The Omnichannel Challenge: When It Comes To ‘Click-And-Collect,’ US Retail Lags

As Amazon continues to open fulfillment centers to get orders to customers even faster, the offer of shop online and in-store/curbside pickup by U.S. retailers is far behind their global peers.

Only 29 percent of  major U.S. retailers offer click-and-collect services — a significant gap from the 67 percent of their UK counterparts, citing an OrderDynamics study of more than 1,000 retail websites.

The retail brands with at least 10 brick-and-mortar stores in the U.S., the UK, Australia, Canada and the three Nordic countries of Sweden, Finland and Norway. US retailers represented about a third of the sample.

Even more troubling than the comparative lack shop online, pick-up in-store offerings, the retailers that do have that capability aren’t doing a lot to let customers know about it.

Just 38.5 percent highlight shop online/in-store pickup on their homepage, versus more than half to two-thirds of retailers in each of the six other countries in the study.

“This means that the American retail environment is still in the early phase of omnichannel adoption,” the report said. Despite the US being a world leader in marketing, it said, it is the worst at advertising in-store pickup offerings.

One of the issues retailers appear to have is the disconnect between online and brick-and-mortar sales. Too often, retailers’ departments remain “siloed” into two areas.

For example, the study found that when it comes to free-shipping offers, the U.S. actually leads: 67 percent of US retailers offer free-shipping, compared to 55 percent in the Nordics region.

Walmart is even making free-shipping a big part of its e-commerce marketing effort.

Walmart SVP and CMO Tony Rogers speaking at at the ANA’s Masters of Marketing conference this week, discussed the retail giant’s forthcoming holiday advertising which highlights its free-shipping.

“Free shipping two-day for orders over $35,” said Rogers, Adweek reported, adding a dig at Amazon Prime’s subscription delivery program. “No membership fee because, you know, we just don’t think you should have to pay $99 a year for the privilege of free shipping.”

 

 

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What Location Strategies Are Major Brands Using To Make Retail Relevant Again?

The challenges of omnichannel retail are well known by major brands and while the situation is largely a “glass half full,” there are signs that marketers’ focus is sharpening when it comes to using location data to shape the way they understand and reach their customers.

That’s the gist of a report by location data provider Blis, which rounded up thoughts by marketing executives at Verizon, Microsoft, Coca-Cola, Best Buy, DSW and Chili’s. It explores the current thinking by retail marketers on how to leverage location data to bolster their marketing strategies.

The report, Transforming Customer Engagement with Location-Based Technologies, finds that brands feeling confident in their ability to employ geo-data to drive foot traffic.

Executives at of DSW and Coca-Cola in particular emphasized location data’s ability to allow for greater personalization and context when communicating with their customers, while Microsoft and Verizon touted location insights as providing the connective tissue among a range of media channels as well as emerging technologies such as artificial intelligence/machine learning, voice-activation and Connected Intelligence, and smart homes/cars.

The bottom line: location is essential to communication between brands and consumers in terms of promoting discovery and engagement.

John Carroll, VP General Manager, E-Commerce, Coca-Cola North America: “It’s important that the linkage between what we’re trying to communicate with our brand to what the consumer is doing contextually is clear. It’s also important that we have the opportunity to really drive an experience online, whether through video, creative banner ads, or creative copy. We want to have a brand-building experience online and to drive purchase closer to the shopper.”

Wade Allen, VP Digital Guest Experience & Analytics, Chili’s (Brinker International): “Considering the way consumers use their mobile phones and the need for immediacy in our society, you can’t help but question whether or not we should shift more money out of television advertising and into the digital world. I don’t know what the right percentage is, but my belief is we can’t follow the 80/20 or 90/10 model anymore. Instead, we need to get closer to a 60/40 or 65/35 model with the smaller amount being digital.”

Shari Rossow, VP Retail Operations, Best Buy: “We’re trying to make it easier for customers to start and stop anywhere. It’s now a basic expectation for how we all shop.”

Beth Rick, Sr. Director, Transformation, DSW Inc.: “If you had every single piece of customer data, you could organically become a part of their lives wherever they are. You would be in the fabric of everything, because you would know where they’re located, what information they’re looking at, how they’re using it, what they’re interested in, what their behaviors are; and at that point in time, we would just try to make shoes part of their life… They would just think about shoes and DSW is the place they would go.”

