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

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

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

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

The Retailer Response

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Domino Mag Teams With Amex On Hamptons ‘Platinum’ Pop-Up Shop

Domino, the content and commerce company focused on home décor, unveils its latest summer experiment in “experiential marketing” and co-branding in the Hamptons with American Express this weekend.

At same time, Domino is planning an upcoming Los Angeles collaboration with luxury retailer Fred Segal for the end of the year.

American Express and Domino will host “Platinum Summer” at the Topping Rose House, a tony hotel and restaurant in Bridgehampton. The Topping Rose also happens to be an American Express Fine Hotels & Resorts property.

The Platinum Summer will be open to the public Saturday, August 5th and Sunday, 6th from 10:00am – 6:00pm each day, and feature an “immersive Domino experience” that includes products chosen by Domino editors that are intended to celebrate summer and the “American Express Platinum lifestyle.”

Merchandise will range from beach tote essentials to housewares to perfect host gifts and lawn games.

As a direct appeal to high-end shoppers who frequent the Hamptons — and as an example of the kind of rewards programs available to its upscale cardholders — American Express Platinum Card Members will have special access to private shopping hours before it opens to the general public.

The alliance with Amex follows last month’s with collaboration with Walmart’s e-commerce brand Jet on a 1,500 square foot popup store in Brooklyn that showcased the connection between online and offline consumer experiences.

“For Domino, bringing our content and commerce to life through successful in-real-life shops and experiences is a big priority,” said Nathan Coyle, Domino CEO. “Today’s modern media company must drive revenue through many sources and offer premium advertisers and consumers something not offered anywhere else. Domino’s unique voice and devoted fan base have proven to be a winning formula with our experiential programming to date.   We are so happy to partner this summer with a premium brand like American Express and, this holiday season, a legendary retailer like Fred Segal to create more extraordinary experiences in 2017.”

Fred Segal’s LA outpost

“We are very excited to bring this unique shopping and interactive workshop experience to our Platinum Card Members in the Hamptons this summer,” said Janey Whiteside, executive vice president and general manager of Global Charge Products, Benefits and Services at American Express. “As a member of the Platinum Collective, Jessica Romm Perez, Editor-in-Chief of Domino, along with the Domino team, worked with us to curate this amazing collection and one of a kind access for our card members to enjoy as a part of this Hamptons popup.”

Separately, this holiday season, Domino and Fred Segal, LA’s iconic taste-making retailer, will collaborate on an exciting new project at Fred Segal’s new Sunset Boulevard flagship store, opening this fall. More details will be announced in coming weeks.

For Domino, these marketing alliances not only demonstrate its value as bridge between online and offline experiences, it also serves to highlight the media brand’s evolution.

First launched as a magazine in 2005 under publisher Condé Nast, it was closed four years later. Then, in 2013, the popularity of Domino, which was still potent among design enthusiasts, sought the title relaunched later that year as a quarterly magazine with with an e-commerce website.

Domino Summer Product Showcase

In terms of the benefits it is providing to marketing partners like Amex and Fred Segal, Coyle outlined the different strategies at work.

“For Amex and our Hampton activation this Friday through Sunday, part of the benefits for Amex are around Domino creating exclusive experiences for Amex Platinum Cardholders,” Coyle told GeoMarketing. “Specifically, the three workshops we are conducting over Saturday and Sunday are only available to Platinum Cardholders.

“For Fred Segal this holiday season, this will be the first time that Fred Segal has partnered with a publisher for one of its shop-in-shop experiences,” Coyle added. “Fred Segal of course has a long history of creating shop-in-shops for some of the coolest fashion and accessories brands — this will be the first time doing so with a publisher like Domino — with a proven track record of creating best-in-class experiences with our retail pop up shops.”

But the questions remain: Do these kinds of collaborations help drive foot traffic?

“They absolutely help drive foot traffic as we use our various marketing levers to promote the shops,” Coyle responded. “For example, we have over one million subscribers to our email list, and we are able to geo-target against that list to invite individuals in close proximity. We also use our social media channels and the digital and print publications to promote these programs.”

