Can we precisely measure the impact of digital performance on retail?
Short answer; No, not yet. But we are getting close.
In the last financial year, Australians spent an estimated $20.1 billion in online retail. A level that is equivalent to around 6.8% of the traditional bricks and mortar retail sector – totalling $296.9 billion a year according to the ABS (source).
With only 6.8% of all Australian purchases done online. This sounds like a small number, and I optimistically thought it would have been higher by now. But when compared with USA, who are at 8.3% and a more mature market (source), this number doesn’t sound as small anymore. It does, however, give us an indication of how immature the online commerce market still is globally, let alone in Australia.
Given the current trend of online companies moving into the offline world, such as Amazon’s new books stores, and becoming click and mortar companies. These worlds are colliding more so than ever. When it comes to marketing, the ways to track performance from online to in-store is becoming more advanced and sought after.
We have the power to track every move a customer makes along their customer journey when online, but what happens when those conversions start online and end up in-store?
Well, there are a number of ways that are being rolled out across the major platforms to measure this. Here we are going to explore 3 ways this can be done using Google AdWords, Facebook Ads and Snapchat Sponsored Geofilters (Note: not all the mentioned technologies are fully available in Australia yet).
1. Measure store visits from Google AdWords using store visit conversions:
How does it work?:
Store visit conversions measure the millions of Google users opted in to sharing their location history, who have clicked on a Google Ad and then visited a store. A custom algorithm then extrapolates the data to account for non-signed in users who exhibit the same behavior. The algorithm is tailored specifically to your account and campaign using a number of signals such as location history, opt-in rate, Google sign in rate and country. Store visit conversion data is based on anonymous, aggregated stats.
“Store visit data can’t be tied to individual ad clicks or people. Google use industry best practices to ensure the privacy of individual users.” – Google
2. Measure store visits and in-store sales from Facebook Ads by using Facebook Store Visit metrics and Online Conversion API:
In an aim to help retailers bridge the gap between the online/offline world, Facebook has been rolling out new ad formats in the hope to drive visitors to physical stores and help retailers measure the impact of those ads.
93.2% of retail sales in Australia happen in stores (source), but people are increasingly researching products and business locations on their mobile phones. Facebook’s Store Visits objective bridges the gap between the online and offline worlds, helping businesses achieve their end objective of driving customers into a brick and mortar store.
How Does It Work?
The metric is estimated based on information from shoppers with location services enabled on their phone, as well as from merchants that use Facebook’s beacon – Facebook began giving them away last summer; ambient wifi and historical location information. The metric can focus on consumers who saw the Facebook ad within one day, seven days or 28 days before coming into the store.
An addition to this Facebook store metric, is the ‘Offline Conversion API’. This new metric provides an additional reporting solution available for advertisers to measure in-store sales conversions and attribute them to Facebook campaigns. The best part, is it can be connected to your CRM or even a POS system such as Square.
What targeting can be used?
Reach: Optimises for daily unique reach and shows “impressions” as the default metric within Ads Manager reporting. Available to all advertisers.
Store Visits: Optimises for the lowest cost per attributed store visit by increasing delivery towards customers who are more likely to visit a store. Store visit is the default metric within Ads Manager reporting when available.
Who is it available for?
Store visit optimisation and reporting is currently being tested by a small group of eligible Facebook clients. If you’re a current Facebook advertiser you will be notified by Facebook if your business is eligible. The Store Visits objective is for multi-location businesses with Locations enabled and works well for businesses in retail, grocery, and telecommunications as well as restaurants and auto dealerships. It will likely be rolled out globally soon.
3. Measure store visits from Snapchat using Snap to Store
In an aim to help retailers understand whether their ads are driving traffic to their stores, and likely in response to Facebook’s recent offering of online to offline conversions; Snapchat is introducing a new tool for advertisers called ‘Snap to Store’ that helps brands see how Sponsored Geofilters are performing among their users.
How does it work?
The idea is simple. Brands or individuals create geofilters that appear in Snapchat and can be applied by nearby users. Friends see these filters; which are really ads, and sometimes visit the same location to use them. Retailers can then use the tool to track the marginal increase in foot traffic from a Snapchat ad campaign, engage customers who have used Snapchat at one of their stores and examine aggregated demographic information about the consumers who have used the app in their stores.
Who is it available for?
It’s currently only available for advertisers who reach a certain spending threshold. Though will likely be rolled out to all advertisers in the future.
What data does it provide?
Visitors: The shoppers who saw the merchant’s ads, as well as how many of their shoppers are Snapchat users.
Lift: Compares Snapchat users who have seen the ad with a control group that hasn’t seen the ad to determine whether the ad drove consumers into the merchant’s store.
Aggregated insights: Breaks down shoppers by gender and age. Retailers can further break down those shoppers by examining age buckets within each gender, state, region and ad product type.
With location-based advertising that can drive and track in-store conversions, Google, Facebook and Snapchat are opening up a great new channel for advertisers. As online and offline merge, the future offerings for tracking between the two worlds will continue to evolve into a more accurate and consolidated solution.
If you’re struggling with measuring the effectiveness of your digital marketing and performance campaigns, feel free to contact us today for an obligation free consultation.
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