ShiSh Shridhar, Director, Business Development, Data, Analytics & IoT, Microsoft: Retail Sector: “That physical experience is one aspect of it: digital and physical should complement each other. The other aspect is that there will be a lot more channels embedded into how we buy. There are a lot of capabilities available today through things such as cognitive services and artificial intelligence that are going to be used. For instance, the phone camera becomes a channel. We will be capable of pointing a phone camera at a product such as a pair of shoes someone is wearing, and the phone can identify what those shoes are, show prices at different retailers, and then we can buy with a single click.”

Jamie Crespi, Blis VP Marketing

We also checked in with Jamie Crespi, Blis VP Marketing, for her view of the questions posed by the company’s report.

GeoMarketing: What are retailers doing to engage with consumers more effectively in the digital space?

Jamie Crespi: As the findings of the report shows, personalization is top of the retailers’ agenda to get through to consumers across multiple digital touchpoints. It’s important that they use the abundance of data available to them to make their targeting as relevant and interesting as possible, while ensuring they’re serving the right ads on the right devices at the right moment.

This is where location data comes in, as it helps retailers to better understand their customers (and potential customers) and brings the physical and digital worlds ever-closer together. Location data is one of the richest forms of data available for retailers looking to engage with consumers more effectively. It provides brands with contextual insights while allowing them to understand the impact of ads on their consumers behaviors. Brands using location data are able to efficiently target potential customers and drive them in-store.

What is the business value of leveraging location data, and what are the potential risks?

Accurate location data means great message relevancy for brands which leads to a higher likelihood for consumer engagement. At the end of the day, reaching the right consumers with the relevant creative to drive an action is really what it’s all about. Additionally, as our contributors like ShiSh Shridhar of Microsoft and Beth Rick of DSW point out, driving in-store foot traffic is a major bonus to leveraging location data. It’s important to think about location data as an insights and planning tool, not just a means by which to deliver advertisements.

To many, leveraging location data (and leveraging it in a more robust way outside of just geofencing) is still a relatively new concept, but it’s quickly becoming absolutely integral for businesses with brick and mortar locations. Their businesses are reliant on people visiting their stores – for this reason, there’s no reason not to test it.

Source: Blis

How will location-based technologies become part of a greater digital strategy?

David Garcia, Director of Experience Innovation at Verizon, makes a really interesting point when he says how exciting the idea of converging location services with other emerging techs such as AI and IoT are.

At Blis, we’ve already started to use machine learning to predict where consumers will go to offer richer insights to brands and allow for better planning. Being able to accurately identify people who we know are either highly likely or definitely going to visit a store is invaluable as it eliminates waste in spend and increases campaign performance; and this is something we can do with the help of AI.

As David puts it, when these things start to click, you’ll see things you couldn’t have imagined. We believe it’s crucial to keep innovating to better understand consumers.

What trends will have the most impact on location-based advertising in 2018 and why?

One of the biggest developments of 2017 has been a shift towards Cost-per-Visit (CPV) models of measurement. We were early adopters back in April, and have begun to charge clients based only on the people that actually visit target locations. The response has been great as it reduces the risk for advertisers who aren’t sure if they’re getting good returns on their investments and puts the onus back on the vendors. We feel this movement will only grow and develop into 2018, as more platforms like ours move away from click-based metrics and towards models which foster more trusting relationships between vendors, agencies and their brands.

What impact will voice activation/intelligent assistants like Alexa, Siri, Okay Google have on the way geo-data is used for marketing and advertising?

This again ties in with David’s point, and it’s certainly going to be exciting to see how these types of technologies will combine. Ever since they’ve come onto the scene, brands have been wondering how best to harness their potential. One of the key benefits of these services, like Siri & Okay Google, being on your handheld devices is that you can use them when you’re out and about. I’d bet that plenty of voice searches are relevant to their location, as you may need to be reactive when looking for a business or service and this is when your intelligent assistant knowing where you are will come in handy. It also gives local businesses new opportunities to pick up customers.

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Amazon To Open Its First Fulfillment Center In New York To Expand Faster Delivery

Amazon is moving aggressively to expand its promise of near-immediate delivery and physical pick-up options for its online shoppers by rapidly opening up fulfillment centers in major cities.

