How Local Businesses Can Take Advantage Of Their ‘Frenemy’ Relationship With Amazon

As large and small retailers head to the NRF’s Big Show this weekend, the question of Amazon as a friend/enemy or “frenemy” will hang over most of the discussions as the industry seeks to find a way to adjust to the e-tailer’s hegemony and influence with consumers.

Earlier this week, Amazon touted the benefits to SMBs during 2017. Among the highlights Amazon pointed to was that more than 300,000 U.S.-based small and medium-sized businesses joined the Amazon Marketplace.

The company also said that more than 140,000 SMBs selling on Amazon surpassed $100,000 in annual sales, while Amazon Lending surpassed $3 billion lent to small businesses on Amazon since the program started in 2011.

“More and more small and medium-sized businesses are choosing to join the Amazon Marketplace and sell right alongside Amazon to reach customers around the world. Entrepreneurs and small business owners are succeeding on Amazon – they sell half the products that Amazon customers buy, and more than 140,000 small and medium-sized businesses surpassed $100,000 in sales on Amazon in 2017,” said Peter Faricy, VP for Amazon Marketplace. “These businesses are reinvesting in their local communities – creating jobs and supporting local suppliers. We are proud of how the Amazon Marketplace helps empower so many small businesses, not just in the US, but around the world.”

Amazon’s Gravitational Force On Retail

The growth of e-commerce and the decline of store sales has largely been blamed on the gravitational pull Amazon exerts on the space.

And stats cited by  Bryan Eisenberg, co-founder of marketing consultancy BuyerLegends and co-author of  Be Like Amazon: Even A Lemonade Stand Can Do It, would seem to suggest that this is not a case of mass paranoia: Amazon captured 89 percent of all online holiday spending in the five-week period beginning on Thanksgiving, according to an analysis of credit- and debit-card transaction data by Earnest Research in New York.

In comparison, Walmart, which purchased Jet .com in 2016 for $3 billion, remained a distant second a 4.4 percent, Eisenberg notes.

Amazon has continued to move aggressively in expanding its promise of near-immediate delivery and physical pick-up options for its online shoppers by rapidly opening up fulfillment centers in major cities. But as Eisenberg suggests, there is a lot that local businesses can do to take advantage of Amazon rather than be crushed by it.

The Instant Pot Model

The first thing retailers need to do is come to terms with the fact that Amazon is determined to reach every city, town, and block with ease over the next few years.

“You can’t even say ‘Amazon dominates,’ because it’s beyond that when it comes to retail and retail search,” Eisenberg says. “When someone wants a product, they’re going to Amazon. It’s their choice to be there or not. I think retailers have to be there. Yes, you can keep them as a ‘frenemy.’ But keep in mind two things.”

The first is that when brands are exceptional, and they behave like Amazon, they can grow massively without having to compete with the e-tail giant.

One example Eisenberg offers is the phenomenal success of the Instant Pot.

While Amazon has been adding its own versions of many products sold on its platform, it isn’t going to compete with Instant Pot for two reasons, says Eisenberg: Instant Pot is priced fairly and has built a cult-like community around it. The latter is something Amazon would not be inclined or able to do.

As a result of all those factors, Instant Pot thrives in Amazon’s world.

Another example Eisenberg points to is Anker, which makes cell phone accessories, which has similarly built its brand through Amazon despite facing  white labeled items sold under Amazon’s banner. Amazon doesn’t slight or mind Anker because it adheres to what Eisenberg says is Amazon’s “four pillars”:

“They take care of their customers, they get the products to them quickly, they’re constantly innovating and creating new products, they price their products fairly, and they sell well,” Eisenberg says. “So if you live by Amazon’s rules, they leave you alone. But if you’re an Energizer or a Duracell that have gauged consumers on batteries, Amazon will create a private-label knock-off and price it to allow it to take over that market.”

The Amazon Advantage

That product proposition can also be applied to local stores, Eisenberg adds, though many of the benefits are still a few years off.

“The advantage to local businesses is – and I don’t think you’re going to see that today — that you will be able to get global reach,” Eisenberg says. “Amazon has out-Googled Google by becoming a better product search engine. They’re also potentially be competitive in retail services such as plumbers and contractors.”

That’s a space that Google, Yelp, and Facebook have been aiming to capture as well. And that competition from Amazon will give those local businesses a good deal of leverage, especially as the marketing battle among voice-activated assistants heats.

