The Reports of Retail’s Death are Greatly Exaggerated

We’ve all seen the headlines – “Brick and Mortar is Dead”, “Online shopping is the biggest thing in the universe”, etc… The growth of online shopping has been a popular headline for several years now, you can hardly look at any advertising related news sites without seeing an article with dire pronouncements about the death of real stores, and the huge growth of Amazon and other online retailers.  But just the other day Starbucks announced they were closing their online store.

And the numbers paint a very different picture, particularly for the Holiday shopping season. According to research by emarketer, “Ecommerce accounted for a record 10.6% of total retail sales in the US during the 2016 holiday season”. That means 90% of holiday shopping is done in stores. It’s important for advertisers to keep that fact in mind, and not put all their focus on the shiny object of digital/online.

Why do people still go to stores?

So, with all the growth in ecommerce, and benefits like free shipping and shopping in your pjs, what prompts people to get off their couch and go to the store?  Turns out there are several reasons…

A recent study by TimeTrade found that 72% of consumers still prefer shopping in stores because they want to “touch and feel” products before they make an actual purchase.  That tactile experience of evaluating a product is still an important part of the decision making process, and one that can’t be replicated online. The same study also found that 56% prefer to buy big ticket items in person for much the same reasons – they feel more comfortable making a decision when they can see and touch the product.

Customer service is also an important reason that consumers continue to go to retail locations. 63% said they thought store associates were “extremely important” to the retail experience (ChargeItSpot, 2017). This sentiment has not gone unnoticed. Many retailers are working to develop more personalized, concierge level service at their store locations. These services can range from higher levels of personal assistance, to integrating their in-store experience with their digital experience.

And when it comes to holiday shopping, it’s important to remember that consumers aren’t just buying gifts. “58% of consumers also plan to take advantage of holiday deals to make non-gift purchases….. Total spending for this category has reached its second highest level ever at approximately $140.” (National Retail Federation – 2016 Holiday Shopping Trends)

OOH reaches them on the path to purchase:

So while online shopping is a rapidly growing, and critically important factor for retailers, in-store shopping is far from gone, and needs to be accounted for in any marketing plan. This is even more important when it comes to the holiday shopping season which can account for as much as 30% of retailers’ sales for the year (National Retail Federation).

And if we’re talking about a media plan that can help drive consumers to purchase, Out of Home should be a key part of that plan. OOH reaches consumers in the same half hour as 96% of in-store shopping activity (USA Touchpoints, 2015). The ability to reach consumers in those last moments before they make a purchase is extremely valuable.

Not only should OOH be a part of your media plan, a recent study by Omnicom’s Benchmarketing group shows it should be a larger part. The study looked at ROI and media spend for several different verticals, across all stages of their sales funnel.  For the Retail (non-grocery) category, which currently spends about 6% of their media budget on Out of Home, the study recommends increasing that share to 15-20% of the overall media budget.  For consumer electronics (a popular category for holiday shopping) the study recommended increasing the OOH budget from its current 3% to 5-15%, depending on the desired effect.

Out of Home plays nice with mobile & search:

Out of Home can also integrate with your mobile/digital marketing efforts to make them more effective. Much of mobile search is done on the go, and this only increases during the holiday season as consumers are searching for deals, coupons & product reviews, or using social media to stay in touch with family and friends while shopping and traveling. The recent Nielsen study showed that OOH media helps drive Search activation at a rate that far exceeds its portion of the average media budget.

Retailers can drive in-store purchases by delivering special offers/coupons via mobile.  Out of Home media can be used as real world touchpoints that provide entry to the digital ecosystem. Media can be used to create geofenced areas for the delivery of mobile ads to consumers who have already seen the OOH. By targeting their mobile ads this way advertisers can significantly increase their ROI, as consumers are 48% more likely to click on a mobile ad after seeing the brand on Out of Home.

An opportunity to engage with Experiential:

The holiday season also provides a great opportunity to create some memorable and positive brand interactions via experiential activations. Consumers are busier and more stressed out than ever trying to navigate crowds and traffic, get the perfect gifts at the perfect prices, and get home in one piece. The opportunity here is for brands to provide a valuable service or something helpful.  Experiential activations can range from something simple, like a team distributing coffee/cocoa and snacks, to something more involved, like a complimentary gift wrapping service for brand customers.

These experiences can make strong lasting impressions on consumers and help strengthen brand loyalty. The holiday season also provides a host of readymade experiential targets – from parades, to tree lighting ceremonies, to local Turkey Trots.

Out of Home is the gift that keeps on giving:

In our constant chase to keep up with the latest trends, sometimes we lose sight of simple truths that still influence behavior. In this case, people still go out to do a lot of their holiday shopping, and that puts them in position to be influenced by out of home media. The increase in traffic means increased reach and frequency for your OOH campaign, and with Out of Homes ability to integrate with mobile and drive search activation, it can also help boost your digital marketing efforts.

Consumers spend a lot of mental energy trying to find the perfect gift. When thinking about your brand or clients this quarter keep in mind – the perfect gift may be Out of Home.

Looking for those last minute steals for Q4? Contact us to find out how Out of Home can be the perfect stocking stuffer for your media plan: