Four Tips For Location-Led Retailers This Holiday Season

  • November 8, 2019 at 1:41 PM EST
  • By Retail TouchPoints Team
Jason Smith, Location Sciences
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By Jason Smith, Location Sciences

Retailers seeking an edge this holiday season will do well to immediately start asking questions about the location data underpinning their digital efforts if they hope to capitalize on the projected 3.7% year-over-year growth (Source: eMarketer) from U.S. holiday shopping in 2019, as well as to better engage consumers spending 5.8% (Source: IRI) more on private label products than ever before.

Consumer loyalty is on the wane in favor of price and convenience. To overcome this, retailers have begun to fight for foot traffic — and will do so even more in the coming months — pivoting in-store experiences to keep shoppers visiting more often and spending more. By investing in technology and partnerships, retailers are focused on making the shopping experience more convenient and approximate for shoppers — reimagining their marketing efforts to be there when and where their customers need them most.

On a related track, the importance of digital marketing channels has increased. Retailers are looking to outpace, outsmart and outshoot continued consumer demands and retailer competition. Of course, there’s an allure to Amazon’s e-Commerce dominance, but the reality is, more than 80% of all shopping occurs in the same battlegrounds we know and love — brick-and-mortar stores. So, it makes sense that the fight for customer spending would take place where the customer spends most of their time — on their mobile device and outside of their home.

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The absolute clutter and abundance of retail marketing across digital and placed-based media increases the need for data expertise. Laser-like precision in reaching desired customers — particularly when they are near a store — provides retailers with data signals to increase their value when shoppers are within proximity of a potential sale. All good, right? Not so fast.

Local ad spending continues to soar up to $149 billion in the U.S., but so has cultural sensitivity to the data that’s been used to fuel expenditure. Congressional hearings, the CCPA and emerging digital consent models have given way to more thoughtful consumer participation in data sharing, often limiting quality data signals that marketers rely on to win at point of purchase. We must ask ourselves: if data demand is up, data supply is down, and spending continues to rise — what does that mean?

Unfortunately, the answer is likely fraud, data negligence or a combination of the two. According to research from my company, Location Sciences, on average, 65% of every dollar spent on digitally enabled location marketing today is waste. Of that 65%, 29% of local marketing efforts deliver to the wrong location, leaving retailers high and dry when they need data to be at its best.

It all comes back to supply and demand. As the supply of valuable data — like GPS signals for location marketers — decreases, marketers and the buying technologies they trust unknowingly demand and spend more on location data with limited to no transparency into what they are buying. For most retailers, the GPS-level data helping them win at the point of conversion (POC) is replaced by less qualified data signals, such as IP addresses or completely fraudulent data created by fraudsters who mimic devices and data signals to mirror that of GPS. It’s a rather easy scheme to execute, since even the most sophisticated marketers aren’t requiring that their location data partners, or media supply sources, provide proof of the signals they use to meet retailer spend demands.

Fortunately, it’s not all doom and gloom. Of the 65% waste and fraud delivered, Location Sciences’ data recognizes that most (if not all) is coming from 60% of location suppliers. What this means is that only 40% of the marketplace meets optimal quality of data standards, and those suppliers are delivering a 10% to 40% increase in actual media performance as a result. The question now becomes, how do retailers distinguish good from bad and deliver successful location marketing this holiday season?

Here are four tips every retailer should follow:

  1. Require transparency into the data being used to meet your location marketing needs.
  2. Know what to look for — true GPS is the most optimal source of accuracy.
  3. Require an agnostic and nonpartisan source to validate the truth of the data signals within your location marketing. Much of today’s location-based marketplace is represented by “bundled” sales offering that mix media, measurement and data together.
  4. Seek data and media supply sources that have trusted third-party stamps of approval, signaling their commitment to trust and transparency in how they meet your retailer needs this holiday season.

In the run-up to the shopping frenzy that’s about to hit, savvier retailers will need every edge available to outperform their rivals. Why should they expect any less from the location data that plays an increasingly important role in that competition?

Jason Smith, Chief Business Officer at Location Sciences, brings more than 16 years of expertise in the digital advertising and out of home industries, most recently serving as Senior Partner and Managing Director at Mindshare Chicago’s Digital Investment Group and VP of Digital Investments at Horizon Media. He has led business and performance strategy for some of the industry’s most notable retail, casual dining, CPG and financial brands in the U.S., including GEICO, Capital One, Sleep Number, Kimberly Clark, General Mills and ACE Hardware. 

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