Location-Based Analytics Could Boost Retail Sales
When Toys “R” Us filed for bankruptcy last year, it contributed to a public impression that timeless household names in retail may be anything but timeless. The company's CEO noted that the Chapter 11 filing and resulting financial flexibility would help the toy store chain to grapple with “an increasingly challenging and rapidly changing retail marketplace worldwide.” This prompted a series of articles about brick-and-mortar businesses struggling to survive against competitive pressures in the digital age. It might not be so bleak. By leveraging customer data and location-based analytics, retailers could boost their sales, drawing newfound vitality from the digital era that threatens them.
Multiple tech startups are offering AI-powered solutions for retailers looking to get the most out of customer data. That data can be sourced through the retailers' own apps or purchased from third parties. Tokyo-based company Tamecco offers a product that is currently deployed at 2,500 brick-and-mortar-stores across Japan. Their website states, “Know when your customers come in and where they go, maximizing customer satisfaction with loyalty rewards and store layout improvements.”
Grey Jean Technologies also utilizes location-based marketing analytics. Their product can potentially lead to increased store visits, foot traffic, and basket size by allowing retail marketers to target their customers and prospects with more relevant marketing. Their website explains, “Grey Jean's AI-powered recommendation engine, Genie, provides the most accurate predictions of consumer purchase behavior based on transaction history, demographics, location, time, social media activity, preferences and behavior.”
Another company in this space, Teemo, describes itself as a “Drive-to-Store marketing platform that is revolutionizing retail advertising.” The platform has the ability to analyze consumer data, such as previously visited locations, and determine which ads resulted in store visits. Teemo's website explains, “We target your prospects based on the places they attend in real life.” Teemo acquires this data through direct mobile app partnerships and, to date, it has collected over 1,170 billion geolocation data points. Here again, each customer's location history is leveraged so that the retailer can identify the most valuable consumers, present a more personalized campaign, and increase conversions.
With all of these companies now extracting location-based insights on consumers, retailers have an opportunity to adapt. Is this the silver bullet against fierce eCommerce competition? Will consumers embrace a more personalized form of marketing, or will it prompt privacy concerns?
I spoke with Benoit Grouchko, CEO & Co-Founder at Teemo, to find out if location-based insights on consumers will enable brick-and-mortar to endure and potentially thrive. Grouchko noted that driving traffic in stores has become the number one strategic priority for many retailers. He co-founded Teemo because “there used to be a gap between the offline world of brick-and-mortar and the online world of digital marketing.” In the past, retail marketing was static whereas eCommerce businesses had access to better tools, allowing them “to personalize the digital marketing user experience, to target the right people, to measure the impact of the marketing program, and to optimize performance.” Teemo now offers these capabilities to brick-and-mortar. Grouchko also notes that “offline sales are still by far the biggest channel source of revenues for retailers.”
When asked what differentiates Teemo from its competitors, Grouchko replied that product performance and transparency are key factors. “It is very important for us to be very transparent with retailers in both the performance that we drive and how the product works,” he commented.
With a myriad of big data solutions on the market, Antoine Cormier, Marketing Director at Teemo, observed that it's not easy for retailers to choose. He explained, “The work we're doing is quite new, it's quite innovative for the market. And the thing is, there's no real standard in the market. So it's quite complicated for retailers to benchmark all the solutions because every vendor will say different things.”
Ultimately, Antoine Cormier and Benoit Grouchko believe that the robustness and sophistication of Teemo's technology will set them apart. Teemo was nominated as one of the “21 hot tech startups” at NRF 2018.
Craig Alberino, founder and CEO of ALTA AI Partners, previously a founder and CEO of Grey Jean Technologies, has long observed the inefficiencies that take place in digital ad spend when marketers treat consumers with a “one size fits all” approach.
“We bring together data assets from consumers and businesses and create a meaningful value exchange,” Alberino explained, when asked about his current venture. “Technology providers like my own company ALTA are there to help retailers push back on Amazon's efforts, both in eCommerce as well as in brick-and-mortar. So, you know, the intent of these platforms is to level the playing field a little bit if you will.”
When asked how he would frame the benefits of these sophisticated, analytical approaches to a possible client who's either a skeptic or a Luddite, Alberino responded, “I would say -- you already have many of the parts that you need to be able to speak to consumers at a more individual level. The benefits of doing so are lowering your overall marketing cost, because rather than broadcasting the same thing to everybody, you're narrowcasting very specific deals that are specific to individuals based upon their needs and their wants and their desires. You're no longer sending them noise.”
He continued, “It's individualized, which will get people to the bottom of the funnel sooner. So generally your marketing activities are more top of funnel. Digital spend gets you more towards middle of funnel. But you know if people are looking for attribution and measurement, the best attribution and measurement is going to be a sale. So, the ability for us to influence an actual sale is there, through the use of data and technologies like ALTA.”
According to Alberino, “There's been a land grab for data. And I think a lot of people don't know what to do with the data so they need a good partner.”
He explained, “We can help have a meaningful dialogue about what data assets you actually have and then implement specific signals and scores based upon our novel data, which is actually more implicit-based.”
The ease and convenience of at-home shopping will always be a lure away from brick-and-mortar. However, personalized ad campaigns based on customer data and location history could change the game, giving some iconic retailers a fighting chance.