Curing In-store No-Sales Syndrome: Why Mobile Advertising ...€¦ · brick and mortar chains became faced with an “adapt or die” scenario. Category killers like Toys ‘R’

Curing In-store No-Sales Syndrome:

Why Mobile Advertising Is the “New Black” in Retail

RETAILDIVE.COM PLAYBOOK

RETAILDIVE.COM HealthcareBra nd St udio2

he retail industry has undergone

extraordinary change over the last

15 years. And, traffic at brick and

mortar chains has dramatically fallen as more

consumers embrace the Internet for comparison

shopping and purchases. At the same time,

traditional means of reaching consumers

through mass mediums like television, radio

and print are becoming less effective given the

wide array of entertainment and news content

consumers can now find online.

However, the emergence of mobile devices

like smartphones and tablets offers enormous

opportunities for all retailers, especially ones

looking to connect their mobile advertising

with physical stores. Combining the location

features of mobile devices with deep pools of

consumer data, retailers can deliver targeted,

highly relevant ads to shoppers whether they

are researching a product at home, playing a

game at a bus stop or walking through the aisle

of a particular store.

TIn 2016, U.S. advertisers will spend $40.24

billion to reach consumers on tablets and mobile

phones, more than doubling the total from 2014,

according to eMarketer.1 But retailers have been

slow to embrace mobile ads due in part to

uncertainty of how to measure whether those

ads are working. However, new technologies

have emerged that enable retailers to not only

track store traffic but also purchases at the

cash register, allowing them to design effective

mobile ad campaigns to best suit the 21-century

digital customer.

New technologies have emerged that enable retailers to not only track store traffic

but also purchases at the cash register.

RETAILDIVE.COM 2

1 eMarketer. 2015. Mobile Ad Spend to Top $100 Billion Worldwide in 2016, 51% of Digital Market. Retrieved from http://www.emarketer.com/Article/Mobile-Ad-Spend-Top-100-Billion-Worldwide-2016-51-of-Digital-Market/1012299.


Shifting Strategy

With a few exceptions, brick and mortar retailers

largely missed out on the first Internet desktop

computer revolution of the 1990s. At the time,

the Internet was still considered an untested,

exotic technology and retailers either ignored

it or failed to invest sufficient resources into

developing an effective digital marketing strategy.

Moreover, physical stores were still performing

well, so retailers had no financial incentive to

change the status quo.

But as large e-commerce sites like Amazon

began to thrive and threaten in-store sales,

brick and mortar chains became faced with an

“adapt or die” scenario. Category killers like Toys

‘R’ Us and Best Buy saw steep sales declines

while venerable chains like Borders and Circuit

City went out of business. For instance, Toys

‘R’ Us is expected to hire 5,000 less seasonal

employees during the 2015 holiday shopping

season compared to 2014, a possible result of a

5% decline in in-store purchases.

Today, retailers are trying to quickly build-up

operations across multiple buying channels in

order to offset waning sales at physical stores.

Enter the mobile device. Whereas retailers failed

to grasp the importance of the Internet the first

time around, the emergence of the smartphone

and tablet - equipped with the convenience of

high speed Internet anywhere - offers stores a

second shot at the digital revolution.

According to research from Deloitte, nearly half

of all U.S. consumers own a smartphone and

of that group, 58 percent use the device for


store-related shopping. In fact, Deloitte estimates

mobile devices will influence about $700 billion

of retail sales by 2016.2

“Mobile is the best behavioral measurement

tool that’s ever come to pass in our lives and

commercially,” said Michael Becker, co-founder

and managing partner of mCordis. “We can now

use mobile to monitor and measure somebody’s

activity, somebody’s location. We can then

correlate my search behavior with my actual

location and physical behavior, and then use that

to inform all forms of marketing and advertising.

We can now start using mobility as a data

intelligence tool to then inform our marketing and

advertising.”

Geofencing, which allows marketers to send

personalized messages to consumers based on

the location of their mobile device, is especially

useful. Marketers can run relevant ads to

consumers who happen to be near a particular

store or engaged in a specific context.

“70 percent of all mobile searches on a mobile

device are acted upon within an hour whereas

on desktop, only 30 percent are acted upon

within an hour,” said Jamie Turner, CEO and

founder of 60 Second Communications. “What

that tells us is that when somebody does a

search, a Google search or Bing search on their

smartphone, they are ready to buy and so they

act on that search within an hour. So running

“Mobile is the best behavioral measurement

tool that’s ever come to pass in our lives and

commercially.”-Michael Becker, Co-founder & Managing Partner of mCordis

RETAILDIVE.COM 4

2 Deloitte. 2012. The Dawn of Mobile Influence: Discovering the value of mobile in Retail. Retrieved from hhttp://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-retail-mobile-influence-factor-062712.pdf.


ads to people who are within five miles of my

retail location would be effective.”

For example, Turner recently worked on a

campaign with a global hotel chain to boost

online reservations by placing mobile ads to

consumers when they visited car rental stations.

“What we know for this hotel chain is that their

number one customers are going to be people

who are business travelers,” Turner said. “We are

going to just target people who are at car rental

counters, near airports during Monday through

Friday because we know that they would be

business travelers. The ad would say, ‘Hey, let’s

go ahead and click on this ad and book a hotel

room now.’”

Turner adds, “It was a highly targeted, very

sophisticated campaign that was able to just

talk to people who are in our target market in a

“70 percent of all mobile searches on a mobile device are acted upon within an hour whereas on desktop, only 30 percent are acted upon within an hour.”-Jamie Turner, CEO & Founder of 60 Second Communications

very specific way as opposed to the approach

of just doing a ‘let us just run ads that go out to

everybody,’” he said. “It’s a great way to show

how mobile can be used to target people and

take their purchase behaviors into consideration

as well as their location and context.”

