5 Reasons Local Marketing Improves Profitable Retail
Leveraging the consumer preference around a given retail location adds sales while building loyalty!
For years the phrase – ‘think global, act local’ has stood as a unique rallying cry for brands with multiple touchpoints/locations. The idea was to market your brand essence by:
- Featuring distinct local differences within the brand structure
- Building upon varying consumer tastes and habits unique to a given country, region or city
- Provide product inventory differences and preferences by country, region or city
Now – with digital targeting these unique local offerings can be even precisely target much needed traffic.
The shift of advertising dollars to local marketing has accelerated as new digital tools with location data and real time delivery features are introduced and validated. With online search heavily weighted toward local business (75% of search is local), the increased spend is good news to retailers.
In a recent AdAge Insight Trends Report, marketing dollars spent in all media locally is expected to reach $151 billion. And local digital will benefit the most by 26% to $39 billion in 2016.
Spending marketing dollars locally is NOT a new practice. Nor is it an unknown marketing advantage. Auto dealer associations, fast food chains, medical services and virtually most categories with local/national budgets have not only implemented that practice, many have adopted contractual obligations to spend at a defined specific level. While arriving at the percentage amount can be contentcious at times, the results are unmistakely evident and beneficial.
Here are 5 reasons why local marketing is growing even more important at improving retail profitability:
- Local marketing differences (taste, style, seasonality) can be a huge competitive advantage. Exploiting unique menu tastes and preferences based on the ethnic or demographic make up of the market has been a key driver for more frequent visits to chains even when their primary menu offering is well established.
- Local knowledge is king. Hyperlocal efforts leverages the understanding of shopper habits as well as competitive weaknesses that when exposed can drive retail profitability.
- Big brand messages are great for building a following BUT local executions that lead to a action is how brands survive andgrow. And products are not purchased nationally (except with online fulfillment centers)…products are still very much a local shopping experience. A retailer with a well established market footprint likely has multiple competitors therefore differentiating the offer with local component smart!
- Local marketing leads to local testing. The cost of trying new practices and offering new products or services come with high costs and variables that a local test can uncover BEFORE the heavy guns of spending or a national rollout occurs. Even if the item only stays as a part of local offering, the contribution to sales/product mix will be ultimate deciding factor.
- Local messaging/offers builds shopper loyalty. By understanding your customer’s behavior and the life style differences across a region, your messaging actually becomes more ‘personal and in sync’ with the shopper. Executed properly and consistently allows the retailer to build a connection with their best customers who share their experiences with others. Shoppers reward retailers for the ‘personal acknowledgement and consideration’.
- Local decisions by the retailers ‘on the ground’ simply see the opportunities first hand. There is no substitute for observation and interaction with your customers as they shop or consider a purchase. The best marketers have created the environment to encourage managers to make these decisions and have budgets to back up the plans.
With new digital tools, customer reviews and referrals and competitive pressure online as well as at brick and mortar locations means that retail profitability depends on better customer knowledge in the town or city where you’ve made the infrastructure commitment.
A marketing plan weighted locally can be the total difference between growth, survival and profitability.