January 08, 2019 | DOUGLAS HARTUNG
This blog was co-authored by Google’s Head of Local Shopping, Nathalie Walton, and DN’s Senior Director of Business Development, Douglas Hartung.
When you look at how enamored people are with their smartphones these days, it’s easy to imagine that the cool kids buy everything online with their smart phones. But while mobile is increasingly used to discover and research new products, the vast majority of all commerce is still conducted by walking into a physical store. Yes, the $500 billion in online sales is a significant shift from the past—but it is important to remember that total retail sales is more than $3.6 trillion.
While actual online retail sales still remain a small minority of total sales, smartphone-impacted retail sales are now more than one third of total retail sales (that behavior accounted for $1.3 trillion in physical store spend last year). When the rubber meets the road, the actual purchases are still mainly happening at brick-and-mortar locations.
Which leads us to the advertising attribution problem embedded in this evolving consumer behavior: while marketers can track their online and digital advertising from impression to click-thru to purchase when consumers purchase online, brick-and-mortar retailers have had extremely limited options to attribute digital marketing to physical store purchases or to be able to get a gauge of a user's intent to purchase and the influence an ad had on their behavior by tracking signals like store visits. Clipping coupons won’t cut it anymore, and streamlining the process can involve a significant IT project at a time when margins remain thin.
Bringing our companies’ strengths together at the table enabled us to solve this problem for our clients: How can we assist retailers in promoting online and attributing this advertising to purchases in store with a great consumer experience but without a large IT project for our mutual customers? Built on the DN Vynamic™ suite of software solutions, integrated in to Google’s Local Inventory Ads program, we’re able to close the loop on marketing attribution. And critically, it’s possible to connect the dots to get the capabilities up and running without a large IT project request, one of the main challenges we see hampering retailers’ abilities to enable this kind of solution.
It’s all about the Data
Retailers have varying levels of data about their consumers—if you’ve got a loyalty app or CRM system, you’ve got consumer data. For example, DN’s Vynamic Checkout solution contains information about local inventory, POS data and underlying store data. Google can use this data to present local shoppers with relevant items nearby. Vynamic Engage provides the bridge between these backend systems to quickly and simply integrate those two critical information stores, enabling retailers to manage their loyalty program while also driving net new sales digitally.
Through the Vynamic Engage platform, a retailer can use Google to reach customers from their own loyalty or CRM system (because let’s face it: there’s a big difference between a loyal customer and a consumer who signs up for a loyalty program) while also attracting similar customers who are not part of your loyalty program. Google powers the local component of the marketing initiative and enables real-time inventory information to be served up to customers (“find a red sweater in Men’s size large near me”). When shoppers click through the ad, they can receive a specific offer on their mobile that is identified when they come into the store. Retailers can see that the customer made the purchase because they saw the ad online. And as a supplement, Google’s Store Visits product also enables measurement of visits to a store originating from an ad click, which is a strong indicator of purchase intent and behavioral influence.
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Building Partnerships for the Future of Connected Commerce
As open APIs and new regulations drive changes across the retail industry, collaboration among tech players is key. Customers expect seamless, intuitive transitions between their physical and digital worlds—which means tech companies and retailers must work together on the backend to ensure there are no obstacles in the path on their shopping journey.
Nathalie Walton is the Global Head of Local Shopping on Google Shopping's Business Development Team. She leads global partnerships for Google's Local Shopping Products, which are designed to bring in-store inventory online and increase traffic to the physical store. Most recently, her team launched the Local Feed Program where Google works directly with point-of-sale and inventory management companies to seamlessly enable retailers to share inventory data.