“We know that Amazon is betting the farm on Alexa and implanting that beyond Echo devices,” Eisenberg notes. “Alexa will be more deeply embedded on other people’s phones, it will be on watches and wearables, it will be on refrigerators, and most importantly, it will be in cars. It will have an important place in self-driving cars at some point.”

In the not-too-distant future scenario Eisenberg paints, a consumer will be traveling in their autonomous vehicle and decide they need a shirt for a conference they’re attending next week. They’ll tell Alexa to find it. Considering that Alexa knows the person’s size, where you like to shop, and has their payment info, the voice activated assistant will have the details in seconds. After scanning listings near the route, Alexa will ask if it should navigate to a selected store.

The store will get the sale and Amazon will be able to take a piece of that advertising business, while taking another piece through its payment system. And because Amazon can’t do everything itself, it will be a win-win for retailers, Eisenberg says.

“There are more things that Amazon can offer in terms of services that can’t fit into a warehouse or fulfillment center,” he says. “It’s also more cost efficient to rely on a retailer than on its fulfillment center.”

Eisenberg’s view is already borne out by at least two local retailers that shared their stories with Amazon.

“Since selling on Amazon, we’ve been able to grow our business from three to 40 employees, right here in Delray Beach, Florida,” said Michael Dudley, managing director of Salon’s Choice. “We recently launched on Amazon in the U.K., and are now shipping thousands of orders a day through Fulfillment by Amazon to customers around the world.”

“We launched on Amazon two years ago and are now operating in more than seven countries around the world,” said Phil Williams, CEO and founder of Coffee Gator. “2017 was our biggest year on Amazon, with sales growing by more than 100 percent year-over-year, and we expect 2018 to be even bigger.”

Nevertheless, for those retailers who plan to take their chances in terms of opposing Amazon’s local incursions, Euclid Analytics CEO Brent Franson presented his own battle plan that calls for updating co-op data and marketing strategies.

“Building an effective data co-op for retail is challenging – 55 percent of online shoppers start their product searches on Amazon, says BloomReach – but ultimately worth the battle,” Franson wrote on GeoMarketing this week. “More choice will force the industry’s three major players – Amazon, Facebook, and Google – to improve what they offer to marketers. If the competition is better, then the Big Three runs the very real risk of significant losses. Either way, the consumers – in this case, the marketers – win.

“The right co-op structure will yield better personalization based on actual customer needs and intent. It will earn customer trust by balancing privacy concerns with personalization; for example, the co-op should outline clear rules that ensure obfuscation of certain kinds of data (e.g. PII) before sharing with the pool. Finally, it will prioritize optimized marketing for long-term value. This is about building long-term relationships that reward both the retailer and the consumer; it’s not merely about immediate conversions. Each member of the cooperative should believe in, and be working toward, that goal.”

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Amazon’s Dave Isbitski: With Voice-Enabled ‘Everything,’ Brands Must Get Back To Conversational Basics

With the rise of machine learning and cloud computing to fuel innovation, natural language conversations with AI have become an everyday reality — but even voice-activated intelligent assistants become a major factor in consumers lives, brands’ sense of how to approach them as a marketing vehicle is still in its infancy.

But “every industry can [add] value based on just having a conversation,” explains Dave Isbitski, Chief Evangelist for Alexa and Echo at Amazon. And while the technology that consumers are using to power nearly every aspect of their lives has indeed evolved, “it’s still almost like what’s old is new. We’re going to back to just having a conversation.”

Following a keynote at Yext’s ONWARD conference in November entitled Voice-Enabled Everything, Isbitski talked to GeoMarketing about the reality of marketing through conversation — and the next phase of the mass transition to voice. (Full disclosure: Yext owns GeoMarketing. More details on our relationship here.)

GeoMarketing: Amazon Echo products and the Alexa assistant have become so mainstream. But do brands have a sense of how to approach using Alexa as a marketing vehicle? What’s the top question that you get from brands about how they should use Alexa as opposed to just what people are used to (i.e., text and type)?

 Dave Isbitski: The bigger question that most brands are asking themselves, and that everybody’s coming to, is, “What does it mean to be conversational?”

In terms of digital marketing, we’ve had technology, we’ve had these screens, for a long time. But now, it’s almost like what’s old is new. We’re going to back to just having a conversation. And so, a lot of brands have conversations with customers through their support centers. But those calls sometimes have a tendency to show what the technology couldn’t solve.

So another question brands should be asking: “What’s actually working with my technology today?”

What I start to see is brands will have everyone at the table. It will be, “What kind of calls are we getting from customers in our support center? What are we hearing that’s actually working? What are our reviews in our mobile app – what do people like about our mobile app?”