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Retailers Ramp Up AI Efforts, But Feel The Strains Of Catching Up

While brands from West Elm to Harley Davidson to Cosabella ramping up the use of artificial intelligence to better predict and connect with consumers, only 52 percent of retailers say that they’re able to manage real- time customer interactions, according to a global survey of 717 store brand marketing execs by Forrester and AI platform Emarsys.

That said, brands are scrambling to catch up. About 78 percent of retail organizations polled said spend on AI marketing technologies will increase over the next 12 months by at least 5 percent or more.

“AI is helping us to target specific segments of customers, which is increasing our customer base and helping us in addressing their needs,” one European respondent said.

Additionally, retail marketers plan to deploy AI marketing technologies to address foundational requirements for supporting real-time customer interactions, such as understanding cross-channel customer behavior (81 percent), mapping customer journeys (80 percent) and cross-device identity resolution (78 percent).

At the same time, about 65 percent of retailers voiced concern about attempts to keep up with consumers’ rapidly evolving tech choices and the complexity to form cross- channel customer relationships.

To get a better sense of where brands’ comfort with AI stands, the survey grouped retailers into four groups:

  • Experts (11 percent) who demonstrated true AI marketing readiness across all three dimensions.
  • Opportunists (34 percent ) who excelled at two of the three dimensions.
  • Novices (28 percent) who excelled at only one of the three dimensions.
  • Laggards (27 percent) who clearly struggled across all dimensions.

A clear majority of respondents (88 percent) “strongly agree or agree” that AI will reinvent the retail industry and dramatically change what the company does (81 percent).

In addition to finding ways of interacting with customers on their own terms, the bottom line of this call for “reinvention” is the pressure to personalize the shopping experience from Amazon.

Sales on July 11 surpassed Black Friday and Cyber Monday, making it the biggest day ever in Amazon history, the e-commerce giant said in a press release, noting that more than 200,000 women’s dresses — and more than 200,000 lightbulbs —  were purchased by customers on Prime Day 2017.

When asked about West Elm’s AI strategy, VP of Innovation Luke Chatelain told GeoMarketing, “We believe AI has a role in all facets of the technology we create. From programmatic emails to personalized product recommendations, we’re working to create better, more streamlined customer experiences that are personalized to each user.”

In the report summary, Emarsys and Forrester offer this additional guidance for retailers shifting to AI: “Misconceptions of tech skills required for AI marketing hinders mainstream adoption. Users are after all consumers too, they must get their hands-on AI-powered marketing tools to understand, control and teach it to get the best results.

“Not all firms will have all the required skills in the marketing organization, and given the talent shortage, it’s also likely that firms won’t be able to rely on external recruitment to fill the gaps,” the report warned. “Decision makers must educate themselves in all things AI, and ensure that for AI to work there is first and foremost excellent data stewardship, and not necessarily the need for marketers with tech skills.”

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Which Retailers Are Drawing Gen-Z Shoppers In Stores?

Amidst an ‘over-storing’ crisis in retail, mall-based brick-and-mortar chains like Ugg and The North Face actually appear to over-index with Gen-Z shoppers when it comes to drawing foot traffic, according to a new report from InMarket (download required).

The proximity platform looked at generational foot traffic (from Gen-Z teens to Baby Boomers) to determine which physical businesses over-index or under-index for specific age groups, in a bid to give marketers a glimpse into demographic shopping affinities. Some of the finding appear evident — Baby Boomers do more shopping at Yankee Candle than Millennials, for example — but Gen-Z’s shopping habits at “traditional” brick-and-mortars may come as a surprise.

“If you’re a brand marketer, it’s never to early to start understanding
what’s coming next,” InMarket’s report states. “Gen-Z — the supergroup of digital natives born after 1995 — don’t know a world without the internet and [they are] poised to shake up the world as they become the prime-spending demographic.”

In-Store Spending Isn’t Dead

The top four retail stores attracting more Gen-Z customers than other generations are Ugg, The North Face, Payless, and Vans, according to InMarket’s location analysis.