4Info, a mobile ad platform provider, offers

another example of a successful mobile campaign

they developed for a national drug store chain.

The campaign sought to increase in-store sales

for convenience items. First, the campaign

would use analytics to identify consumers near

a particular store location based on their recent

purchase behavior. The campaign would then

send a contextualized ad to a consumer’s

smartphone or tablet promoting six various snack

products rotating on a display carousel. The

carousel would list the sale price of each item.

RETAILDIVE.COM 5


“You’re catching people who are known buyers

of convenience store products, and you’re

trying to redirect them to look to this specific

retailer as another option to get those items,”

said Chuck Moxley, chief marketing officer for

4Info. “Showing them [consumers] products

that they’re likely going to be interested in,

especially if they’re hungry, and telling them

you’re close by, that’s beautiful in terms of

the right audience, relevance and context all

coming together.”

Retailers can also deliver highly customized

ads to mobile devices based on the consumer’s

purchase histories.

“The basic approach would be ‘we know you

buy Coke so we’re going to send you an ad

to get you to buy more Coke,’” Turner said. “A

more sophisticated approach would be ‘we

know that the last time you were in Kroger, you

bought Folger’s coffee. We also know that it

takes about a week for somebody to go through

batch of coffee so we’re going to send you an ad

right before that week is up encouraging you to

switch from Folger’s to Maxwell House because

we know you’re about to run out of coffee.’”

Many retailers run loyalty programs, in which they

offer their best customers rewards—additional

discounts, offer or perks—the more they shop at

a particular store. About 47 percent of retailers

recently surveyed by Boston Retail Partners

said loyalty programs were a top priority—given

retaining customers costs about five to 10 times

less than acquiring new ones.

For example, Starbucks has launched a holiday

mobile campaign that encourages consumers

to register their gift cards with the My Starbucks

Reward program. After clicking on the mobile ad,

consumers can then instantly start redeeming

rewards and offers by entering the information

from the gift card straight to the brand’s iPhone,

iPad or Android app.

“You’re catching people who are known buyers of convenience

store products, and you’re trying to redirect them to look to this

specific retailer as another option to get those items.”

-Chuck Moxley, Chief Marketing Officer for 4Info

RETAILDIVE.COM 6

“The ability to identify the customer as they enter the store – via their smartphone ideally – allows the retailer to personalize the customer shopping experience in real time.”-Boston Retail Partners


Retailers with loyalty programs are already

sitting on vast pile of consumer data they can

use to drive additional sales by targeting mobile

devices with relevant content as they enter a

store.

“One of the best ways to identify customers and

collect customer information is through a loyalty

program,” according to Boston Retail Partners.

“Loyalty programs are a great way to encourage

customers to opt-in as they enter the store, by

providing loyalty information such as point

balances, rewards or personalized offers easily

accessible from smartphones.”

“The ability to identify the customer as they

enter the store – via their smartphone ideally –

allows the retailer to personalize the customer

shopping experience in real-time,” Boston Retail

Partners said.

Many consumers leave items in their online

checkout baskets without completing the

transaction. So when someone enters a Sephora

store, for example, the retailer will send special

offers to the consumer’s mobile device based

on their purchase history. In turn, the offer can

only be redeemed if the consumer buys the

remaining items in their online checkout basket

in-store.

Even still, adds Moxley, most retailers have yet

to embrace mobile ads. Retailers are either

intimidated by the technology or are not sure how

to measure the success of their campaigns. This

poses a unique problem for the industry given

the amount of consumer data retailers have

at their fingertips.s Essentially, the successful

adoption of mobile ads in retail depends upon

just how well retailers, despite the newness of


wigged-out on mobile,” Moxley said. “They

think: ‘It’s such a personal device and I have to

think of it differently.’ In the end, advertising is

advertising. You want to use the same principles

they would use for all their other media and

apply it to mobile.”

Sure, mobile devices can reveal location but

retailers must recognize context. “If you sell

electronics, like a new flat panel TV, consumers

are probably doing a ton of research on their

mobile device,” Moxley said. “They may be sitting

at home in the evening, reading consumer’s

ratings and reviews, and checking different

retailers on prices. That would be a great time to

reach each of them with content that focuses on

information and education. Meanwhile, they’re

out near a store, you might want to reach them

with a different message to get them into the

store. Reach them wherever they are, but use

their location for context and relevance.”

mobile, apply the same marketing principles

to mobile as they would for other marketing

channels. To do so, retailers must keep three

concepts in mind:

Consumers are increasingly using multiple

mobile devices to research products online

only to then conduct their purchases in-store.

According to Deloitte, once a consumer uses

a device within a store, they consistently use

their smartphone or tablet for a particular

category more than 50 percent of their trips to

that category. Moreover, smartphone users are

14 percent more likely than non-device users to

buy something at the store.

The technology may be new but the goal is

still the same as radio, television and print ads:

to influence people wherever they consume

media. “For some reason a lot of people get

1. Mobile is the future

2. Mobile ads are still ads

3. Context is king

RETAILDIVE.COM 8


Consumers are increasingly using smartphones

and tablets to research and make purchases

both in-store and online. This presents a perfect

opportunity for retailers to track, measure and

influence consumer buying behavior. The ability

to determine the location of a person’s mobile

device through geofencing combined with

data analytics offers retailers the chance to

deliver highly relevant ads that not only improve

the shopping experience but also enable a

personalized, more contextualized customer

journey.

Conclusion

RETAILDIVE.COM 9

4INFO has brought mobile display advertising out of experimental status and placed it squarely into the mainstream with other measurable media such as TV, radio, print, direct mail and online display. The AdHaven Platform enables true 1-to-1 precision targeting and measurement at scale, with no limitations.

Learn More

http://www.4info.com/