Mobile advertising accounts for 76% of that spending as marketers increasingly shift spending to the social network’s mobile ads.
Chains need to take better advantage of such tools as social media, a report says.
Individual stores once were better known as the local face of big retail chains, where store managers and clerks got to know individual customers and their shopping preferences. But chain-wide advertising campaigns traditionally pushed a corporate branding policy without localizing it to each store.
Now chains can have the best of both worlds, with new advertising channels and tools that retailers can control from headquarters while also tailoring advertising to individual stores. But not many are yet effectively implementing such advertising strategies, research and advisory firm Retail Systems Research LLC says in a study of 20 retailers.
The study, “The Local Approach: The State of Localized Advertising in Retail,” is based on a survey conducted in late June and early July of this year. Included among the 20 retailers were chains in the following categories: Department/Clothing Stores, Sporting Goods, Electronics and Casual Dining—categories that RSR figures represent a diverse pool of marketers that advertise frequently.
The study looked at retailers’ use of four general areas of advertising: traditional, including TV and print publications; digital, including online display ads, mobile ads and Internet search; alternative, including daily-deal web sites and offers made via Twitter and Facebook; and on-site communication, such as asking online customers for their e-mail addresses and mobile phone numbers in order to send them local store offers, and posting on-site offers pertaining to individual stores.
Here are the top five local advertisers overall, with their scores out of a maximum score of 45, followed by their rankings in the Internet Retailer Top 500 Guide:
● Macy’s Inc., 31.5; No. 17
● J.C. Penney Co. Inc., 31.0; No. 20
● The Sports Authority Inc., 30.5; No. 223
● Best Buy Co., 30.0; No, 11
● Kohl’s Corp., 26.5; No. 31
RSR also listed the leading local advertisers among each retail category it studied, along with their individual scores:
● Macy’s, 31.5
● J.C. Penney, 31.0
● Kohl’s, 26.5
● Nordstrom Inc., 25.0; No. 34
● Gap, 17.0; No. 24
● Best Buy, 30.0
● RadioShack Corp., 25.5; No 254
● Staples Inc., 25.0; No. 2
● Office Depot Inc., 18.5; No, 5
● hhgregg, 14.5
● Sports Authority, 30.5
● Bass Pro Shops, 22.5; No. 86
● Gander Mountain, 22.5; No. 154
● Dick’s Sporting Goods Inc., 19.5; No. 126
● Hibbett Sports, 9.0
To drive more traffic to stores, RSR suggests that retailers focus on the following ways to improve local advertising:
● Take advantage of the strengths of each communication channel to present something unique to consumers. A call to action for an in-store promotion presented on a mobile device, for example, must be shorter and more to the point than longer messages on web sites on in print ads;
● Include stores as part of the call to action. Nordstrom and Radio Shack, for example, use YouTube and other online advertising channels to drive traffic into stores;
● Rethink video strategies to include store merchandise. RSR cites an unusual lesson from men’s skincare brand Old Spice, which developed special YouTube video responses to reply to questions it received from consumers through Twitter.
RSR notes, however, that the results of its study were intended to produce only a snapshot of what retailers were doing in late June and early July, and the scores may not indicate these retailers’ long-term advertising performance nor how they will advertise during the coming holiday shopping season.
The firm notes that all marketers, including those outside retail, must learn how to better use the many new forms of communicating with consumers, including via social networks and mobile devices. It adds that this is even tougher for retailers, who must learn to balance the growing number of communication channels with the increased number of avenues to sell, while also balancing broad-based and local advertising. “For retailers, the challenge is compounded by a proliferation of selling channels alongside the fragmentation of communication channels—they increasingly have to drive traffic across more channels with communication tools that reach smaller groups of consumers, albeit in a potentially more targeted way,” the report says.
“As a whole, retailers have not implemented localization as a major part of their overall advertising strategy,” RSR says in the report.
To illustrate that point, RSR noted the following observations:
● Staples was the only retailer that varied the content of print advertising circulars based on geography;
● When it comes to promoting local stores on e-commerce sites, only Bass Pro Shops, Gander Mountain, Best Buy and Olive Garden provided a section on their web sites for showing detailed, store-specific information;
● Only seven of the 20 retailers used their web sites to solicit customers’ mobile phone numbers.