Has the internet changed the nature of the way shopping occurs in stores these days? more
Facebook Places, Foursquare and just about every Social Networking seems to be focusing on location these days. But the problem is they all rely on some sort of check-in, whether it be manual check-in by the user or using the latest GPS/Geo-fencing based check-in.
Everyone has heard of Google, but do you know Google's mission statement: "To organize the world’s information and make it universally accessible and useful."
Google generates revenue by providing advertisers the opportunity to reach a relevant and targeted audience. The advertisements are relevant because Google has "organized the information" and therefore the advertisements relates to the information displayed on web page. Also they are targeted because Google captures on-line session metrics (who visited what web-page) and targets the advertisement to the viewer demographic.
So far Google’s domain has been just the online world. However, online retail spend is less than 10% of the $4.5 trillion dollar retail industry – the majority, greater than 90%, happens in the physical retail store. The foot traffic in the offline world is staggering: 20 million visits are made to Wal-Mart every day. And since 70% of the purchase decision are made at the shelf, I would argue that the spend for relevant and targeted advertisements in the offline world will dramatically increase in the near future.
This has already started happening with the explosion of Location Based Services (LBS). Loopt, FindMe, FourSquare are just a few. The higher availability of GPS-enabled phones and the success of social networking sites has fueled this growth. But this is not the first time LBS apps are making news – the early 2000s was touted to be the era of LBS apps.
Sustained success will come from the ability to monetize this traffic. I feel that Location Based Services will have the greatest success in the physical retail store. After all this is where more than 90% of the $4.5 trillion retail dollars are spent. But in order to this, we will need the same level of relevance and targeting to in-store marketing just like Google did with online advertisements. This can be achieved by a very compelling location-based application which can be best described as “Presence Marketing.” Presence Marketing identifies the presence of customer within a retail store, and also captures consumer shopping behavior as session metrics much like Google and Amazon do with web traffic. The in-store session metrics can then be used as a knowledge services for targeted in-store marketing and loyalty.
So, if Google's mission truly is "to organize the world’s information and bring relevance to advertising", they won't be able to ignore the physical retail store for much longer. What’s your view? We would love to hear.
