How Marketers Can Use Location Data To Find Brand Affinities Among Holiday Shoppers

With everything from voice search to omnichannel ad targeting changing the way brands attract holiday shoppers, the use of location data to make the connection between brick-and-mortars and consumers.

But figuring out the best ways to use location data remains an issue. While retailers pay attention to online browsing patterns, consumers still make the majority of purchases in stores, and how they move in the physical world influences their path to purchase, notes Ocean Fine, VP, Agency and Strategic Accounts at geo-data specialist Factual.

One of the things that location data does best is find the unusual shopping patterns of mobile consumers so that brands can anticipate who, when, and where shoppers might be more receptive to a geo-targeted ad.

Among the things Factual found at the start of the holiday shopping season:

  • 3.6 percent of Target customers visit a Starbucks before, while 6.3 percent visit a fast food restaurant
  • 4.6 percent of Walmart customers visit a gas station, while 4 percent visit a Walgreens
  • 9.9 percent of Macy’s customers visit a clothing and accessories retailer

“This kind of data could help retailers understand where they should focus ad dollars — Walmart could advertise deals at gas stations, or Target could partner with fast food restaurants,” Fine says.

GeoMarketing: Does Factual’s data have anything to say about the state of retail at the start of the holiday season? Was this a strong opening for retail? Or too soon to tell?

Ocean Fine: Per Adobe, Black Friday and Cyber Monday 2017 were among the highest sales days of all time – definitely a strong opening for retail! What remains to be seen is how sales will hold up throughout the season and, most importantly for brand marketers, how well their campaigns perform to drive people to purchase, both in store and online.

What does this data say about affinities between brands in terms of being able to reach a store’s likely shoppers before they’re in a retail location?

Understanding where shoppers go before and after they visit particular stores, as well as their brand affinities, helps marketers paint a more complete picture of their habits and interests, and better design advertising experiences that will elicit a positive response. Messages that are personalized and make sense in context are preferred by consumers, and a clear map of the consumer journey allows marketers to create them.

Are there any particular ways that retailers should look at location/mobile data when trying to figure out when as well as where its best to reach potential customers?

Mobile is a primary point of purchase for consumers, now more than ever. Using location-based behavior data combined with the insights derived from mobile purchase behavior, retail marketers can understand the entirety of the path to purchase, allowing them to tailor relevant content and achieve the marketing trifecta, targeting the right consumer, with the right message, at the right place. Marketers are able to see patterns in their consumers’ place visits over time, make inferences about their interests and build custom audience segments to ensure they’re reaching those who are interested.

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What Do Brick-And-Mortar Stores Face From Digital’s Role In Black Friday And Cyber Monday Shopping?

While Cyber Monday is still a bit too early to get the full scope of consumers’ online and offline shopping activity, the initial data appears to suggest that  brick-and-mortar brands are gradually finding benefits from omnichannel strategies.

“Shoppers no longer need to beat a path to stores on Black Friday,” notes Rick Kenney, head of Consumer Insights at Salesforce Commerce Cloud, in a blog post. “With an astounding 24 percent digital growth on Black Friday, the tide has officially shifted online as consumers are unshackled from the doorbuster sales of year’s past, and are free to shop on their own terms.

“What’s defining this holiday shopping season? Mobile, personalization and tremendous overall digital growth,” adds Salesforce’s Kenny. “In fact, Black Friday will retain its crown as the biggest digital shopping day of the season.”

For one thing, retailers’ embrace of personalization is having an impact on brick-and-mortars, even now, says Kenny, who states that even though just 6 percent of shoppers engage with product recommendations, those shoppers account for 30 percent of all revenue.

Preliminary numbers from other analysts bear that out.

For the second year in a row, analyst firm ShopperTrak says that Black Friday (i.e., 11/24/17 12 AM – 11:59 PM) brick-and-mortar retail traffic has held steady YOY, as ShopperTrak data shows a less than 1 percent decrease in YOY Black Friday shopper traffic numbers. That’s fairly similar to 2016’s YOY Black Friday results, as ShopperTrak data showed that Black Friday 2016 visits remained “flat” with “no statistically relevant increase or decrease in traffic levels, when compared to 2015.”

Black Friday Planning And Beyond

While it’s obvious that online shopping still has plenty of room to grow, even during the holiday season, all signs show how that purchase activity is accelerating.

