growth for video, texting/sms, and AI, is that email works well to amplify all those channels.

“Over the past two years, we’ve seen an explosion in the use of newer channels like video advertising, SMS, mobile apps, and native advertising/sponsored content,” Salesforce says. “The percentage of both B2B and B2C marketers using video advertising, for example, has risen by triple digits over the last two years.”

Despite its well-established presence in the B2C marketer’s toolbox, email is still growing at a significant rate, Salesforce notes. Email’s number two ranking among marketing professionals surveyed indicates that marketers may be testing new channels in conjunction with proven ones to find combinations that work for their consumers.

The three biggest benefits cited in the report are improved awareness, higher rates of customer engagement, and improved customer acquisition.

“Email provides a window into customer behavior — such as which emails they open, what device they use, and which offers they redeem — making it a natural candidate to leverage alongside other channels to boost personalization and engagement,” the report states.

While email, when combined with other channels, can help reinforce a message and extend reach, using the data available to craft the message can have a bigger impact.

“This is a missed opportunity for most marketers who aren’t evolving messages between email and other channels based on customer behaviors or actions,” Salesforce concludes. “About half (51 percent) of the emails they send are identical messages to what they’ve broadcast in other channels.”

AI’s Coming Impact

The Salesforce State Of Marketing report notes that 51 percent of marketers surveyed are already using AI.

A separate IDC/Salesforce analysis buttresses that report’s view that that AI will be the fastest growing channel in the next few years.

AI-powered CRM activities will drive new efficiencies in how companies sell, service, and market, ultimately expected to create more than $1.1 trillion in new GDP impact worldwide by 2021.

The IDC/Salesforce report says 2018 is poised to be “a landmark year for AI adoption.” More than 40 percent of companies said they will adopt AI within the next two years.

In addition by 2018, IDC forecasts that 75 percent of enterprise and ISV development will include AI or machine-learning functionality in at least one application.

Salesforce has made a particularly big bet on AI with the release of its Einstein project last fall. With Salesforce Einstein, AI capabilities are embedded with “every Salesforce Cloud,” the company has said. Einstein leverages all data within Salesforce—customer data; activity data from social media chatter, email, calendar entries, and e-commerce; social data streams such as Tweets and images; and even IoT signals—to train machine learning models.

“AI is impacting all sectors of the economy and every business,” said Keith Block, vice chairman, president and COO, Salesforce. “For the CRM market—the fastest-growing category in enterprise software—the impact of AI will be profound, ushering in new levels of productivity for employees and empowering companies to drive even better experiences for their customers. For companies embracing AI, it’s critical that they create new workforce development programs to ensure employees are prepared for this next wave of innovation.”

Among the key findings from the IDC report on the economic impact of AI on CRM:

  • AI associated with CRM could boost global business revenues by $1.1 trillion from the beginning of 2017 to the end of 2021.
  • This global business revenue boost is predicted to be led primarily by increased productivity ($121 billion) and lowered expenses due to automation ($265 billion).
  • The types of AI companies are planning to use, or exploring, range from machine learning (25 percent) and voice/speech recognition (30 percent), to text analysis (27 percent) and advanced numerical analysis (31 percent).
  • New jobs associated with the boost in global business revenues could reach more than 800,000 by 2021, surpassing those jobs lost to automation from AI.
  • Underpinning the adoption of AI, 46 percent of AI adopters report that more than 50 percent of their CRM activities are executed using the public cloud.
  • The United States is predicted to lead the way in new business revenue growth due to the economic impact of AI ($596 billion), followed by Japan ($91 billion), Germany ($62 billion), the U.K. ($55 billion) and France ($50 billion).

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How Brands Can Have Authentic Conversations In ‘Smart Cities’

As interconnected rise of shared mobility and connected intelligence has led to the development of “smart cities,” major urban centers are using technology like sensors, smart lights, and digital displays to collect and analyze data. But perhaps one of the most interesting factors in the development of smart cites is the arrival of free, high-speed wifi in public urban spaces — bringing with it significant opportunities for marketers and consumers alike.

As the internet proliferates within smart cities, it’s effectively “reinventing information in a public space,” explained Colin O’Donnell, CIO at Intersection, in a session at Cannes Lions — giving brands, public service [entities], and more the opportunity to respond to how people behave in real time.