“We are excited to bring our first fulfillment center to New York and work alongside the state’s incredible workforce,” said Sanjay Shah, Amazon’s vice president of Customer Fulfillment, in a statement. “The support of local leaders has been instrumental in our ability to come to New York, and we are grateful for the welcome we’ve received to bring thousands of new jobs with benefits starting on day one.”

The fulfillment center comes a few months after the opening of Amazon opened its first brick-and-mortar bookstore in New York City as a showcase for its online/offline ambitions.

Amazon On The Move

Amazon employees at the 855,000-square-foot Staten Island fulfillment center will work alongside robotics to pick, pack and ship customer items such as household essentials, books and toys.

With the creation of its latest fulfillment center, which is coming to Staten Island, NY, coupled with the closing of its $13.7 billion acquisition of Whole Foods, Amazon’s pressure on established brick-and-mortar businesses’ omnichannel strategies is apt to be felt even more acutely as the holiday season approaches.

Over the summer, Amazon has expanded its discounts and two-day shipping with its Prime membership option, and has just heralded its Instant Pickup option, retailers have turned to one advantage they still possess — at least for the moment — in relation to Amazon: proximity to their customers and known inventory, which makes it possible to offer the ultimate convenience of letting someone click “buy” and then having it brought to them within a few hours.

Meanwhile, Amazon’s instant-pickup has already begun in Los Angeles, Atlanta, Berkeley, CA., Columbus, Ohio, and College Park, Md. Initially, the items available with Instant Pickup include snacks, drinks and electronics, as well as some of Amazon’s most popular devices.

Amazon’s latest offering represents an expansion of the same-day pickup service at the 22 locations it began opening in 2015. These same locations will serve as Instant Pickup depots for Amazon Prime customers.

While available for free to Prime and Prime Student members, the program strikes at the heart of what has so far remained brick-and-mortar brands’ clear advantage over e-commerce: immediacy.

Omnichannel Pressure

New York represents one of its biggest tests.

Rivals like Target have been getting ready for the challenge. For example, Target’s purchase of San Francisco-based transportation tech company Grand Junction last month is designed to better position it against Amazon’s speedy delivery.

Grand Junction’s software platform is used by retailers, distributors, and “third-party logistics providers to manage local deliveries through a network of more than 700 carriers

Target and Grand Junction have currently been working on a same-day delivery pilot program for the Target store in New York’s Tribeca neighborhood. By 2018, Target plans to roll out same-day delivery to unspecified major cities, said Arthur Valdez, Target’s executive vice president, chief supply chain and logistics officer.

Target’s move follows similar tests by Walmart. In addition, same-day, app-based grocery delivery platform Instacart has lately been racking up partnerships with Costco, Key Food, CVS, and others.

The trend towards same-day delivery is becoming a wider retail imperative not reserved for discount shopping and food service.

Earlier this month, Office Depot announced  its same-day delivery program. The initiative kicks off on August 28 in Atlanta, Georgia and Los Angeles, California; and on September 6 in Ft. Lauderdale/Miami, Florida.

“With our new same-day delivery and our omnichannel approach, we are utilizing our retail stores as assets and part of our supply chain to give our customers the best possible experience,” said Office Depot CEO Gerry Smith.

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Who Should Walmart And Amazon Acquire Next?

As Walmart and Amazon rush to build up their respective online/offline commerce strategies, it’s safe to say that key acquisitions will play a part in efforts to keep pace, if not out-pace, the other as “the ultimate retailer” in consumers’ minds.

For example,  within the last three months, Amazon made its $13.7 billion bid to acquire Whole Foods, while Walmart bought e-commerce platforms Jet and Bonobos, speculation swirled around these two retail behemoths each striving to become the ultimate shopping destination—both on and offline.

Foursquare has come up with a list of some obvious acquisition targets that would fit Walmart’s and Amazon’s intersecting and unique needs in their drive towards retail hegemony.

But by basing its selected brand targets based on its foot-traffic data covering 2.5 million Americans, Foursquare CEO Jeff Glueck makes the case for where the best complements exist for each company in a blog post.

“Amazon and Walmart would both be wise to consider Nordstrom and Warby Parker,” says Glueck. “Amazon should consider Lowe’s; Walmart should look to Ulta Beauty.”