After that, the questions become, “What do we want to provide? What’s in our specific industry? Where can you do value?”

Because, every industry can do value based on just having a conversation.

What other trends are influencing brands in this new era of artificial intelligent-powered marketing and assistants?

The other thing that I’ve seen is chatbots. Brands who have done chatbots have started to reach that state where they can be more informal with a customer, versus trying to go through what I call “on-ramps.”

You have these on-ramps: “This is how you get to ask a question,” versus “Ask a question,” which a chatbot will give you.

If a brand has started with chatbots, and they’ve experienced that informal conversation, and they’ve seen that customer questions get resolved — which usually, they do — you start to see that expanding their marketing strategy.

Then voice conversation is a smoother transition. What you’re doing is, you’re creating this contract of the types of questions that are going to be asked.

How so?

You can take that data you have from your chatbot. Sometimes the training questions are the same. We have that at Amazon, we have Lex, which is a service through AWS. [Amazon Lex is an AWS service for building conversational interfaces into applications using voice and text].

In fact, with Lex, you can actually take the utterances and intents you’ve built, and create an Alexa skill.

What other issues are brands having to deal with in the transition to voice?

When I was talking about the on-ramps, the worst thing you can do, and I have seen this happen, is to say, “We’ve got a mobile app, this is the parameters through my service that my mobile app calls, therefore I’m going to ask those as questions.”

That’s not conversation. People will know that right away. They’re like, “This is just a back and forth, this is the IVR system. I might as well just hit the buttons on the keyboard. That’s not how conversation works.

You spend most of the time thinking about having a conversation with your customer. So, I guess the bigger question that you’re asking is more about, “What’s the starting point for this?”

Because there are over 25,000 skills, what I tell a lot of people is, “If you’re thinking you’re going to do a finance skill, for example, we’ll see what Amazon customers are saying in reviews, because there’s real data there.” You know what your customers are telling you.

But if you’re looking for voice experience, we share all that in reviews, so you could actually go through, and you could data-mine all that and say, “You know what, I consistently see people are saying this. This one’s got four stars.”

All of that is publicly available. And we saw that in the mobile space, too. If you were going to enter an area, you looked at what was getting to the top of the charts. and the question was always, “How could you create more value on top of that?” And that’s what every brand constantly has to consider.

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Location’s and Mobile’s Year in Review: 7 Marketing Moments that Shaped 2017

Mobile marketing is moving forward, always forward, tracking alongside the expansion of technology as the consumers’ first — and increasingly only — choice when it comes to how they experience and interact with every industry, from retail to automotive and beyond.

In the home, on the move, in stores, this year was marked by the domination of mobile marketing and by the continued rise of emerging interfaces such as augmented reality. Looking back at 2017, the list below highlights key points within this evolution — each example counts as evidence that we live in an increasingly mobile-to-offline world.