“We’re at a moment in advertising where personalization, connecting to someone’s life, is becoming more important,” O’Donnell said. “And then we have this rise in smart cities happening at the same time. That’s huge.”

For its part, Intersection has launched its LinkNYC initiative, replacing outdated phone booths in New York City and turning them into “digital kiosks” with free wifi — which can both take inputs (anonymized data) and push outputs, like real-time infrastructure updates or, yes, a brand’s message.

But now that this capability exists, the questions is: How can brands have authentic conversations in cities — without being viewed as one more interruptor during the daily commute?

  • Use the city as a conversation starter: As always, it’s crucial to focus on user experience: What is the journey that someone is on? Obviously, this can be complicated — but by using real-time data based on where users are accessing the wifi, marketers can customize messages based on time of day (is it rush hour?) or contextual location (is there a train delay nearby?) For example, Intersection ran a campaign for Miller-Coors based on LinkNYC wifi points that informed consumers near a delayed train where their closest bar serving Miller-Coors was — so they could wait out the delay with a drink rather than on a hot train platform.
  • Think outside the box: O’Donnell emphasized the need to ask, “what needs to be done [via technology in smart cities]  that can’t be done already?” This means that it doesn’t truly add value to use mass wifi to simply push out generic banner ads; instead, as in the first example, its about responding to a city’s circumstances in real time. Is this a central tourist area where someone might need help with directions? Or are there a line of locals waiting outside a bar for a concert? This makes a big difference; then use this information to think creatively about what kind of services people might want.
  • Marry geo-data to brand data: “At Intersection, our approach is about marrying the [real-time data we have] to the data a brand already has about its consumers to create something meaningful, useful, entertaining,” O’Donnell said.  “The advertising essentially has to be a product.” In other words, it takes viewing a combination of data points holistically to create messages that are more than ads; success likes in building something so interesting or informative that it adds value in and of itself — not just sells something.

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How Amazon’s $13.7 Billion Whole Foods Acquisition Will Alter The Grocery Space – And Each Other

After shaking up the retail space for the past two decades, Amazon’s $13.7 billion purchase of Whole Foods represents the e-commerce giant’s latest and biggest move to dominate the grocery space.

Over the year, Amazon has shifted significant resources designed to challenge major retailers like Walmart and Target on the grocery front.

This week, Amazon Dash, the three-year-old device for immediate delivery of consumer packaged goods, has revamped its Amazon Dash Wand barcode scanner with the voice-activated digital assistant Alexa built into the device, Techcrunch reported.

December saw the opening of the prototype brick-and-mortar grocery store, Amazon Go, in Seattle. The Amazon Go concept allows customers to avoid the checkout line by simply walking in and leaving — as long as they have an Amazon Prime account that tallies the purchases automatically.

Amazon’s Challenge

“With physical store purchases still accounting for nearly 90 percent of all retail transactions even after a decade of e-commerce growth, Amazon realizes that continuing large-scale growth over the next 10 years as a company will require capturing a big slice of the physical store purchasing market — so as long as Amazon can make do with higher margins and less overhead than traditional retail stores,” Aisle411 CEO Nathan Pettyjohn wrote in GeoMarketing at the time of Amazon Go’s launch.

The purchase of Whole Foods, shows how Amazon plans to capture the the grocery space, leaving traditional markets scrambling more than ever to attempt to match its services and prices.

“The biggest challenge for Amazon now is that they offer so much choice,” says David Berkowitz, Chief Strategy Officer at marketing tech firm Sysomos. “For instance, there’s regular shipping, Prime, Prime Now, Prime Pantry, and Amazon Fresh. The same box of Famous Amos chocolate chip cookies costs $21 via regular shipping and $15.59 via Prime Pantry; these kinds of price differences are common. As Amazon grows more complex, it will need to find ways to become more streamlined, straightforward, and simple.”

In a conversation with GeoMarketing, Berkowitz related a discussion about Amazon with his parents last weekend. He tried explaining the differences among Prime Pantry, Fresh, and regular Prime. By the time he was done, “I had confused myself and essentially convinced them to stick with going to Costco.” (As a bonus, at Costco, you get the $1.50 massive hot dogs, he notes.)