What’s less clear: to what extent regular omnichannel shopping played in Black Friday and Thanksgiving weekend purchases as brands look beyond Cyber Monday deals. That said, a National Retail Federation survey offered some insights as to how the balance between digital and physical would take shape at the start of the holiday shopping period.

In general, the survey indicated that 69 percent of Americans — an estimated 164 million people — planned to shop during Thanksgiving weekend.

Of those considering shopping the long holiday weekend, the survey found that 20 percent plan to shop on Thanksgiving Day (32 million) but Black Friday will remain the busiest day with 70 percent planning to shop then (115 million). A substantial 43 percent are expected to shop on Saturday (71 million), with 76 percent saying they will do so specifically to support Small Business Saturday. On Sunday, 21 percent expect to shop (35 million) and 48 percent are expected to shop on Cyber Monday (78 million).

Of those shopping, 66 percent said they’re doing so to take advantage of deals and promotions retailers will offer, while 26 percent cited the tradition of shopping over Thanksgiving weekend and 23 percent said it’s something to do over the holiday weekend, the NRF said, citing its annual survey conducted by  Prosper Insights & Analytics of 7,439 consumers during October.

Another 23 percent said they would start their holiday shopping on Black Friday.

“While the utility of the weekend will continue to draw shoppers into stores and online to efficiently and inexpensively check off their lists, we’re also seeing consumers report tradition and the opportunity to partake in holiday cheer as reasons for shopping, too,” Prosper Principal Analyst Pam Goodfellow said. “By now, people know what sort of deals they can expect to see during the weekend and are budgeting for them accordingly, and in many cases expertly.”

“For Gen Z, the holiday shopping weekend is a can’t-miss opportunity,” Goodfellow said. “This group overwhelmingly sees in-store shopping as a valuable way to connect with others, be it friends, family or store associates at their favorite retailers.”

Real-Time Shopping Data

In its look at the SMB commerce platform Shopify’s view of activity in its network, which represents 500,000 businesses across 175 countries and is trusted by brands such as Red Bull, Nestle, Rebecca Minkoff, Kylie Cosmetics, the company’s real-time Black Friday/Cyber Monday public database has found over $320,000 sales occurring every minute.

In terms of categories, apparel is in the lead of shopper activity, with 1.4 million items bought, followed by accessories with 915k products purchased since Black Friday. Games in last place with 36,000 items bought, with food, electronics, cosmetics, shoes, and housewares ahead.

A Sunny Shopping Forecast

And after a recent spate of devastating weather events, conditions around the U.S. have been fairly favorable to brick-and-mortar retailers and their customers. Fung Global Retail Tech cited Planalytics’ analysis, which noted a lack of rain and snow across the US encouraged consumers to visit retail stores over the Thanksgiving–Black Friday period. Thanksgiving 2017 was the driest Thanksgiving since 2014 and Black Friday was the driest since 1999. The four-day Thanksgiving weekend was the driest in over 20 years.

Cold temperatures in major markets in the eastern US benefited sales of seasonal categories such as coats, scarves and gloves. Most eastern markets, including New York, Boston and Baltimore, as well as Chicago, experienced their coldest Thanksgiving since 2014, according to data from Planalytics. At the Ann Taylor store we visited, winter categories featured strongly: there were pink and plaid day coats at $125 and $130 (after 50 percent off) that combined sharp pricing with on-trend fashion for a strong value proposition.

Meanwhile, western markets saw their warmest Thanksgiving weekend in many years. Cities such as Los Angeles, San Francisco, San Diego, Denver, Salt Lake City, Phoenix and Las Vegas were roughly 10-to-15 degrees warmer over the weekend than the same period last year.

“Traffic and stock levels were decent overall at the stores we visited,” said a Fung report based on analyst team visits to 33 stores in six U.S. markets from Thanksgiving evening and Black Friday.  The Fung analysts went to 18 specialty retail stores, seven department stores, six discount stores and two off-price stores, variously located in Manhattan, Southampton and Staten Island, New York; Las Vegas, Nevada; Pittsburgh, Pennsylvania; and Paramus, New Jersey.

“Traffic and inventory levels were satisfactory overall,” Fung reported. “Among the stores we visited, Walmart, Nike and Best Buy were the biggest winners in terms of traffic on Black Friday, and they offered excellent traffic control and in-store experiences.”

A Mobile Tipping Point

Walmart, Nike and Best Buy appeared to be the biggest winners in terms of traffic on Black Friday, Fung added, noting that the stores offered excellent traffic control and in-store experiences.

