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Can Digital Finally Drive Offline Sales At Scale?

  |  January 7, 2014   |  Comments

Sales are the lifeblood of every business; it's important to remember that while e-commerce sales have climbed every year for over a decade, 94.6 percent of total US retail sales in Q3 2013 occurred offline.

shopping-dataDigital marketers have long struggled to drive offline sales. Not only has it been near impossible to track, rendering attribution futile, but how consumers shop has gotten complicated. Top thinkers have tried diligently to map the purchase journey and redefine the purchase "funnel" into more of a swirling set of orbiting planets and compulsions.

In the face of these challenges, many marketers have decided to focus their digital efforts on branding and awareness, driving more "middle of the funnel" activity like product consideration and email capture or e-commerce conversions.

These aren't bad objectives. In fact, they're great, and there is a lot of brand and business value to be derived online; I know, I've been a digital marketer for over twenty years. But sales are the lifeblood of every business, and it's important to remember that while e-commerce sales have climbed every year for over a decade, in Q3 2013, for example, 94.6 percent of total US retail sales occurred offline.

I bring this up not to diminish the astounding efforts and success of e-commerce. For, as the digital world continues its proud march into every facet of our lives, for the first time, our digital and offline worlds are starting to blur in significant ways.

Is This the Year Digital Marketing for Offline Sales Becomes Scalable?

As a result, 2014 will be a huge year in digital marketing's ability to drive offline sales. The implication for digital marketing, especially when it comes to media and resource spends, will be equally huge.

At the center of this opportunity, as with everything else in digital, is mobile. Mobile commerce, while interesting and important, is driven mostly by tablets and is likely to help fuel the growth of e-commerce but not impact offline retail very much. What is really driving the connection between digital and offline retail are, wait for it... smartphones. No surprise here.

Here's an example of what can be done today:

We can programmatically (using data and conversion "triggers") target our highest-value customers on Facebook with rich content and an offer to redeem a coupon. With a single tap, that coupon can be dropped into a mobile wallet like Apple Passbook or Google Wallet. We can optimize the media and the content to drive coupon claims and today, can reach astounding cost per lead (CPL) rates, enabling us to drive coupon claims at scale. Apple Passbook, which is embedded in every iPhone, will then automatically alert everyone with the coupon when they get close to any defined retail store. It is built-in. Promote a Kohl's coupon, alert them when they pull into any Kohl's parking lot. This alone is magic and has already bridged the gap between digital and retail; we've driven them in-store with an incentive to buy. For many retailers, this is high-value enough.

But in the next phase, with the deployment of iBeacon/Bluetooth Low Energy, we will be able to drive consumers from digital directly to our specific products in-store, and even through checkout, providing data at every step in the process.

We've a Long Way To Go Yet

While much of the connective technology isn't new, it's coming together in new ways, becoming more mainstream for consumers, brands and retailers, and the costs -- wow, the costs -- to set-up, manage and execute end-to-end campaigns is falling drastically.

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While vicinity-aware alerting mobile coupons are just one example, they are compelling to say the least. Coupons are the most used traffic and loyalty tactic in retail. From grocery to high-end apparel, coupons have become de rigueur. Generally, they work, and with consumer trends toward mobile, there's real interest in how to make mobile coupons work at scale, by both retailers and manufacturers.

Unfortunately, there's still work to be done. In a recent blog post by Andrew Coleman, a promotions planning manager at Inmar, he shares the core challenge - "redemption ubiquity:"

"Make no mistake: mobile barcodes are not fiction. They work. They're real! They simply don't yet work with the same ease and simplicity (read: redemption ubiquity) that their paper counterparts enjoy."

So, for now, brands with large retailer networks must stick with retailer-specific promotions to drive ease of use and redemption, but as mobile payment technology proliferates quickly, "redemption ubiquity" should get closer and closer.

What's on the Horizon for Offline Retail Digital Marketers?

In the meantime, we can expect 2014 to be a ridiculous year for building these bridges. Smartphone apps are the hub of consumers' digital lives, keeping them connected and now communicating with everything from the watch on their wrist to the scale in the bathroom to the shelf of mascara in aisle 6.

In the app world, incumbents will innovate and start-ups will create wholly new ways to leverage the emerging tech. For example, we can only assume that since Facebook is so eager to prove the value of its ad offerings, it will make its mobile apps vicinity and iBeacon-aware, enabling retailers to leverage the Open Graph to provide relevant info in real time in-store as well as derive new levels of location insights to optimize its Facebook marketing efforts and ad dollars.

I don't remember being more excited about a set of new technologies and marketing opportunities in my entire career. If we are able to even make baby steps toward directly and consistently driving and tracking offline sales, it will be a remarkable year. I'm so excited to be part of this next phase.

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ABOUT THE AUTHOR

Marko Muellner

Marko Muellner has been a digital marketer for over 18 years, with deep experience in cross-channel, integrated, and multi-touch marketing strategy, creative development, and account management. He has spent his time learning how digital and social media marketing is applied in non-profits, international digital agencies, .com start-ups, global sportswear and beer companies, and at a top-tier web analytics and optimization company. This experience has brought him to the stage as a featured speaker at the Luxury Interactive Conference. His social media and digital marketing expertise have been featured in Luxury Daily, the SmartBlog on Social Media, Mobile Marketer, InsideSocialCommerce, and Facebook Advanced. He can be reached at @markozm.

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