“That there are now so many ways to order these products — website, mobile site/app, Amazon Smile (web/mobile), Dash, various Alexa-powered devices — adds to the convenience for customers — but only makes it more confusing,” Berkowitz says.

“Amazon will need to proactively address this,” he says. “Instead of making me compare how many packs of cookies are in each box and how many ounces are in each cookie, just show me that this same product is available a few different ways and has a few different costs.”

The Impact On Rival Grocers

Even as this deal has Whole Foods continuing to operate its 431 locations under its 37-year-old brand name, the combination of Amazon’s technology will be felt by consumers and rival grocers quickly. (As the Washington Post reports, investors in Walmart, Costco, Kroger, and Target felt the impact immediately, as shares in those companies fell as much as 13 percent with an hour of the acquisition’s news.)

But even smaller grocers, who have been buffeted by on-demand delivery from the likes of Fresh Direct and Instacart, will need to need to rapidly sharpen their own online/offline strategies.

“The Amazon deal demonstrates the need for grocery retailers to move faster in their digital efforts,” says Jeremy Neren, CEO of GrocerKey, a Madison, WI-based provider of e-commerce and tech services for local grocers and chains. “There was already pressure to do so, given the rise in consumer demand and pressure being put on by Amazon, that pressure only increases with Amazon now having a nationwide brick-and-mortar presence to add to it’s arsenal of digital tools to reach consumers and bring them into their overall ecosystem.”

Rival chains and independents should be thinking about finding partners that not only help them implement cutting edge technology, but also help them think about how to operate in a new environment such as e-commerce, Neren adds.

Furthermore, Amazon’s dominance of the voice-activated, Connected Intelligence space with the Echo’s Alexa. As these devices go mainstream, Alexa will certainly provide a direct line to grocery purchases to Whole Foods, placing even more pressure on rival grocers to also find a way ensure Alexa connects them to customers as well.

“It requires an entirely different operational approach than they are accustomed to operating in to serve their customers in-store,” Neren says. “It’s also important to consider that strengthening your digital presence does not simply mean e-commerce, it means providing more touch points to reach consumers — e-commerce is a component of that, but you must also consider how to augment the in-store experience via digital touch points such as value added native mobile apps.”

Can Amazon Bring Efficiency – And Lower Prices – To Whole Foods?

Whole Foods Market first opened in 1980 in Austin. That was two years after its founders started a vegetarian grocery called SaferWay (a play on the general supermarket chain Safeway).

It wasn’t until the 1990s, when the idea of buying organic food caught on outside of bohemian enclaves and the company capitalized on the embrace upscale consumers were making towards buying products that were at least perceived as being eco-friendly and natural.

But after a spate of aggressive store openings and acquisitions, Whole Foods began to be a victim of two separate perceptions: one, that it was too high-priced for lower-income and mainstream grocery shoppers, and two, that it was failing to keep up technologically with its core upscale consumers’ desire for more on-demand and omnichannel shopping choices.

To address some of those issues, in 2015 the introduction of “365 By Whole Foods Market” represented an attempt to attract millennials with a combination of lower prices and app-based, in-store shopping services and loyalty discounts. But with only four outlets at this point, Whole Foods has clearly had trouble scaling that idea.

Bryan Eisenberg, co-founder of B2C marketing consultancy BuyerLegends and co-author of  Be Like Amazon: Even A Lemonade Stand Can Do It, expects the acquisition to solve Amazon’s and Whole Foods’ respective problems in the current grocery space.

“Amazon has been trying to scale its grocery business for years; it’s where so much of our retail spend is,”Eisenberg said. “Part of the problem for Amazon in that space is that to sell groceries, obviously, you need a local footprint.

“The challenge is that Whole Foods has struggled the last few years,” he added. They’re not a technology company. They’re not good at efficiency. But from a brand perspective, they’re still strong, though people do feel they’re overpriced. Amazon will be able to give those stores the technology boost that they desperately need, Eisenberg said. We have 365 By Whole Foods store near us in Austin. But they haven’t pushed that concept far enough.”