Among the analysis of each brand’s needs according to Foursquare:

  • Amazon prefers brands that foster an even deeper relationship with its current shopping base, and investing in challenger brands that are smaller and more upscale than in-market competitors
  • Walmart is playing catch-up in e-commerce, and so is looking to broaden its consumer reach and digital footprint, and develop delivery efficiencies.
  • Both companies are interested in attacking verticals that have proved resistant to e-commerce penetration.
  • Both companies want to refine and experiment with a “showrooming” strategy. They are also both interested in the same consumer: high-net-worth GenX and Millennials.
Source: Foursquare

Target Number 1: Nordstrom

If Amazon and Walmart aren’t fighting over Nordstrom by now, perhaps they should, Glueck says.

Amazon, in particular, needs to connect with the “right shoppers” in the physical world. And considering Amazon’s instant-pickup is initially limited to the 22 locations it began opening in 2015, it needs to expand its placement to actual stores beyond its Whole Foods connection.

“Amazon’s latest acquisition, Whole Foods, and Nordstrom have an overlapping customer set: Foursquare’s data shows that Nordstrom shoppers are almost 2X more likely to shop at Whole Foods than the average consumer,” Glueck says. “So an Amazon-owned Nordstrom chain would deepen Amazon’s relationships with its expanding core base.”

For Walmart, acquisitions are intended to bring in new customers. Nordstrom and its discount subsidiary Nordstrom Rack would likely broaden Walmart’s base to more upper middle income shoppers.

“[Nordstrom] consumers aren’t frequent Walmart-goers,” Glueck says, citing Foursquare’s foot traffic data showing they are about 55 percent less likely to go to Walmart than the average American.

“What Nordstrom does have is a bona-fide track record as well as a healthy concentration of Millennials and females, a nice addition for Walmart to balance out the the purchase of Bonobos, which has a wider male reach,” he says. “Walmart has to pursue familiar verticals that have deep online footholds. And Nordstrom has seen tremendous success versus comparable retailers in developing its e-commerce presence.”

As for Nordstrom Rack, it tends to rank number two in store visits and sales after the discount category leader T.J. Maxx.

“We found that Nordstrom Rack has actually lost more than 2 percent of its visit share to competitive discount retailers in the last two years. Amazon’s ability to slash prices further could lift the competitor brand, and give Amazon a strong foothold into the brick-and-mortar discount market. Imagine if everyday was Amazon Prime day at Nordstrom Rack…”

Source: Foursquare

All Eyes On Warby Parker

Showrooming — the act of comparing prices and products on e-commerce site at the same time one is browsing in a physical store — is the scourge of all brick-and-mortar retailers. And that’s largely thanks to Amazon’s all-encompassing inventory.

Since Warby Parker started its eyeglass sales as an e-commerce platform, it has used its online-only origins to help develop a strategy to combat showrooming at its 46 boutiques. Plus, Warby Parker is currently planning to open 25 more shops, a clear indication that its clicks-to-bricks program is working.

An Amazon purchase could further enhance Warby Parker’s distribution, while reducing its shipping costs.

Plus, consider Warby Parker’s strength with Millennials — over half its shoppers (55 percent) are in that age demographic, which over-indexes at luxury brands including Bloomingdales, Williams Sonoma and Lululemon according to Foursquare data.

Moreover, Warby Parker has similar shopper profiles and significant customer overlap with Whole Foods, as Foursquare data shows that 80 percent of Warby Parker customers also shop at Whole Foods.

Walmart certainly desires those Millennials and by acquiring Warby Parker, it would continue to trajectory its been on with the purchases of Bonobos and Jet.com — two very different offerings from Walmart’s typical shoppers.

“Though we’d expect Walmart to keep Warby as a stand-alone brand, if Walmart ever needed an infusion of new shoppers and/or Millennials into its stores, one way to do so—and quickly—would be to add Warby Parker services and eyeglasses into Walmart’s existing vision centers,” Glueck says. “In addition to being more than half Millennial, Warby Parker customers are 80 percent less likely to visit a Walmart versus the average American—so they’d be fresh eyes on Walmart’s existing inventory.”

 

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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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Location Acquisition Race Heats Up, As NinthDecimal Buys MoLOGIQ

Amid a spate of location-centric deal-making, NinthDecimal has acquired MoLOGIQ, a mobile audience platform, in a bid to accelerate the building of new data programs to meet the demands of marquee brands and agency partners.