This finding offers two key insights: First that Gen-Z teens are patronizing “traditional” mall-based retailers not just online but in their physical spaces; and second, that this demographic favors more upscale brands than their Millennial counterparts — whose power rankings are topped by discount chains like Ross, Rainbow, and Burlington.

Gen-Z’s willingness to spend at retailers like The North Face likely has something to do with the fact that mom and dad are still padding the pockets of this generation; teens born in 1995 or later are still under 18, meaning that most of them probably aren’t picking up the tab for their shopping trips. Essentially, this trend may or may not last once Gen-Z members are working full time and footing the bill themselves in a few years.

But, on the other hand, Millennials are the generation that entered adulthood during or soon after the financial crisis, making it easy to see where their relative frugality comes from. Over and over, research has underscored the idea that the majority of Millennials prefer to spend on experiences rather than things, and they can be a bit gun-shy when it comes to pulling the trigger on more expensive retail purchases. Perhaps members of Gen-Z will take a different view, which could serve as a boon to retailers as they come of age over the next five years.

As for parsing out Gen-Z’s apparent willingness to shop at retailers who could be considered to be a part of the current “mall crisis?” It’s a bit more complicated. Are they patronizing these retailers because their parents are in the habit of driving them to a mall or other block of local stores? Or is it because Ugg, The North Face, and similar competitors — like REI, for example — have created a online-to-offline brand message that resonates with a generation fixated on authenticity?

It’s likely a mix of both. The North Face has been lauded for creating a community of outdoor enthusiasts online, especially through its partner online hub Planet Explore. And for its part, Ugg has long engaged in influencer marketing, working with athletes like Tom Brady and teen icons like Kendall Jenner — who are known as brand advocates on social media in a bid to create influencer endorsements that feel more “transparent” (think hashtags like #ad or #partner).

As a panel of Gen-Z teens discussed at this spring’s MMA Location Leadership Forum, creating these kind of social media/online communities in a way that doesn’t seem manipulative is one factor that appears to have a profound impact on younger shoppers — as does a brand standing for a cause or message that seems endemic to its industry/mission.

Perhaps these outdoor retailers in particular have done a good job of broadcasting a consistent, cross-channel message that appeals to Gen-Z teens as a means of thinking “beyond commerce.” But as this demographic ages out of being driven around by their parents, brick-and-mortars will almost certainly have to do more with mobile, in-store experiences, and beyond in order to keep these consumers coming back.

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How Shinola ‘Rolled Up Its Sleeves’ To Link Location Insights With Outdoor Ads

In its outdoor ad campaign that kicked off in New York this past March, Shinola sought to tap into the old-fashioned virtues of “hard work” while showcasing its aura as a startup that is bent on “giving back” to the communities its in.

The Roll Up Our Sleeves campaign reflects the ideals of the luxury manufacturer and retailer that sells everything from retro-stylized watches to bicycles to leather goods and stereo equipment.

The brand, which was launched in 2011 by a Texas investment group and adopted Detroit as its manufacturing headquarters, wanted to hone in on specific audience segments in places that indicated a sense of shared values and interests. And that’s where the focus on employing location-based analytics and targeting came into play.

“The ability to connect with very specific set of buyers based on their real-world affinities is a powerful one,” said Jacques Panis, president of Shinola. “One of our goals is ensuring we deliver unique experiences that resonate best with our buyers.”

“We can engage with very distinct audiences that fit within our core audience, such as those who stay at boutique hotels, work in creative roles, and purchase items from artisanal eateries, for example,” Panis added. “With location-aware context and dynamic ad units, we’ve been able to deliver increased relevancy to buyers, which significantly drives store traffic and sales.”

Location-Marketing Messages

But aside from demonstrating its cool factor, Shinola’s ad campaign was also intended to appeal to locals’ sense of earnestness. Rather than just focusing on the attractive products themselves, the campaign features “people who have benefitted their communities through hard work and innovation,” says Elizabeth Fermon, associate media director, MullenLowe Mediahub.

Among the people featured on the billboards are Nadine Harris, who is the founder and CEO of the Center for Youth Wellness; Brit Gilmore, president of the Giving Keys, which helps youth transitioning out of homelessness; Richard Garcia, the founder Alma Backyard Farms, who gives people that were previously incarcerated a chance to give back to their communities through farming.

But in order to ensure that the right consumers were getting the message at the right time — such as when they were commuting to work — Mediahub teamed up with geo-data specialist PlaceIQ to analyze the links between the billboards, the stores, and consumers’ location habits across Shinola’s six key markets: Detroit, New York, Los Angeles, Chicago, Washington, DC, and San Francisco.

“PlaceIQ would know if people walked by one of the out-of-home ads and then message them,”Fermon told GeoMarketing. “We also used the data on those targets to understand where they tend to go in their respective cities. Shinola had a relatively small marketing budget, so one of the goals was to minimize waste and communicate directly with interested consumers.”

Geofencing the stores was another important aspect of extending the outdoor effort to on-the-go consumers. PlaceIQ helped deliver targeted messages around the stores that were personalized for each location and city.

Shinola’s Detroit retail location

An Online/Offline Audience Extension Strategy

Relying on location data would help Shinola better understand and segment consumer audiences, and allow it to develop “dynamic creative” mobile ad units based on unique audience affinities, noted Drew Breunig, PlaceIQ’s SVP Strategy.

“The dynamic mobile creative took up the themes and stores from the out-of-home execution and made them interactive and personal,” Breunig said. “One of the pleasures of working with Shinola is how well they understand their consumers and their story.”

“We weren’t expecting to find any surprises,”Breunig continued. “But what we did find was greater insight and detail on top of what already existed. People who go to coffee shops, vegan restaurants, jazz clubs – these are people who are seeking out direct experiences. And that’s something Shinola as a brand can tap into and relate to as well.”

The campaign also demonstrated how geo-data and the concepts associated with location-based advertising are also influencing the creative aspects, not just ad delivery and targeting.

The specific messages in the campaign were based on the location an ad was served and interactive product galleries for audiences to explore Shinola products. These custom creative units featured recognizable landmarks and local icons, such as San Francisco’s Golden Gate Bridge, and played a key role in helping to optimize brand exposure among key consumer audiences, Fermon said.

Shinola in NYC

It Comes Down To Metrics

Attribution — knowing whether someone who saw a billboard, and then saw the mobile extension of it, went into a store as a result — represents the ultimate value, Fermon noted.

While Shinola isn’t revealing the final results, the companies say that they were able to track customers are a particularly deep level.

“PlaceIQ would know if people walked by one of the out-of-home ads and then message them,” Fermon said. “We also used the data on those targets to understand where they tend to go in their respective cities. Shinola had a relatively small marketing budget, so one of the goals was to minimize waste and communicate directly with interested consumers.”

A recent trend among a number of platform companies and location marketing specialists involves a guarantee for performance of whether their ads achieved their aims for brick-and-mortar visitation.

In March, discount shopping app Retale rolled out its “Store Traffic Guarantee” for ad campaigns on its platform a week after location marketplace GroundTruth (formerly known as xAd) released its Cost-Per-Visit ad format with Applebee’s and The Home Depot.

In a blog post published last month, Duncan McCall, CEO and Co-Founder, PlaceIQ, offered a critique of the Cost-Per-Visit model, suggesting that “the allure of simplicity is concealing some troubling details.”

“We don’t have an issue with Cost-Per-Visit per se, but we do have a huge issue with the way it’s being measured and spent,” said Breunig. “In our investigations, the match-rate has averaged out to 0.4 percent on the high end and 0.2 percent on the low end.

If you’re looking at just that and a handful of billboards, as in the case of the Shinola campaign, that’s just “untenable,” Breunig said.