  1. A year for identifying new location-contextual opportunities. From at-home research to across-the-day moments, mobile and location data are about relevance and personalized moments. This is not just a retail opportunity. Automotive dealers, for example, spend more than $600 per car in advertising, the National Automobile Dealers Association reported in 2017. Roughly $400 of that amount is being spent on advertising channels — including TV, radio, and newspapers — that feature virtually no targeting (as we understand digital targeting, in 2017), and that leave out location data’s window onto context, relevancy, and anticipatory inspiration. As the year closes, aging notions of on-lot conquesting are poised to be replaced by other meaningful mobile moments; proximity-only strategies now represent limited models of ad spend in the M2O world.
  1. Apple’s ARKit earned powerful adopters. Augmented-reality got a boost this year when IKEA, a longtime adopter of consumer-friendly 3D-image technology, took a remarkable lead with its AR-focused Place, quickly embracing Apple’s ARKit in the process. The app allows consumers to combine shopping with the realities of their location — viewing furniture at true scale in their homes. Meanwhile, monitoring social media, the company noticed that consumers were complaining about the lack of a search feature for Place, and so they added one, deploying a new version in five days. Innovation plus responsiveness gave IKEA a 2017 mobile-marketing win.
  1. AR developers didn’t unveil a post-Pokémon follow-up, but AR did make retail inroads. Rather than a next-generation follow-up on 2016’s Pokémon GO success, what we saw was a push for incremental AR solutions — testing and deployment that largely depended on answering consumers’ wants and needs. See the IKEA instance, above, for example, and there was also this hail-Mary effort by Toys R Us to bring consumers back to stores. Meanwhile, the augmented-reality story in 2017 further expanded to different kinds of hardware altogether. As Venture Beat reported, the automobile driver’s cabin is newly poised to become automotive’s canvas for an entirely different kind of mobile AR space.
  1. Apple drew a (blue) line between mobile users and unchecked location-data practices. The iOS 11 blue bar for location lit up the conversation around consumer location-data access. The net outcome was a consumer boon, with Cupertino’s later revision — user opt-in will mitigate the blue bar requirement for selected apps — making the experience even more palatable for consumers that know the apps they love. In all cases, the core of Apple’s move means flagging battery-drain offenders and potentially unscrupulous data collectors.
  1. Mobile-ad spend increased (and the duopoly won’t claim all of it). Adweek reported this year that as much as 70 percent of digital-ad spend ended up on mobile’s side. That’s amazing news, even if it comes with the caveat that 60 percent of that spend ended up in the coffers of Google and Facebook. For the rest of us, for mobile-marketing’s innovators and leaders, there is still so much to claim — if the stats are accurate, some 40 percent of mobile-ad spend remains for the taking. Tomorrow’s leading organizations will grasp their share of it next year and in the years to come. Bottom line, the M2O landscape has room for us all.
  1. Amazon made moves to claim market share. Marketing Week sees Amazon growing its global digital ad revenue into a $2.84 billion business by 2019. Mobile is part of its play: “They have a search engine, a programmatic stack, premium content and one of the top five apps,” Kristin Lemkau, chief marketing officer at JPMorgan Chase, told Business Insider. In 2017, Amazon made inroads to retail experiences and customer touch points as well: partnerships like the one it forged with Kohl’s — the brick-and-mortar started taking Amazon returns in 2017 — stand to drive meaningful conversions (customers make new purchases about half the time during a return), and they stand as strong arguments for partner-brands to put more digital-ad spend in Amazon’s pockets as these relationships develop.
  1. And, we learned, fully realized mobile creative is not abbreviated TV. An important mobile story emerged as Dove took a TV spot, cut it down to about three seconds, and ended up with a social-media emergency. The spot, in its shortened format, left out critical elements of context — in effect, one of the images in the mobile version appeared to be racist. Moral of the story? You need to create for mobile; you can’t simply trim a TV spot and assume you’ve retained your message. Mobile consumers are super-aware of context and they are always alert to moments they can share — and sharing means outrage as well.

As a final note about 2017, we may well look back on this year as a tipping point — a moment when the mobile data-privacy equation went internal. In two cases, with Three Square Market implanting RFID chips in 50 employees’ hands — part of an IoT program at the company — and with the FDA’s approval of an ingestible sensor pill that can track medication from a patient’s insides, the doorway to a new era of data-collection and policy complexities crept open.

The above examples show that mobile marketing strengthened, evolved, and approached the threshold of exciting new steps in 2017. As we ramp-up for 2018, the work we’ve accomplished will fuel the industry’s success in the months to come. Happy new year, mobile marketing — you’ve never looked better.

*As Chief Marketing Officer, Julie Bernard leads Verve’s brand strategy, marketing, analytics and creative services. Julie was previously SVP of Omnichannel Customer Strategy, data science, loyalty, and marketing technology at Macy’s, where she was recognized as a customer-centric leader implementing data-driven approaches for strategic growth, including award-winning personalized communications at scale, first-of-a-kind loyalty programs, and modern media attribution techniques.  Bernard previously held executive leadership positions at Saks Fifth Avenue and XRoads Solutions Group, a boutique retail consultancy.

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What Do Brands Need To Know About Using Amazon Alexa?

Even as Walmart rolls out voice-activated shopping via Amazon Echo’s Alexa and 40 million Millennials are ready to use Connected Intelligence-powered devices to order holiday gifts, most brands continue to wrestle with the implications of audio.

In a presentation at The LBMA’s Retail Loco in Atlanta last week, Noelle LaCharite, senior technical program manager for Amazon Alexa Machine Learning, offered some clear guidelines for how brands should navigate the use of voice-activation for marketing purposes.

Among her four-point outline for brands, LaCharite’s basic recommendations are:

Avoid Feature Creep. Keep It Simple. “Don’t overwhelm your users with features out of the box. Voice is a new way for users to interact with your product. Keep it simple and grow from there.”

As Natural Conversation As Possible. “Try to make your utterances as natural as they possibly can. Top Tip: Have a real world conversations with one another to create these.”

Core Business Functionality As A Minimum. “It’s important to do the fundamentals right. If you are a news company. Your users will naturally expect you to at least provide the news. Do the extra features later.”

