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Why Amazon Needs to Up its Location Marketing Game

Why Amazon Needs to Up its Location Marketing Game

To many it might seem strange that Amazon has plans to roll out physical convenience stores. There’s method in the madness, though. The e-commerce giant’s aim is to capture a share of the grocery market, which currently enjoys 20% of all consumer spending.

However, what is less apparent at this stage is how effective Amazon’s launch onto the high street will be in capturing this physical market share. Competition in this space is intense and Amazon’s ability to effectively market its new services will be critical to its offline success.

Optimising online campaigns is simple, with every consumer action being immediately measurable against digital ad spend, but how will Amazon continue to measure the effects of its marketing on its new brick and mortar stores?

Linking online and offline

This is where location technology comes into play, enabling retailers to understand whether consumers have visited their stores as a result of a specific ad. For the first time, brands are able to understand the link between online ad spend and real world sales.

The real opportunity rests in the fact that 89% of all purchases are still made through brick-and-mortar stores. Convenience stores give consumers the crucial option of being able to “touch and feel” the product before a purchase. According to xAd’s 2016 UK Mobile Path to Purchase, over half (57%) of respondents still visit a location as part of their research before making a purchase.

The importance of driving real world footfall through digital marketing has already started to filter into the weighting of digital ad spending. The recent PwC / Internet Advertising Bureau UK Digital Adspend report highlighted that spend on mobile display ads (£802 million) has overtaken PC and tablet display (£762 million) for the first time. In addition, Trinity Mirror reports that 72.3% of mobile marketers are now using location within their marketing.

As we head deeper into the ‘always on’ way of life, brands increasingly have the opportunity to influence and assist our purchase journey in the real world. The key question for brands focused on real world impact then is how they measure the success of online ads in driving consumers in-store and ultimately through to purchase?

A real-world cookie

As consumers travel from one place to the next throughout the day, they regularly engage with their phones. Through this engagement, they often share their device location information with their favourite sites and applications, essentially turning a mobile’s location data into a new kind of digital cookie. More than this, ultimately, location is the highest indicator of purchase intent and there is a huge opportunity to drive offline sales when brands use this location intelligence effectively.

For instance, just because Amazon vouchers are a popular search result, doesn’t mean Amazon has found the perfect audience for future online advertising. For example, many of these online customers are likely to be buying vouchers for family and friends. However, using location-based technology, Amazon can see anonymous and aggregated audiences who visit real-world Tesco stores, providing the opportunity to target these audiences with an appealing offer before they set off on their weekly shop.

Capitalising on location insights

Not only do retailers have the opportunity to see how online ad spend is making a real-world impact on sales through location intelligence, but they can also engage growing numbers of impatient and impulse shoppers in the moment by using location as the context to serve the best experiences. Take the findings of our Mobile Path to Purchase study; 20% of people who carry out retail related research on their phone want businesses to be within one mile of their current location.

Amazon, and every other grocery retailer alike, will need to rely on location more as competition increases to give people the best experiences across digital and real-world channels. Utilising location intelligence for audience insights, and location to deliver contextual experiences, will help deliver sales and serve customers better over multiple channels.

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Theo Theodorou

Theo Theodorou

Theo is the EMEA MD at location-based mobile advertising company xAd.

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