The Endless Amazon Loop

The release of the Dash Wand with Alexa, along with announcement that the Prime members who add funds from a bank account to an online gift card will get 2 percent cash back on any Amazon purchase in the form of rewards/points, which can then be used to purchase of more products sold through Amazon.

That ability to entice shoppers to stay within the Amazon shopping system, which includes streaming video and music, is based on the bottom line idea of efficiency, immediate sales fulfillment, and lower prices than any other shop.

“The merger of the two brands will be great in consumers’ mindsets,” Eisenberg said. “Whole Foods does command some brand loyalty – though many people gripe about it being Whole Paycheck – by bringing Amazon to that, the prices have gotten more competitive, but they haven’t been able to shake the idea that they’re an over-priced supermarket. Amazon was able to keep that great ‘people culture’ at Zappos. I think they’ll do the same with Whole Foods, improving the perception of both the culture and the price points.”

From books to electronics to CPG to groceries, the Amazon brand has always been  to allow a user to log-in to its site and apps and get personalized recommendations based on previous purchases. Suggestions are based on what the user searches, and what similarly profiled consumers bought when searching for those products.

“The number one thing you’ll see implemented ASAP: checking out at the register with Amazon Pay,” Eisenberg says. “That’s important because the problem with Whole Foods is that they don’t know if someone walking in is the most valuable customer or the least valuable customer. That’s the same problem Walmart’s had.

“Now, they’ll let people log into their Amazon accounts and they’ll be enabling the ‘endless shelf’ pretty quickly,” Eisenberg says. “Being able to check out and get the data on their customers will have an enormous impact on both companies.”

To realize the potential advantages of owning Whole Foods, Amazon needs to make buying groceries as easy as buying books,” says Berkowitz.

“I get that there are options with Hardcover, Paperback, Kindle, and Audible, so Amazon shows me pricing options, and delivery options too,” Berkowitz says. “Digital options arrive immediately, while physical options have their own delivery times and costs. Amazon now has to do for Famous Amos cookies what it does for John Grisham novels.”

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Why Amazon Took Over Times Square With A 79-Foot Echo

Amazon has unveiled a billboard compete with a 79-foot-tall 3D replica of its Echo speaker in Times Square as part of a campaign to promote awareness for Amazon Music — and and subtly encourage users of its Alexa intelligent assistant to use more integrated Amazon services.

In addition to the 79-foot Echo — the largest installation by an advertiser in Times Square — the billboard reads, “Alexa, play the song that goes… ‘love is all you need.” Per Amazon, “our goal is to increase awareness for Amazon Music,” Josh Fein, head of partner and brand marketing for Amazon Music told AdWeek. “To highlight one of our unique and innovative Alexa voice features, the lyrics search functionality, we chose iconic lyrics that promoted positivity and togetherness through the power of music.”

Indeed, it’s possible that this lyric search functionality might cause more users to turn to Amazon Music to play tunes — after all, who can remember the song name every time? But it also displays a keen awareness that, as voice-activated searches continue to skyrocket, users often ask their Alexa-powered devices to play music from Apple music, Spotify, or other services. As interest in — and ownership of — connected devices of all stripes grows, Amazon is smart to draw a connection between the Amazon Echo and Amazon Music itself, even as the Echo’s functionality remains broad.

Times Square Takeover

There exists also, of course, the simple branding aspect of the installation. Much like when Snapchat did a Times Square takeover without geofilters, Amazon’s display simply aims to be different and to represent the tech giant’s rise to “connected intelligence” importance to both consumers and marketers.

And as OUTFRONT Media — which powered both the Snapchat and Amazon installations — said last year, “we can’t comment on the cost [of ads], but will say there’s incredible brand value in taking over one of the world’s most iconic, high-traffic locations,” Senese said. “OUTFRONT is proud to partner with Snapchat and other fast-growth companies [like Amazon] to provide a unique way to drive huge impact for their business.”

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How VR And Mobility Are Influencing Ford’s Marketing

When the Ford Motor Company made the leap into Virtual Reality in August 2016, its goals were firm and clear: this was not an experiment. It would not be a one-time ad campaign designed to “generate buzz” and then disappear. And Ford’s VR experience would not be housed on another company’s platform.

Ford, along with its dedicated agency, GTB, partnered with integrated production company Tool of North America, to create what they say is the “auto industry’s first dedicated branded VR app and recurring content series.”