Utilize The Built In Library. “There are hundreds of entities that Alexa can understand using the Built-In library. You can handle this in your skill by simply including them in your interaction model and respond with a useful response.”

GeoMarketing: What should brands know about Alexa’s capabilities as a marketing vehicle? Are you surprised at how much they know or how little they know?

Noelle LaCharite: People are not in a voice-first world yet. So, my goal is to be very aspirational in nature, and just expose the idea of “What would it look like if your brand thought about voice?”

The biggest question is what does your brand even sound like? It’s not something most brands have had to think about. But it’s actually there in some of the most well-known places. For example, most people know what the game show Jeopardy sounds like. You immediately have that tune in your head when the name is mentioned. You don’t have to explain anything. It’s almost common language, but it’s hard to put words around it. And yet, everyone immediately recognizes what it means.

You don’t even have to see Jeopardy. That’s what brands have to achieve now. Most brands haven’t even thought through what ear-cons are, those different sounds, chimes, audio signifiers that identify a brand without additional explanation. That is going to be so important for brands to grasp as consumers shift to a voice-first world.

Amazon Echo Alexa Dot

GeoMarketing’s Lauryn Chamberlain recently spoke to the BirchBox CEO Katia Beauchamp about the way the way Alexa has influenced the way consumers get information. So we’ll pose the same question we did to her: Does the rise of voice-activation call into question the need for a website, or the primacy of a website for brands?

The easiest thing for people to do to be successful is just to look at what are the top 10 things people do on their website. And some of them aren’t going to be top tier ranking. Some of them are going to be three clicks down or 10 clicks down. So find out what those are and make those your first things that you do. We call it the “minimum remarkable product.”

So now, brands are going to have to figure out what’s the most popular thing people are already asking for and make that a top-level indicator of intent in order to get the best interaction.

While Alexa is mostly thought of as powering the Echo in the living room or kitchen, it’s also there on your phone, in the Amazon app. Should brands be thinking of the way Alexa can tie on-the-go and at-home experiences together?

Right, Alexa on the Echo and on your phone within the Amazon shopping app is still the same Alexa.

As an example, one of my Alexa skills is daily affirmation and it’s you can do it while you’re shopping or you can do it sitting on your couch, and it’s the same experience. That’s that contextual experience we’re shooting for. So we want people to be able to say the same thing, the same way, whether they’re standing in front of their washer and dryer, in front of their fridge, or in the aisle of some store.

When we talk to retailers, there’s a lot of interest in using Alexa as a virtual sales assistant to help people while they’re browsing in a brick-and-mortar store. Do you think of those use cases as well?

From an aspirational perspective, absolutely. We’re not actively doing anything like that at the moment, but at the core, the Echo is a customer experience device. So how could you not only delight them in-store, out of store. Because someone already has Alexa on their mobile app, we’re always trying to imagine what could you do to make any brand that you either sell or associated with be more successful.

The challenge, obviously, is, with voice, if you’re in a crowded store, it’s difficult to kind of narrow down what one person is saying. Then you have to think about using voice remotes or a push button. One of the crazy ideas could be to create a phone booth that you step in and close the door.

That’s part of the brainstorming we’re constantly doing. The possibilities really are endless and that’s what’s so exciting about the emergence of voice activation.

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Target Adds Google Voice Assistant Shopping Nationwide

Target is the latest brick-and-mortar brand to sign on to accept requests made by owners of the Google Home through their voice-activated Google Assistant (aka “Okay, Google”) for delivery or pickup via its local online shopping marketplace Google Express.

In essence, the arrangement represents an expansion of Target’s existing use of Google Express.

Starting today, Target shoppers at most of its 1,800 stores in the United States can access items through Google Express and with the Google Assistant (except for Alaska and Hawaii). Target will offer two-day delivery, as well as free shipping for any orders over $35, Google says in a blog post.

Coming In 2018

Most of the capabilities of shopping through Google Express won’t be available until 2018. For example, after the new year, Target customers will also be able to use their Target loyalty membership through REDcard to get 5 percent off most Target purchases and free shipping when using Google Express. In addition, in 2018, Target shoppers will be able to link their Target.com and Google accounts, so the service will remember all their favorite items.

“We’re teaming up with Google to create innovative digital experiences using voice and other cutting-edge technologies to elevate Target’s strength in style areas such as home, apparel and beauty,” Target says. “Work is underway for Google and Target teams to bring this all to life.”