As part of that effort, which is largely focused on cross-screen attribution, the the company is also forming NinthDecimal Labs, a new group dedicated to advancing the next generation of location-centered marketing solutions.

The MoLOGIQ audience platform processes “billions of data signals” from its software, public demographic data, land parcel information, and voter registration rolls.

Its SDK is present in more than 50 million unique devices, which provides rich data signals for both Android and iOS. MoLOGIQ’s geo-spatial infrastructure connects the mapping of users’ devices to their household addresses in a privacy-friendly manner, thereby enabling the bridging of online and offline data sets to drive a range of marketing applications.

Over the past three years, Cupertino-based MoLOGIQ has mapped 50 million devices to household addresses, enhancing the reach and scale of NinthDecimal’s own Household Graph.

“Clients are increasingly asking us to solve problems that go far beyond the traditional uses of location data, especially those related to omnichannel ROI measurement capabilities,” said Mike Fordyce, CEO of NinthDecimal. “In our industry, rapid innovation and time to market is critical for success. As a part of NinthDecimal Labs, the MoLOGIQ team will play an important role in accelerating the development of new solutions.”

GeoMarketing: Why did NinthDecimal decide to acquire, as opposed to partner, with MoLOGIQ?

Mike Fordyce: In order to have success in our industry – which is constantly evolving — we recognized a long time ago that innovation, as well as being flexible and nimble to change, needed to be a part of our DNA. Acquiring MoLOGIQ allows us to quickly incorporate their products and data technologies with no limitations. Just as important is the ability to integrate the MoLOGIQ team into the NinthDecimal culture – increasing the level of collaboration that goes beyond a traditional partnership.

That said, we also value the many partnerships we have throughout the industry with other leading companies as they too are key to our effort in addressing the growing demand from our customers and the broader market.

What specific offerings of NinthDecimal does MoLOGIQ complement? Does it enhance or complement NinthDecimal’s attribution capabilities? How?

The addition of MoLOGIQ both complements and expands our leadership in several different ways, including:

  • MoLOGIQ’s digital visualization technology builds upon NinthDecimal’s existing visual data solutions for offline attribution measurement and insights.
  • Its 50 million devices mapped to household addresses, enhances the reach and scale of NinthDecimal’s own proprietary Household Graph.
  • The combination of MoLOGIQ’s SDK, location data, and device data further enhance NinthDecimal’s measurement solutions, providing the industry with the largest measured audience for offline attribution.
  • MoLOGIQ’s DMP technology will allow NinthDecimal to expand its data management capabilities as more and more customers are looking to NinthDecimal to help them manage their data.
  • MoLOGIQ’s SDK presence in more than 50 million unique devices will help power NinthDecimal’s audience intelligence platform, Location Graph as well as its industry leading offline attribution solution, Location Conversion Index.

Does the timing of the acquisition say anything about the larger state of the location/mobile ad tech space? Or was this simply a good opportunity for NinthDecimal?

From an industry perspective, it’s an incredibly exciting time. The changes being driven by location intelligence are more disruptive than ever. As advertising becomes increasingly data driven, major brands across all industries are completely reorganizing and changing their focus to capitalize on it. From programmatic to people-based marketing to the digitalization of all media.

For NinthDecimal, the results we are delivering have not only led to triple-digit growth in our data and measurement lines of businesses but also created an increased demand from our partners. More and more they are looking to us to help them solve competitive and growth challenges that go well beyond the traditional uses of audience intelligence.

This is the driving force behind NinthDecimal Labs as we look to not only address today’s business opportunities but also help capitalize on those that emerge in the future.

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Walmart Paves The Way For Grocers With Higher Paid-Search Spending

In addition to its recent acquisitions of e-commerce platforms Jet.com and Bonobos, Walmart is already fighting back against Amazon’s burgeoning challenge in brick-and-mortar grocery space, as the Bentonville retail giant led all paid search advertisers in spending over the past year, a study by marketing platform AdGooroo found.

Walmart’s search spending jumped by more than 1,500 percent from 51,000 to an estimated $858,000 on “on 124 non-branded grocery store and grocery delivery” keywords in Google search from June 2016 through May 2017, AdGooroo said. Among the terms covered in AdGooroo’s analysis were  “grocery store,” “groceries delivery,” “grocery delivery service,” ‘online grocery shopping” and “supermarket.”