“Given that we believe that Place Visit Rate is a strong way to measure the efficacy of a campaign, and because we’re not using a panel to do that, we have statistical significance that we can start to apply across all the mobile markets associated with the campaign,” he added “My issue is with taking that small match-rate size, where you’re only looking at maybe a couple hundred people while charging for millions of impressions off of that. That is a bad step for the industry.”

As for Fermon, Mediahub is continuing to examine ways that location data can provide deeper insights into consumers’ place-based patterns.

“One of our core principles is helping brands reinvent the way they market to consumers,” said Fermon. “Our approach to increasing store traffic was by marrying data and creative in a unique way in our key markets, by continuing the message beyond OOH and by surrounding the places our targets frequent, like The Ace Hotel in LA or the Hudson River Park in NYC. By creating dynamic messaging based on consumers’ location Shinola continues to embody its strengths as an innovative brand that delivers a localized experience in every city, both in their advertising and in their stores.”

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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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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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How RaceTrac Drove Visits To Its Gas Station Convenience Stores 47 Percent Higher

A combination of rich media and location targeting last holiday season helped  RaceTrac generate a 47 percent lift in traffic at the gas station convenience store chain’s 450 outlets across the southern United States.

The December 2016 campaign was run by full-service digital agency Vert, along with design firm R/GA, and geo-data ad and attribution platform NinthDecimal.

The trio collaborated on developing “a dynamic, engaging ‘drive-to-store’ mobile ad unit that was both eye-catching and easily trackable. The rich media ad was designed to guide mobile users to the nearest RaceTrac convenience store using their current location.

NinthDecimal then built an audience segment comprised of consumers who were most likely to respond to the ad based on previous visits to RaceTrac and its competitors’ locations. Using NinthDecimal’s Location Graph data set of mobile audiences’ devices, it served the ad to those “qualified users” when they were within 10 miles of a RaceTrac convenience store.

The 47 percent lift includes both existing and new customers, RaceTrac and NinthDecimal execs said.

“By using NinthDecimal’s physical-world data, we were able to successfully reach not only our loyal guests, but also our competitors’ audiences, and drive these individuals into our locations in a measurable way,” said Jamie Rodgers, brand director of RaceTrac.

The campaign’s results come as marketers have widely embraced the use of location data as more than just a way to send an ad to the “right person at the right place in real-time.”

The frequent goal for location data these days is two-fold: understand and predict patterns of consumer behavior based on where they go, then use unique device data — anonymized, of course, most platforms are quick to note — and then, determine if such targeted ads were able to drive that consumer into a store to complete a purchase as a result.

“In the era of data-driven marketing, it’s incredibly valuable for brands to understand the effectiveness of their ad spend down to the last cent,” said David Staas, president of NinthDecimal. “The RaceTrac marketing campaign shows how brands can leverage mobile location data to reach new and existing customers as well as deliver real world business results through digital advertising.”

The Rich Media Factor

The emphasis on rich media in conjunction with the location insights NinthDecimal is also worth noting.

For one thing, rich media, which tends to include moving graphics and sound, can also be “dynamic” — that is, they can be seen to resonate (or fail to) with consumers in real-time, allowing marketers and their agencies and platform partners to update the messaging and delivery on the fly.

When asked how much of a factor the tools associated rich media were in generating the 47 percent lift in traffic at RaceTrac, a NinthDecimal representative said “rich media offers dynamic messaging that corresponds to several live variables during the flight of an ad, changing (in real time) creative to reflect those conditions.

“In this instance, identifying the nearest RaceTrac location for users based on their current location creates a unique experience,” the NinthDecimal rep added. “Removing the hurdle and extra step of having a user search for a location by inserting a real-time map in the unit itself, certainly provides high level of value that a standard banner may not have the ability to offer.”

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When It Comes To Brick-And-Mortar Loyalty, Walmart Is Up As Fashion Brands Lag

The challenges facing major retail brands has been known for a long time, but the main opportunities those marketers still possess is the ability to command loyalty at scale by dint of their awareness and widely spread locations.

But, as with anything, some are better at driving loyalty than others.

