The pandemic has created more chaos for the retail industry than arguably for any other. Despite all of the turbulence, the overall strength of the sector hasn't weakened. The COVID-19 lockdowns sparked a pendulum swing away from physical retail to e-commerce, but in the long term, traditional shopping will remain important. According to the latest Activate Consulting study, physical retail is predicted to garner more than 3x in sales ($21.4 trillion) than e-commerce ($6.5 trillion) by 2025. This isn't to say that technology will no longer disrupt established shopping patterns and the marketing technology used to optimize against those changes.
Retailers, as well as all marketers, would be well served innovating how they approach the shifting marketplace. With the focus in recent years on transparency, data ownership and user privacy, marketers have been forced to rethink. I predict that the collective headspace of our industry will be increasingly occupied by a new paradigm: brands that focus on the nascent notion of “store intelligence planning.”
In the programmatic era, making campaign targeting efficiency the priority has sparked major progress in the industry’s never-ending pursuit of mitigating ad spend waste. The effectiveness of audience targeting could actually be enhanced further if brands also attached greater emphasis to the power of store intelligence when planning their ad campaigns. This is an emerging school of thought in the retail community in which marketers balance their data collection and algorithmic expertise by placing equal importance on understanding their physical store locations as well as their customers.
Even if you get the most comprehensive profile of audience segments by gobbling up the vast range of behavioral signals that their digital footprints emit, at the end of the day, if your QSR store is a half-hour drive from where a target audience member lives, you’re likely not going to get them to drive that distance for a cheeseburger and fries. However, imagine if you flip the script and put your data scientists to work figuring out which local geographies within a specific catchment area have the highest concentration of your audience targets.
In so doing, you're asking an important but often ignored question: What is the “real” reach of your store? By combining two crucial data sets — where do your customers live or work, how do they commute, and how far are they willing to walk or drive to purchase from your brand — you'll be setting yourself up to fully optimize the potential of your physical stores. For example, a retailer could model a test, setting up a 30- to 90-day lookback window to gather insights that could drive consideration of where to map all of its stores for maximum benefit.
In so doing, you stop wasting your budgets and resources on a specific audience segment that will never go to the physical location. Instead, you will be able to sharpen your sights on consumers with the highest affinity for and the right mobility to access your product in-store. Depending on the DMA and the target demographic, that ideal travel time may differ by orders of magnitude.
By making store intelligence planning a cornerstone of your data-driven marketing paradigm, your brand will be well placed to also take advantage of the omnichannel evolution that's in motion for the next decade. The much-hyped Internet of Things from a few years back is truly gaining critical mass. Emerging 5G capabilities will only accelerate it. Major players are making big leaps in the virtual reality/augmented reality field. It's not far-fetched to start planning for a world where screens become marginalized because of VR/AR adoption at scale. Other advanced interfaces will live in smart homes/appliances, wearables and cars. This proliferation on top of traditional consumer journey signals like video, audio and traditional display will fundamentally change the way we live and the way that brands market.
Store intelligence planning is also not something that should pertain exclusively to retailers. This orientation should apply to all verticals, considering that physical sales is an important part of all marketer strategies. Privacy-compliant location data will grow to be a more vital signal for informing and shaping brand personalities and values going forward. At the end of these sorts of efforts, you might get a whole different understanding of who your customers really are.
As we begin 2021, a year of uncertainty in many respects, it's important to meet it with innovation. It's easy during tough times for marketers to adopt a defensive crouch, but innovation never goes out of style — whether times are good or bad. While audience-based marketing is evolving, we need to add new tools to the kit. Store intelligence planning is definitely one of them.
Stan Coignard, is CEO, Americas at S4M, a drive-to-store platform that bridges the digital and physical worlds.
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Stan Coignard serves as S4M’s Americas CEO and has been an executive board member since 2012.
As Americas CEO, Stan oversees S4M’s operations in the US, Canadian and LATAM markets. With more than 12 years of experience and entrepreneurship in the digital and mobile ecosystem, he is recognized as a top influencer in the field.
His career highlights include Managing Director at Isobar for the Mobile Media activity where he helped multinational brands such as Kellogg’s, Adidas, Coca-Cola, and L’Oréal define their strategies.
In 2018, Stan launched S4M Speakeasy, a unique think tank bringing together shopper marketing thought leaders to experience free-flowing discussions on current industry challenges.