In August, Walmart unveiled plans to rollout a similar voice-activated shopping via Google Express and Google Home tools for its 4,700 U.S. stores and its fulfillment network “to create customer experiences that don’t currently exist within voice shopping anywhere else,” including choosing to pick up an order in store (often for a discount) or using voice shopping to purchase fresh groceries across the country.

These partnership on voice-activation comes roughly a year after Google Home debuted as a Connected Home product to augment Google Assistant.

“Shopping isn’t always as easy as it should be,” Sridhar Ramaswamy, SVP for Ads and Commerce, said in a blog post at the time of the Walmart deal’s announcement “When was the last time you needed to pick up something from the store but didn’t have the time to make the trip? Or you went to the store only to realize they didn’t have the brand you wanted? Wouldn’t it be nice if you could get what you want, however you want, from the stores where you already shop? We launched Google Express and shopping on the Google Assistant to do just that: make it faster and easier for you to shop your stores like Costco, Target and  Walmart.”

Okay, Google, Target shoppers are ready to talk.

Target’s Many Omnichannel Steps

For Target, the expanded Google partnership follows a series of steps designed to tackle one of the primary challenges facing its omnichannel strategy by rivals like Amazon. In August, for example, Target acquired transportation tech company Grand Junction to promise same-day delivery to customers to match one of key appeals of Amazon’s discount shopping subscription program, Prime.

It’s the latest salvo store brand has taken to meet consumers’ demands in the age of Amazon and e-commerce. Those demands include personalized recommendation and satisfying customers’ purchasing preferences, such as online shopping/in-store pickup.

But as 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.

The Rise Of Connected Intelligence, The Knowledge Graph

In general, the adoption of voice-activation and on-demand delivery/pickup follows the wider capabilities stemming from the rise of Connected Intelligence and the Knowledge Graph, which have propelled personalized, one-to-one connections between brands and digital assistants such as Amazon’s Alexa, Apple’s Siri, Google Assistant, Microsoft’s Cortana, and Samsung’s Bixby as they enter the mainstream of consumer behavior.

While Amazon’s Alexa has assumed an early position as a leading voice-activated assistant, Google has stepped up its push into the space as its aligns its services to brick-and-mortar brands such as Panera Bread, which became one of the first national restaurant chains to begin offering voice-activated ordering and payment through Google Assistant.

The voice-activated ordering is currently available in Panera’s hometown of St. Louis and at its six locations in the Silicon Valley area. A full rollout of voice ordering is expected to come to all of Panera’s 2,000-plus U.S. locations by the end of the year, the company has said.

Other national brands that have formally aligned with Google’s voice-activated virtual assistant to accept spoken orders via the delivery marketplace Google Express, including Costco, Guitar Center, Kohl’s, L’Occitane, Payless, PetSmart, Road Runner Sports, Sur La Table, Ulta, Walgreens, and Amazon’s Whole Foods.

In the case of Target, the retailer has been aggressively — and at times, fitfully — revising its omnichannel strategy. For example, earlier this year, it decided to abandon its sub rosa e-commerce program called Goldfish, which was dubbed as the “store of the future.”

Before that, in August 2015, Target started a beacon program with Estimote to round out its in-store sales assistance. It’s unclear how vital the beacon program has been — or even whether Target has continued to use it —  since the company has not discussed those efforts publicly. Along the way, Target’s experiments with interactivity has included retail pop-ups and a showcase IoT-based connected home store in San Francisco.

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How Discount Grocer Lidl Can Build Store Traffic Following US Launch

After experiencing a favorable introduction for its first 20 U.S. grocery stores in , German discount chain Lidl has been trying to establish its footing as it continues its East Coast expansion.

According to analysis by proximity platform inMarket, the dip in foot-traffic Lidl has seen at some of its stores in North Carolina and Virginia is afflicting others in the discount grocery space as Walmart ramped up its challenge against Amazon’s Whole Foods and Target.

Finding Traction

Lidl, which runs over 10,000 stores across 28 countries, “launched with a bang” this past June 15th, inMarket’s report notes. The company’s U.S. stores drew a decent 2.6 percent Share of Visits (SOV, as inMarket abbreviates it) on its introduction to the U.S. market.

The U.S. launch by Lidl appeared to take customers from another discount retailer BI-LO, which saw a decrease in visits from May to June, inMarket says. North Carolina- based Harris Teeter, which is a subsidiary of supermarket chain Kroger, also lost SOV in June, suggesting that consumers went to compare shopping at Lidl. (We’ve reached out to Lidl’s PR department and will update accordingly.)