As detailed in proximity platform inMarket’s Spring 2017 Loyalty report, the brands doing loyalty well are varied — Walmart was in the lead with a score of 2.68, followed by electronics chain Fry’s with 2.54, on down to Dollar General, Fred Meyer’s Jewelers, Target, Family Dollar, 99 Cents Only, Dollar Tree, The Home Depot, and Lowe’s.

What’s Driving — And Restraining — Retail Loyalty

Before getting to the brands that are struggling with loyalty, inMarket’s methodology for ranking the brands is based on location data captured 50 million mobile devices per month via its app partners.

The company looked only at non-grocery retailers based on customer loyalty from January through May, 2017. Each retailer is assigned a loyalty score, which is determined by repeat device visitation and is normalized for comparability.

For example, a retailer with 1,000,000 visits from 500,000 devices would have a loyalty score of 2, whereas a retailer with 10,000 visits from 4,000 devices would have a loyalty score of 2.5. Note: The average loyalty score for all non- grocery retailers in Spring 2017 was 1.45.

As for the bottom 10 companies in inMarket’s rankings, shoes and accessories retailer Nine West had the lowest performance with a 1.23 loyalty score. It was followed by other fashion and apparel brands Crocs, Wet Seal, Bebe, The Gap, H&M, American Eagle Outfitters — the non-clothing names were Toys ‘R  Us, The Kitchen Collection, Disney Store.

Personalization, Not Payoffs

The themes on both lists are clear: brands that promise savings and discounts tend to invite more loyalty. The primary presence of convenience stores like Walmart and Target, along with the dollar stores, naturally tend to have more frequent foot-traffic versus fashion retailers.

“Overall, there’s a clear trend toward discount/value retailers in the Top 10,” said Dave Heinzinger inMarket’s VP, Communications. “Walmart leads the pack, but the growth of dollar stores is being widely reported right now.

“It could be because millennials have become the ‘frugal generation,’ and they now make up the entire 18-35 prime spending demographic,”Heinzinger added. “They carry tons of student loan debt and make less than their parents when adjusted for inflation. I found it interesting that both Home Depot and Lowe’s not only made the list, but ranked with the exact same loyalty score. Perhaps its because of those never-ending home improvement projects that many of us have.”

On the question of whether apparel retailers tendency to lack the frequent foot-traffic that convenience stores do, Heinzinger added: “We view repeat device traffic as a key loyalty indicator — so if a retailer is retaining customers below average for their category, that’s a sign of distress.

“E-commerce is certainly a major factor in decreasing foot traffic, but it’s not the whole story,” he added. “Many of these mall-based fashion retailers are the polar opposite of the discount/value chains that are growing in 2017. They’re often charging full price for products that might turn up at outlets at a deep discount — which seems to be better aligned with today’s consumer behavior and specifically with millennial shopping preferences.”

Another obvious point, but worth noting nevertheless, is that loyalty is often connected to rewards in the form of discounts in the minds of consumers.

But as brands struggle with balancing the ideas of “value” and “premium,” the notion of driving loyalty beyond lowering costs for regular customers has been taking hold by brands.

Speaking at the NRF’s Big Show in January, Mike Mauler, EVP and president of GameStop International, made the point that loyalty needs to be defined more around the idea of personalization, not deals.

“The true power of our loyalty program is not the points or perks,” Mauler said. “We don’t find that consumers come into a GameStop to get points. We use loyalty to enhance our knowledge of what the customer wants,” Mauler said. “We send out updates and promotions. We can send out emails letting customers know, ‘Hey, Christmas is coming, you can trade in points worth $110 that they can then buy games for your friends.’”

For inMarket, the loyalty scores also provide a forecast of what retailers are likely to face in the near future.

“Eight out of the bottom 10 retailers for customer loyalty are either closing stores, halting expansion or laying off employees in 2017,” inMarket’s report said. “While Nine West hasn’t announced any store closures yet, their financial woes have been widely reported. Based on the Spring 2017 data, we predict Nine West will announce store closures before the end of 2017.”

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