Online Superpowers Clash to Own Your Budget

Feb 18

Online Superpowers Clash to Own Your Budget

I hadn’t realised online retailer had published an article I wrote back in November. Here it is:
You might not know it yet, but there is a war being waged by the online super-powers to own your local advertising spend. And it’s not big businesses they’re after – but the very large, long and lucrative tail of local (street) retail.

When I say local spend, I’m not referring to billboards or local newspapers. I’m talking about the ability for retailers to use new smartphone medias and technologies to attract new and existing customers in-store by advertising to them when they are ‘local’, and more importantly get shoppers buying. The new term for this is ‘location-based marketing’, and it runs the gamut from out-of-store advertising to in-store engagement using QR Codes and NFC (near-field communication).

But location-based marketing is more than just sending out spam messaging (shoppers are going to opt-out pretty quickly to that). It’s about giving retailers the ability to target the right shoppers, with the right message (at the right time and place – which only smartphones can do) and provide analytics to optimise every marketing dollar.

eBay is one of the titans flexing muscle in this space. PayPal is now 40% of their total business, and they are keen to own the transactions in the real world, not just online.

In the last two years PayPal has spent around $200 million on acquisitions like Milo, RedLaser and Where, and are now experimenting overseas with clever ways for retailers to make payments and loyalty in-store easy with mobiles and tablets. They want to build a suite of services that help retailers advertise, and then consummate the sale in-store, again and again.

The other titan is of course is Google. They know from search (and are trying their best to educate small retailers) that local is where the action is. 35% of all searches are local (DM News), and 82% of local searchers follow up offline via an in-store visit, phone call or purchase (TMP/ comScore).

Google has now built out Google Wallet, which has an ‘Offers’ component, and of course they have their own apps like Google Shopper and Google+ Local (old Places) which allows for retailers to make offers available locally. This isn’t gaining the traction Google would like however – probably because shoppers still have to do a lot of work to find the companies and offers they’re interested in.

There’s some other interesting angles to consider with Google. With their vast suite of consumer offerings (from Google Reminders, Shopping List, Mail, Apps etc) and ability to crack algorithms, they have the ability to own a consumer path-to-purchase and then part of the transaction. Scary or liberating for shoppers depending on your views around privacy.

If you think our streets are going to succumb to these titans, think again. Traditional media companies aren’t going to let Google and eBay eat their lunch. The big media companies are watching the local space carefully, and are beginning to build teams and make their own investments in Local – and that’s Australia too. We’re in for a turf war a bit similar to the Gold Rush in the 1800s – Local is the next big thing in advertising.

And I haven’t even mentioned the finance companies who are also keen to move into the space. American Express are experimenting in the social-local space with Twitter and Facebook, and have recently given merchants the ability in the US to target cardholders with relevant offers based on their transaction history. On our own shores the Commonwealth Bank is introducing Albert and Leo, open platforms that will allow developers to build apps to help with loyalty, engagement and payment.

Of course, there’s a myriad of companies beginning to play in this space with all sorts of offerings to retailers – namely loyalty, in-store engagement and customer discovery.

At StreetHawk, we’re using our big-data credentials to give retailers the ability to target their own shoppers when they are around their stores with personalised, targeted offers. Along with analytics tools, we’re a total location-based marketing solution for retailers.

Those retailers who are using targeted SMS and email realise that there’s great potential in adding time and place to their customer selections and promotions. For example, a customer who likes buying shoes is around their store – and they can target that shopper directly with a relevant offer once they ‘trip’ a geofence.

As I mentioned, we aren’t interested in the ‘once size fits all’ approach to mobile communication. That is a scenario shoppers aren’t going to be interested in once they start receiving regular notifications from all their downloaded apps. If you have the Facebook app, you’ll know what I’m talking about.

It’s an exciting – and scary – future for retailers. Disruption – absolutely, devastation – only for some. Those who start experimenting now will have first-mover advantage.

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