Lidl saw an initial burst of store visits in the US this summer, but traffic has since declined.

But rather than cannibalizing the direct competition, inMarket points to Walmart’s gravitational pull as representing the biggest problem smaller supermarkets are facing, as the retail giant attracts about 30 percent of grocery visits.

“Many of those visits [to Walmart] are likely to involve grocery purchases,” inMarket says. “It’s interesting to note that Walmart dropped from 30 percent SOV in May to 29 percent SOV in June — perhaps as its cost-conscious shoppers went to check out Lidl. Fellow mass merch chain Target remained at from May to June at 9.3 percent SOV in these markets.”

Conquesting Reconsidered

Despite Lidl’s sudden rise, and its direct rivals’ dip in visits around the time of its debut, BI-LO, Walmart and Harris Teeter have all recovered SOV as of September, inMarket notes.

“It’s still very early for the retailer, so there’s definitely potential to turn things around,” inMarket Communications VP Dave Heinzinger tells GeoMarketing. “From our perspective, we know that location-based digital ad programs can help offline retailers drive foot traffic into stores.”

One area for Lidl US to explore is managing the digital presence of its growing network of American locations. Ensuring that consumers have the right discovery tools associated with digital presence management — nearest addresses for online searches, store hours, contact details, and reviews — could quickly expand its initial customer gains.

Heinzinger is interested to see if Lidl could make an impact by targeting competitive shoppers via smart, location-based retargeting programs. (For the record, Lidl does not employ inMarket, which relied on location data from the 50 million consumers who use the company’s partner apps).

“For example, our data shows that BI-LO and Walmart had dips in SOV during Lidl’s launch in June, while Whole Foods did not,” Heinzinger adds. “A top-line recommendation might be to focus on their strongest audience — the cost-conscious shopper — by conquesting BI-LO and Walmart shoppers through online-to-offline retargeting. They might also skip wasting dollars/impressions on uninterested Whole Foods shoppers.”

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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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Advertising Week Recap: Welcome To The Age Of Assistance — And Assistants

Advertising Week NY covered a great deal of ground last week, from Tencent’s expanded presence to the growth of Facebook Messenger as a marketing vehicle to the Weather Company’s heralding the Era of Cognition.

Retale Managing Director Nels Stromborg attended a number of events and meetings and here’s his takeaway.

Brands are taking action on transparency: Whether you’re a vendor, agency or seller, if you weren’t paying attention to the transparency debate, you are now. Brands are disappointed and upset; they’re running out of patience and taking action and it showed at the event. And to be honest, they have every right to be. The media supply chain has always been opaque. But in digital, it’s becoming more and more complicated, which has made the problem more pronounced. Spend has also exploded so advertisers want more accountability and a clearer view of ROI. The solution isn’t easy. Inventory sources need to address it by installing more third-party verification and opening up their data to partners. Agencies need to deliver on more transparent billing and measurement. While some progress is being made, there’s still a lot of work to be done.

 Alibaba versus Amazon: At Dmexco, Amazon was the belle of the ball. Their Amazon Services division had a big show. They used the event to tout their inventory, services and formats to advertisers (and retailers and CPG brands, in particular) – even if their current offerings are still very limited. I expect Amazon’s ad business to grow dramatically over the next year to support brand partners. But they were probably a bit jealous after seeing all of the attention Alibaba got at Advertising Week. GroupM announced a data partnership with them. Even Marc Pritchard spoke about their ability to disrupt the space. Their audience is almost entirely overseas, so their ad business doesn’t necessarily pose a threat to Amazon. But it’s fascinating to watch these massive e-commerce companies grow in influence among advertisers.

Google Americas’ President Allan Thygesen talks with Unilever USA CMO Keith Weed about Marketing in the Age of Assistants

The Age of Assistance: Get ready to see several hundred think pieces on “the age of assistance” over the next few weeks. Google’s Allan Thygesen used the phrase in a presentation with Unilever’s Keith Weed. It expertly captured a big technology shift in the market. It refers to the growing voice and chat bot movement in advertising. Consumers want more custom, personalized brand experiences. They like feeling like they’re the only one in the room – even if they’re online. For years, the best the industry could do was a well-targeted display ad. But bots have unlocked a more conversational and one-to-one campaign opportunity. That’s the potential brands see and love. They can deliver tailored, white glove service at scale through Facebook Messenger or your Amazon Echo. The AI needed to develop these tools has grown substantially better in the last three years, making it easier to meet the opportunity. The age of assistance is upon us and I think it’s here to stay.”