The retailer’s moves seemed to coincide with other efforts to support its position as the nation’s largest grocer. In addition to its purchase of Jet.com, Walmart has struck delivery partnerships with Uber and Lyft. It’s also expanded its curbside grocery pickup service as many other retailers have, such as Target.

The sudden and significant rise in Walmart’s search spending could also be a sign of Jet.com’s influence on the retailer, which Walmart acquired in September last year, spent an additional $82,000 on the keyword group during the period, up from just $3,000 in the 12 months preceding June 2016.

Aldi Follows Walmart

Right behind Walmart in AdGooroo’s paid-search rankings among grocers was Aldi, with $441,000 spent on the keyword group.

As the German supermarket chain expands its U.S. stores from 1,600 to 2,500 by 2022, its paid-search expenditures were up from $40,000 over the 12-month period.

Interestingly, Aldi averaged just $9,000 per month in spend on the keyword group from June 2016 through February 2017. Like Walmart, the chain’s spending surge appeared to be in concert with its other strategic moves, particularly when it comes to ensuring a stronger online presence in preparation for U.S. expansion roadmap.

In general, grocery brands’ invigorated SEO shift mirrors wider market moves designed to capitalize on the importance of social media channels like Snapchat and mobile micro-moments consumers turn to when it comes to making shopping decisions.

Where’s Amazon In All This?

Overall, AdGooroo found that Walmart captured a 19.1 percent share of total clicks on the 124 non-branded grocery keywords over the 12-month period, followed by Aldi (11.6 percent click share), Kroger (7.6 percent click share), Safeway (6.7 percent click share) and Fry’s (4.2 percent click share).

“Although the same top five retailers for ad spend also ranked in the top five for click share, Kroger and Safeway swapped places, showing that Kroger had a more efficient campaign than Safeway, since it spent less and received a larger share of clicks on the non-branded grocery keywords,” AdGooroo’s report said.

As for where Amazon was in all this paid-search activity, Amazon ranked 9th in AdGooroo’s ad spend survey on the non-branded grocery keyword group with $134,000 in spending from June 2016 through May 2017. Amazon also came in 9th in terms of clicks with a 2.8 percent click share.

Its acquisition target, Whole Foods, which has struggled technologically for a while, ranked 18th in ad spend with $51,000 spent on the keyword group over the last year. That represented a decrease for Whole Foods from the $57,000 the company spent on the same keywords from June 2015-May 2016 — and dismal 19th in clicks with a 1.2 percent click share.

In a separate study of retail sales growth by the National Retail Federation and Kantar Retail, Walmart’s ramped up search focus could have played a role in keeping it in the top spot.

“At 55 years old, Walmart may be the oldest new kid on the block, but it still has the energy and mindset of a startup as it continues to successfully battle the competition,” said Stores Media Editor Susan Reda said. Stores is the official publication of the NRF.

While main tale associated with retail these days seems to be one of retrenchment and struggle, as major brands like Macy’s and JCPenney shutter dozens of outlets, the NRF/Kantar Retail study sought to shine a brighter light on an industry taking steps to address omnichannel demands from consumers.

Retailers will always be measured by sales numbers, and ranking the leaders is important,” Reda said. “But so are the stories behind the numbers — it’s those stories that bring the Top 100 to life. The nation’s largest retailers are posting strong vitals. They’re embracing creative disruption, reinventing physical stores as places for brand experiences and exploring new ways to connect with the consumer.”

Considering that 90 percent of consumer transactions happen in a physical store, and that the majority of that that 90 percent is focused on grocery purchases, the challenge for independent markets and chains will rest on how well they play the SEO game, especially as the rise of voice-activated, Connected Intelligence assistants like Siri and Alexa are poised to have a greater impact on the answers consumers receive to their spoken search queries.

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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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Back-To-School Retail Sales Will Reach $857.18 Billion This Year

Too soon to think about back-to-school? Not for U.S. retailers: In the months of July and August, back-to-school shopping season sales will reach $857.18 billion — a 4 percent increase over 2016’s record-setting year, according to a report from eMarketer.

Five key categories will see a significant spending uptick this summer, per eMarketers analysis: Apparel and accessories, books and music, computers/consumer electronics, office equipment, and toys/sporting goods. In other words, it’s time for marketers in these categories to start thinking about promotions and experiences that will drive back-to-school related sales — even though September is still three months away.