“At the Walmart store we visited, yellow tape and extra staff helped guide customers at checkout,” Fung said. “Nike’s Manhattan flagship store was very crowded when we visited, and customers were concentrated in the sports jersey and running shoe areas. In-store traffic at popular teen destinations such as Forever 21, Hollister and Victoria’s Secret seemed higher than last year on Black Friday. Traffic levels at department stores we visited varied. At Saks Fifth Avenue, traffic appeared to be solid, but we saw fewer customers at Macy’s, Bloomingdale’s and Nordstrom.”

For the most, part, the central story this shopping season is one that amplifies the broader consumer trend in using mobile to research, discover, pick-up, and send for via delivery.

According to Adobe, this holiday season is set to cross a “tipping point” in mobile usage versus PC.

“While desktop purchases still account for two-thirds of revenue, mobile is the starting point for shoppers: for the first time, consumers will visit retailer websites from mobile devices more than desktops,” Adobe’s report states.

High-growth companies see more smartphone visit and revenue growth than below-average growth companies (23 percent and 32 percent respectively), Adobe’s report adds.

Skyhook’s Black Friday foot traffic study found that Walmart, Target and Best Buy beat Macy’s, Kohl’s and Sears for volume of in-store foot traffic over Thanksgiving and Black Friday. The attached chart details what foot traffic looked like at these six retail brands on the week prior to Black Friday – and on the day itself. It also shows that peak in-store shopping took place late on Thursday afternoon and then again just past noon on Black Friday. (See image below).
Source: Skyhook

It’s a message retailers have been absorbing to a greater degree lately. An earlier NRF survey looking at consumers’ preferences found that 50 percent say that free shipping/free pick-up options are the most important factor in choosing where to shop this season — meaning that retailers must deliver the ease and affordability at checkout time that shoppers have come to expect from Amazon if they want to compete.

“It seems that retailers are striking a happy balance in determining their online and in-store strategies for shopper engagement,” says Brian Field, director of Advisory Services for ShopperTrak. “Shoppers will still flock to physical stores on Black Friday to score a good deal, or as part of their tradition, but, many consumers no longer feel compelled to shop in stores on Thanksgiving Day.”

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Are Thanksgiving Blue Laws Good (Or Bad) For Retailers?

Leaving aside the debate over whether or not it’s unkind for retailers to make people work on a day like Thanksgiving, it’s worth noting the potential impact on business at the start of the crucial holiday shopping season.

In a comparison of states that impose “Blue Laws” preventing sales on Thanksgiving Day versus ones that leave that decision up to store owners, Foursquare data indicates that retailers in the former category appeared to be placed at a disadvantage. (It’s worth noting that New York was excluded from Foursquare’s look at 2016 retail data and that most of the Blue Laws states were in New England, which tends to have harsher weather at this time of year than other parts of the country.)

“While the three Thanksgiving Blue Law states [Maine, Rhode Island, and Massachusetts] saw an average foot traffic lift of 23 percent over the Thanksgiving weekend (Thursday through Sunday) in 2016 compared to a baseline weekend — the rest of the Northeast (Vermont, Pennsylvania, Connecticut, and New Jersey) with no legal restrictions saw a greater average foot traffic lift of 35 percent the same year,” Foursquare CEO Jeff Glueck said in a blog post. “This showed us that retail performance over the full weekend was significantly higher in states that allow shopping on Thanksgiving Day.”

Pent-Up Demand, Missed Opportunity

Foursquare’s data, which looked at explicit check-ins (from its Swarm app) and passive visits (from both its Flagship discovery app and Swarm over Thanksgiving weekend 2016) indicated that “shopping between the hours of midnight and 3 a.m. accounts for only 3 percent of the total US foot traffic to the top 500 retailers on Black Friday.”

But in a sign of the pent-up demand for deals, the store traffic in those same middle-of-the-night hours reached as high as 14 percent in Maine, followed by 9 percent lift in visits in Massachusetts, and 5 percent in Maine.

“We found another, even stronger indicator that these shoppers are highly motivated; in New Hampshire, 29 percent of retail traffic on Thanksgiving Day is made up by visitors from Massachusetts, Rhode Island, and Maine (a significantly higher proportion than an average Thursday),” Glueck said.

But pent-up demand is easily satisfied, as New Hampshire’s Blue Law State neighbors can attest: 60 percent of these same visitors did not make Black Friday shopping visits the following day back in their home state retail stores.

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