Leave content to the experts: The consensus on content during Advertising Week is that we are deep into a new golden age of “television.” This incredible programming is also increasingly being delivered free of advertising. What this dynamic does is make it almost irresistible for brands to stray from their core competency of product development and enter into the production business. During a panel hosted by FX, Joe Marchese, President of Fox’s Ad Products, relayed an interesting and recent exchange from a CPG. “They said, ‘We’re not in the paper towel business. We’re in the content business. We’re in the storytelling business.’ Which I look at and say, ‘Uh, I’m not sure you really want to do that, because you make paper towels!’ You hear (content) people talk about what it takes to break through, to make a story, make it timeless … [but] you need to sell paper towels tomorrow.” The point? Leave content to the experts – especially as the overall quality rises and the battle for attention becomes more competitive. Brands need to focus on what they do well.

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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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Nearly One-Third Of US Online Population Will Use Voice Assistants By 2019

While mobile-centric micro-moments has changed the way consumers search for and discover local businesses, the current revolution in voice-activation appears to be taking things in a different direction.

An eMarketer overview forecast of voice-enabled technology (subscription required), charts the rapid rise of Connected Intelligence-based digital assistants as making the transition from mobile to the living room.

At the moment, over 60.5 million people — 18.5 percent of the population — will use voice-activated assistants like Amazon’s Alexa, Apple’s Siri, Google Assistant, Microsoft’s Cortana, and Samsung’s Bixby, with one-third of US internet users speaking to voice assistants by 2019 (75.5 million people).

Finding Consumers’ Voice

In terms of the use cases, eMarketer cites a February study from HigherVisibility that says consumers primarily employ voice-activated assistants for “simple commands,” such as playing music (14.2 percent), setting alarms (12.6 percent), checking the weather (12.2 percent), looking up a contact (9.4 percent), and getting traffic info (7 percent).

Those numbers were further borne out by an NPR survey this summer that found most of the people surveyed used their smart speakers to play music (68 percent) or check the weather (58 percent), most of the uses offer additional points of connection for brands.

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

Looking more closely at search, 20 percent Google search queries are made via voice, while 25 percent of Microsoft Bing users speak their search requests.

The Search Is On

Understanding how people are using voice-activation is the first step, said Mike Grehan, CMO of Acronym and CEO SEMPO in a panel discussion on the topic last month.

In looking at how digital assistants are impacting search, Grehan pointed a study that found 60 percent of voice queries are from people seeking a service, not search,

“When you look at the patterns that you go through, voice is about recommending and suggesting, and then you have discovery, and then you have all those keywords that are not being used to find something on the web,” Grehan said, at the panel event, The Drum Search Awards USA, which was hosted at GeoMarketing parent Yext’s offices in NYC.

A report from Forrester this past spring warned that it was high time for CMOs to face the facts that digital advertising has not worked when it comes to engaging consumers and that the emerging role of voice-activated digital assistants and the connected intelligence that powers the devices by Amazon, Apple, Google, and Microsoft will lead to only further breakdown of traditional marketing models.

Ad executives have largely dismissed that warning.

“Is this the end of advertising? I don’t think so,” Fernando Machado, Head of Brand Marketing at Burger King, told us last month at an industry event. “New technology has always opened doors for advertising. This represented a creative way to get the message out, a new way to reach our target audience, to reach our fans. That’s how we see technology: a chance to develop bigger idea that can be deployed across different channels.”

Last April, an ad campaign promoting Burger King’s Whopper set off Google Home devicesby asking its personal digital assistant what the quick serve restaurant chain’s signature product was.

Within hours, Google “blocked” devices from recognizing the question.

In the spot (a 15-second YouTube version is here), a Burger King cashier addresses the audience saying that there’s too many “delicious ingredients” in the Whopper to list in a short commercial. So, instead, the cashier leans in to the camera and says, “But I’ve got an idea: Okay, Google, what is the Whopper Burger?”

Even though Google prevented its devices from responding to the prompt, the ad got more than 10 billion impressions around the globe, with the U.S. leading the charge, Machado said.

Anselmo Ramos, founder and chief creative officer of Miami’s DAVID The Agency, said that the spot was indicative of Burger King’s irreverent, try-anything spirit and how voice-activation will simply represent another channel — in other words, a new beginning for advertising, not the end.

“When you look at radio, everybody understands how to write a spot that hits all the emotional spots,” Ramos said. “With Google Home, no one knows. It’s no territory. So we need to guess and learn. Luckily, we have a great client in Burger King that is willing to embrace new ideas, new technology.”

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