Digital Shopper Marketing Blues
By Rob Schmults, [email protected]
Forrester Research published a report on online shopper marketing tools in which it noted that many buzz-driven technologies didn’t seem to be getting much traction, while growth in the most common approaches (brand websites, retail specific content, etc.) “has either slowed, peaked, or essentially stopped.”
What gives? Why is this happening when the rest of online marketing is in the midst of such dynamic and innovative phases?
A large driver may come down to the way most online shopper marketers are thinking about budgets. First, it appears online shopper marketing has made the oft repeated mistake of assuming the presence of analogous offline budgets so that dollars will quickly move online. Second, the coop dollars they often seek to tap have powerful stakeholders unwilling to see these dollars reallocated.
If you’re a merchant at a retailer, often a part of your bonus is tied to the coop dollars (aka MDF) you secure. And it’s not uncommon for those dollars to flow straight to the bottom line: they aren’t actually spent on anything. Having a shopper marketing vendor taking a cut AND possibly redirecting them out of your budget is simply not in your best interest. So for the organizationally powerful merchants, the claims of shopper marketing to be a more effective use of coop tend to fall on deaf ears.
One solution is for digital shopper marketers to steer clear of co-op dollars and instead look to other sources of marketing spend. But that runs into a budgeting problem on the advertiser side. Because for most brands, their online marketing dollars are about bringing traffic to their own sites, not moving traffic around inside of retail sites. All their incentives are set-up around a closed loop model where dollars spent are tracked against direct sales delivered (or some other metric where direct sales aren’t an option). When the action takes place on another web site, that loop is broken.
So where does that leave shopper marketing?
As online advertising in general found, waiting for offline budgets to migrate can be a long slog. Trying to appropriate dollars away from organizationally powerful groups like the merchants inside of most retailers only compounds the problem.
Better to align with — and ideally expand — existing online budgets. For example, providing advertisers with a closed loop would allow them to integrate shopper marketing into existing online advertising efforts. Plus doing so creates a clear separation from co-op.
Amazon is doing exactly that by moving well beyond shopper marketing with offerings like Product Ads. W.R. Baird analyst Colin Sebastian notes such efforts “should provide incremental higher-margin advertising revenues, helping to subsidize low product prices. We continue to estimate that Amazon will generate $500 million to $1 billion in advertising revenues this year.”
And disconnecting from the notion of migrating offline budgets has an added benefit. It will make it easier for shopper marketing to find the proper online model. Creating digital versions of offline end caps and stores-within-a-store resembles similar attempts in the nineties to recreate TV and print ads online. While some test budgets did flow into these offerings, models that reflected the realities of the online medium ultimately eclipsed those that sought to slavishly mimic offline marketing vehicles.
Online marketing has been successful because it created new opportunities with new budgets, like search marketing or behavioral targeting. Shopper marketing needs to do the same for it to fully hit its stride.
Rob Schmults is SVP strategic partnerships at Intent Media, which helps retailers unlock their site traffic’s full value through predictive personalization and via risk-mitigated retail media. By scoring each visitor in real-time, Intent Media allows travel and retail sites to make smart decisions around what to show each visitor. He can be reached at [email protected].
ShopperTrak: January 2013
Total U.S. Shopper Traffic in Retail Stores and Malls for January 2013
Retailers pushed to extend the high level of holiday shopping and foot traffic by promoting post-holiday specials and markdowns on seasonal merchandise in January. However, as expected, shopper traffic continued to drop off significantly after the end of the holiday season.
Overall, retail foot traffic for January decreased 44.1 percent compared to December. Still, the first month of the year continued a positive year-over-year trend. Foot traffic for January 2013 increased 4 percent compared to the same month last year.
Martin Luther King Jr. Day fell on Jan. 21 this year, one week later than it did in 2012. This later date provided retailers extra time to market their post-holiday sales. Many shoppers responded, eager to hunt for bargains and redeem gift cards.
After the Martin Luther King Jr. holiday, shopping activity continued its seasonal decline, with shoppers momentarily retreating from stores. Retail foot traffic dropped to its lowest levels during the last week of January, but ShopperTrak forecasts it to pick up again in February.
“This lull in shopper activity will end as Valentine’s Day approaches,” said Bill Martin, ShopperTrak founder. “We predict consumers’ fatigue will wear off and they’ll again browse the stores for their valentines and seize the sales of Presidents Day weekend.”
ShopperTrak’s data and analyses in this article are based on counting billions of shoppers in more than 60,000 locations across 75 countries. ShopperTrak is a leading retail technology company that anonymously counts people, analyzes data and identifies opportunities to increase revenue for retailers, mall developers and entertainment venues. Find out more at http://www.shoppertrak.com.
Auto repair info site accelerates relationship with Cars.com
The leading online source for auto repair information has received additional funding and deepened its relationship with Cars.com.
RepairPal, already a featured content partner on Cars.com’s Web site, gives shoppers access to auto repair and maintenance estimates and advice for common problems from technicians which can result in a visit to a local auto parts retailer or a service department of a dealer or local repair shop.
"More than 86 percent of cars on the road today are past warranty. At a time when vehicle owners are holding onto their cars longer than ever, it’s critical that they have access to high quality independent information about repairs, maintenance advice and associated costs," said RepairPal CEO, Art Shaw. "We are excited to deepen our relationship with Cars.com and work together to bring their audience new solutions for managing vehicle ownership."
The investment positions Cars.com to further develop the service category with solutions for consumers seeking help and advice when it comes to maintaining their vehicles, and for dealerships looking to boost their service business. Cars.com also intends to develop new offerings to help its local dealer partners reach vehicle owners in need of service and repair and to more effectively compete for their business.
"Cars.com has always been a trusted and credible source of information in the shopping process. Consumers rely on us at all stages of buying for research, advice and reviews to guide their vehicle and dealership selection," said Cars.com president, Mitch Golub. "But when it comes to maintaining a vehicle, there is a lot of confusion among consumers. We see an opportunity to transform the repair category and provide vehicle owners the same credible advice they have come to depend on us for when it comes time to service or repair their car."