“It wasn’t about selling vehicles,” said Lisa Schoder, Integrated Marketing & Media Lead at Ford, during a panel session with the company’s VR allies at the IAB Mobile Symposium. “This was more about building the brand. This was about telling Ford’s story of innovation in our products and engineering development.”

GTB’s Christian Colasuonno, Ford’s Lisa Schoder, and Tool’s Dustin Callif at the IAB Mobile Symposium

VR: It’s Where The Customers Are Going

The deep dive into VR reflects Ford’s recognition of where potential customers are consuming content. Plus, it reflects the desire to move to a mobile-first strategy,” Schoder said.

“The VR app made sense for us as a way to pursue original storytelling through  in a thoughtful way,” she said. “We avoided thinking of this as a ‘one and done.’ This was about building a new channel for us to distribute content on.”

The first piece of featured VR content during the launch was the story behind the Ford GT’s return to the 24 Hours of Le Mans, 50 years after the car’s original victory. The underlying message of the content was to showcase “the power and efficiency in Ford’s EcoBoost engine” as well.

“On top of sharing virtual reality stories about our innovative products, we are also looking to bring mobility issues to the forefront,” Schoder said at the time of the launch. “As we expand our business to be both an auto and a mobility company, we are pursuing emerging opportunities through Ford Smart Mobility.”

From the final installment of the Gymkhana NINE virtual reality and 360-degree video series.

Initial Results Are Strong

The idea for focusing on VR as a branding tool had been “kicking around  the agency for a while,” said Christian Colasuonno, director of Digital Production at GTB.

For example, at another IAB conference last year,  MINI USA’s Lee Nadler showcased that car company’s use of VR as well. The  main goal was not just to share arresting visuals. He wanted to demonstrate that, even though “VR isn’t mass yet,” the ability of immersive, 3D visuals are able to lift brand favorability by 11 percent after generating 4.2 million views.

For Ford, the initial results of its VR efforts were even stronger. The VR experience for Ford’s participation in Gymkhana, the Australian and New Zealand motorsport race, last October drew over 17 million-plus views, as well as drew widespread coverage from media outlets both general and automotive-focused.

During the IAB presentation, Dustin Callif, Tool’s managing partner, noted that Schoder started her career on the engineering side and then moved to marketing.

“The story we’re telling is how that reputation for performance can be stepped up into something larger for the brand,”Callif said before turning to Schoder. “Is [this use of VR and mobile] analogous to the relationship between the auto-enthusiast books and the mainstream advertising were back 20 years ago? Is this an advanced version of that?”

“Maybe,” Schoder responded. “At least in the way we approached it, if we were saying we wanted to deliver stories with the Ford brand onstage, those key moments are in our performance portfolio. And we also knew that when we dug into the audience insights with our performance fanbase, we knew they were largely into tech and identify as early adopters. Now, we’re looking to go beyond performance to see what other stories we can tell to a broader audience.”

Smart Mobility And Connected Cars

Following the panel, we caught up with Schoder and asked her about other emerging channels that can offer both a branding experience as well as drive performance to local dealers.

While the IAB panel discussion was about the role of Ford’s VR app as a branding and content distribution tool, does Schoder see VR as something that can work at the local dealership level to create an omnichannel experience intended to drive sales?

It certainly could be,” Schoder told GeoMarketing. “This particular app was initiated to build brand stories. We’re also looking at VR within the shopping experience. It could provide education about new features, for example, ‘How do you experience the all-new Expedition from the inside-out?’ That is certainly a part of how we might approach the overall use of the VR technology.”

Aside from VR, Ford is also exploring ways of using voice-activated, artificial intelligence-powered digital assistants like Alexa or Siri or Okay Google as part of a wider smart mobility strategy, she noted.

“We want to understand how to work with Amazon on Alexa, so that if someone asks a question about one of our cars, they can have the right answer, the best answer for them,” Schoder said. “We are already working with Amazon on our connected vehicles and see how Alexa fits into what we’re doing and what our customers want. For example, it would be exciting for someone to say, ‘Hey Alexa, start my car.’ The car is a piece of the Internet of Things ecosystem and we want to explore all of it.”

 

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