Going Local: Why Brands and Retailers Need to Get Serious in 2012

When retailers and brands activate advertising campaigns, they typically start at the DMA level. The goal is to blanket as many consumer outlets as possible in an effort to drive visibility for their product, service or sale. Yet, according to recent US Census data, approximately 75% of all US consumer spending occurs at retail locations within 15 miles of home. Are retailers and brands spending their money effectively when it comes to reaching only the neighborhoods where their precise customers live? 

 

Localization is critical to any brand strategy. Getting to know customers in the neighborhood is important, as they will likely provide repeat business. That said, retailers should evaluate their localization efforts to determine new ways to drive foot traffic and sales at their physical stores. Currently, this is done in-store by localizing POP and other promotional materials for a particular neighborhood’s demographic – whether it is young professionals in a city’s financial district or a suburban neighborhood with young families. Walking into the same retailer’s store in different neighborhoods should provide a different experience for different audiences.

 

So why is this level of localized advertising not happening more outside of the store? Channels like cable and print newspapers are targeted but are often too expensive and time consuming for many small to mid-sized retailers to invest in. Yet, by reaching potential customers at the neighborhood level with digital campaigns, retailers and brands can get much more targeted and serve the right ads to the right customers at the right time. In fact, according to a recent report from comScore, digital campaigns drive a 21% percent increase in offline store sales.

 

By using a solution that analyzes billions of data points including income, point of sale data, Web searches and interest psychographics, retailers and brands can target promotions at a highly specific demographic of potential buyers. For instance, if a retailer is looking to unload excess inventory of women’s summer clothing because it is nearing the end of the summer season, they can create a campaign targeted at homes within an eight mile radius and where there are women that fit key demographics like age, income and style interests.

 

This strategy is also effective around the holiday season. Retailers are often focused on selling excess inventory ordered for the holidays before the New Year. Otherwise, they must heavily discount items or return them to the manufacturer. By implementing highly-localized digital campaigns, retailers and brands can create customized advertising programs that reach a very specific audience and drive in-store sales of products that may create excess inventory if not sold during a particular time frame. 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.

 

While 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, highly-localized digital campaigns of any size can easily be created in a matter of hours by reusing digital assets. For instance, reusing video content created for a mass TV campaign can be very effective by simply using it for an online video advertising campaign. This also provides consistency across channels and increases the opportunity for ROI on creative teams’ investments. Video ads can also be customized with a specific store address or specific offer to leverage a local message.

 

In all, there are a number of ways that retailers and brands can more effectively pinpoint advertising campaigns to reach a highly-targeted audience and eliminate wasteful advertising spend. Retailers and brands should evaluate and build out digital localized campaigns as they plan for 2012 and beyond.