At the heart of retail success is localization -- from product assortment to in-store marketing. However, when it comes to digital advertising, few retailers are thinking local. National advertising campaigns continue to push a corporate message without localizing it for each store. In addition, new research surprisingly shows that few retailers are using digital to create local campaigns that drive people into their stores.
Recently, Retail Systems Research (RSR) completed an evaluation of how well national brick-and-mortar retailers are using digital experiences to drive traffic to stores. Among the 20 retailers, analysts discovered two approaches: a broad-brush approach to all kinds of digital channels and a more specialized goal to make localization a priority. While there are a few examples of retailers who are starting to "get it" (e.g., Macy's, Kohl's), for the most part, national retailers are missing an enormous opportunity by not taking advantage of localized advertising.
Going local this holiday season
According to the National Retail Federation, holiday sales can represent anywhere between 25 and 40 percent of retailers' annual sales. Furthermore, U.S. Census data indicate that approximately 75 percent of all consumer spending occurs at retail locations within 15 miles of home. Together, the holidays and local customers represent huge numbers. As they plan their holiday media campaigns, retailers and brands (and the agencies that represent them) should evaluate their local digital advertising strategy in order to determine new ways to drive foot traffic and sales at physical store locations.
Here are a few tips:
Localize national campaign assets
In a recent report, RSR recommends that retailers rethink their video strategies. Retailers, and the brands they carry, can run campaigns in a locally relevant way by seamlessly changing creative -- in this case, video -- based on location, promotion, time of day, and more. For example, a retailer can extend existing TV campaigns and user engagement with dynamic online video ads.
Use local to move excess inventory in the final 72 hours to avoid post-holiday markdowns
Retailers are often focused on selling excess inventory ordered for the holidays before the New Year. Otherwise, they are forced to heavily discount items or return them to the manufacturer. By conducting local campaigns that leverage a wide range of datasets -- including demographic, interest, and purchase data -- to pinpoint neighborhoods where the qualified audience lives, retailers and brands can create highly customized advertising campaigns that reach a very specific audience, This can help them drive in-store sales of products that would have become excess inventory. This approach also helps to reach the last-minute shoppers who have run out of time to purchase gifts online in the final 72 hours of the holiday shopping season.
Create "just in time" demand
Most advertising programs require brands and retailers to create campaigns weeks or months in advance of when they'd like to drive traffic to stores. By creating a highly localized digital campaign, brands, retailers, and restaurants of any size can easily create and execute a campaign to drive "just in time" demand for their products or services. For instance, if in-store sales are slow, organizations can create campaigns that incentivize local consumers to come in and make purchases. In the case of local restaurants, their goal is to drive traffic into their establishment each day of the week. By creating highly targeted campaigns that reach a different demographic every day of the week, restaurants can create event-based promotions that drive traffic and build a diverse customer base. For instance, restaurants can attract a primarily male audience with Monday Night Football specials or families with Wednesday night "kids eat free" deals.
Use social to create local communities that encourage store visits
Walmart recently made headlines when it announced the launch of a Facebook app that customizes marketing messages for each of its nearly 3,600 U.S. stores; smart move, right? Now, Walmart is able to offer tailored marketing messages about deals and events at the nearest store location, thereby creating a more personal connection with its shoppers.
Retailers and brands are just starting to learn the basics of localized digital advertising, and there is certainly a lot of opportunity. By developing a highly targeted neighborhood-level digital advertising strategy to mirror local in-store marketing, retailers and brands can effectively drive store traffic that helps to increase revenue and create a more personal relationship with customers -- all while developing a more sustainable pattern of business.
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