However, as estimated back-to-school spending has grown since last year, the retail footprint has shrunk — meaning that online (both desktop and mobile) will play an even more critical role in driving both e-commerce and the physical sales that still occur.

This trend became clear in 2016, when approximately 85 percent of 1,000 parents told Retale said they use a smartphone to aid back-to-school shopping.

“The use of mobile to help with back-to-school shopping has risen nearly 10 percentage points year-over-year, according to our data,” Pat Dermody, President of Retale, told GeoMarketing at the time. “It’s clear that the omnichannel customer journey continues to define the way most people approach their purchases, and people continue to discover the advantages of leveraging mobile in their shopping.”

As such, marketers would do well to keep in mind three major factors influencing the mobile parents who are actually paying for the bulk of back-to-school purchases:

  • YouTube Matters: It’s not just for Gen-Z — both Millennial moms and dads are heavy users of the platform. In fact, 86 percent of all Millennial dads watch YouTube videos for guidance on parenting topics from cooking a meal to finding back-to-school products for their kids.
  • Video Ad Uptick: Whether on YouTube or not, video ad consumption is on the rise for both kids and parents. As such, “video is not a nice-to-have — it is a must-have,” Facebook’s Irene Chen explained in a panel discussion earlier this year. Just make sure that the video makes sense without sound or uses subtitles; plenty of users watch on the go in situations where it isn’t appropriate to have the volume up.
  • Intelligent Search Changes Everything: For every online purchase resulting from a search, Google sees multi-channel retailers receive an additional 400 in-store visits — a statistic that reinforces how crucial search is to brick-and-mortar businesses. But search has changed since the (relatively recent) days in which a query would result in a list of webpages. As such, to show up in the “knowledge graph,” businesses need to think about the entities fundamental to their category — like how to rank for unbranded search terms (“notebooks for back-to-school” as opposed to “Office Max,” for example), and where their customers are. Do they search on Google? Do they use Snapchat, or are they more likely to be on Instagram — or both? Alexa? Are they using Uber? Businesses today need to push their information to all of these digital services; it’s not enough to just put it on the web.

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Think With Google: Customers Want Brands To ‘Know Them Better’ Across Devices

53 percent of consumers will abandon a mobile site that takes more than three seconds to load, and 89 percent of U.S. marketers report that personalization on responsive mobile apps and websites has increased their revenue — hardly a surprise considering Think With Google’s report on the three trends shaping the future of mobile and connectivity, which sees customers asking brands to “help me faster, know me better, and wow me everywhere” with immersive experiences.

Immediacy has always been key to serving consumers on mobile, but with the advent of intelligent assistants like Amazon Alexa and Okay Google — which can answer voice queries instantly and get ‘smarter’ about their users over time — the bar for both speed and personalization across all devices has been raised even higher.

So, how can marketers deliver?

Get To Know Me

By now, marketers know that customized content is key to engaging consumers across devices. That said, it bears repeating that “personalization is a strategy, not a feature,” as TWG’s report states. “We have an opportunity to be smarter with data, using important signals about customers—such as browsing behavior or CRM data—to shape their experiences.”

As an example, TWG cites a recent Maybelline campaign: The brand was preparing to launch new products for a type of makeup application, contouring, and it used Google Insights to make “how-to” videos, which were then personalized by customer intent, demographic, and more. The result? Maybelline’s videos racked up a reported nine million views.

Don’t Forget About New Devices

Essentially, consumers are, at the base level, looking to be recognized for who they are by their favorite brands — regardless of device.

63 percent of people expect brands to deliver a “consistent experience” every time they interact. For marketers who have been paying attention to lessons learned from experiments in omnichannel, this stat should come as no surprise — but marketers now need to take this lesson and incorporate it when it comes to a new suite of devices and touch points. Anymore, it’s not just about synchronization across mobile, tablet, and desktop; as usage continues to skyrocket, connected assistants (Amazon Echo, Google Home, Microsoft Cortana) and IoT devices matter just as much.

“As consumer behaviors shift, it will be important to rethink the investments we make in the user experience,” TWG’s report concludes. “Removing friction and bridging the gaps between channels — all while treating each customer as a unique individual — will be key.”

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