Retailers: paper flyers are a waste of money

Jul 8

Retailers: paper flyers are a waste of money

StreetHawk’s HQ is in the CBD of Sydney – so we have a good handle on local retailer marketing methods. Because retailers are busy, they may not yet realise there are emerging smartphone location-based (LBS) marketing opportunities.

Retailer Paper Flyers

Over the last few years, eCommerce has increased customer acquisition significantly via internet and StreetHawk wants retailers on the street to get those smart tools too. Mobile LBS will be a great leap forward for retail. We think it’s a lot better that this example….

….I chuckled this morning when I passed this paper flyer stuck on a pole. It was repeated in a few places, so I stopped to watch local commuters and office workers response.

In 5 minutes around 9:15am (fairly high foot traffic time but not too busy), I estimate 70 people passed that sign, results for the marketing campaign?

  • 15+ glances (average attention/ exposure 15 seconds)
  • 0 reads
  • Footfall: “0 reads” = “0 footfall”

Extrapolating, I’d generously estimate the sign drives 2 leads per day per pole (sale is for 2 days). Lets have a look at the expense of the campaign:

Task/Effort Cost
Document Preparation – 30 minutes Staff@$60/hr fully loaded = $30
Printing on bubblejet for 10 sheets (5 poles both sides) – Colour! $2
Distribution (sticking ’em up) – 1 hour Staff@$60/hr = $60
Time lost in shop for the staff distributing Staff@$60/hr = $60
Sticky Tape – couldn’t find it so went to Penfolds – 10min Staff@$60/hr = $10
Sticky Tape – new roll $2.49
SUB-TOTAL -$164.49
FOOTFALL CONTRIBUTION (2 leads per pole, 5 poles over 2 days with 30% conversion in fashion, average sale $60, Margin 40%) $79.92
CAMPAIGN-TOTAL -$84.57 (LOSS)

The whole campaign LOSES MONEY …..Now, hopefully you tell this analysis is somewhat “tongue-in-cheek” but compare that with what location-based mobile advertising will provide you in 2011.

Based on statistics from Natasha’s previous posts here and here, footfall rates of smartphone shoppers (opening a deal) can be estimated at 20%. So if you publish a “sale” or a “deal” that reaches qualified** 500 shoppers (via the magic of the internet, not just passing a paper flyer on a pole) over the 2 days of the sale. Then its realistic to estimate 100 shoppers arrive at your door.

Task/Effort Cost
On your shop’s PC, Smartphone or Tablet, list a deal – 5 minutes including photos Staff@$60/hr fully loaded = $5
Listing Fees Depends on Provider – say $0-$30
SUB-TOTAL $5-$35
FOOTFALL CONTRIBUTION (100 leads for 2 days with 30% conversion in fashion, average sale $60,  margin 40%) $720.00
CAMPAIGN-TOTAL $685.00 PROFIT

So, whilst retailers have to work with existing methods and this is an hypothetical exercise, I wanted to give an example of how mobile LBS marketing is going to help retailers reduce marketing costs and increase efficiencies. StreetHawk believes that “bricks and mortar” retailers deserve the same efficiencies that eCommerce has been enjoying.

Give it some thought….and contact us if you want to know more.

** Qualified is when the Mobile offer has been matched to something the smartphone is seeking. This is the method StreetHawk is implementing to drive the best results for consumers and retailers.

  Get our Referral Program Guide