Thanks to the growing ubiquity of mobile devices, a digital revolution is about to transform bricks-and-mortar retailing—a fast-breaking phenomenon that potentially poses the biggest challenge yet to the economics of local media companies.

More than four out of five smartphone and tablet owners use their devices for shopping, according to a report (tinyurl.com/niemoshop) issued earlier this year by the Nielsen marketing metrics service. Nielsen says 65 percent of consumers research products before they head to a store, 66 percent of shoppers check prices in stores and 49 percent of them redeem coupons from their mobile phones.

Given all this click-to-buy-ing, it is perhaps no surprise that mobile-enabled commerce is projected by the eMarketer research service to nearly triple from today’s level to $113.6 billion by 2017. Now, here’s why publishers and other local media companies should worry: 

With more shoppers making buying decisions and actual purchases on their mobile devices, local retailers and national brands are bound to vector ever more of their marketing dollars into intercepting consumers on mobile platforms, thus diverting ever greater portions of their budgets away from the traditional print and broadcast media.

Retail advertising, without doubt, is the lifeblood of local media. In 2013, retail advertising accounted for 75 percent of the $14.5 billion in advertising sold by local television stations, 43 percent of the $23.5 billion in ads sold by newspapers and 38 percent of the $4.2 billion in ads sold by local radio.  The broadcast information was provided by Kantar Media and newspaper statistics came from the Newspaper Association of America. 

The rush to digital retailing dominated a June conference in San Francisco sponsored by Street Fight, a smart online news service covering the myriad ways that prodigiously funded start-up companies are developing high-tech solutions to such pressing problems as C2C (Coffee to Commuter), S2S (Shoes to Shopper) and PP2CP (Pepperoni Pizza to Couch Potato). 

Although these commercial goals may seem modest, the technologies, algorithms, analytics and business models developed to solve these problems likely will pave the way to changing how brands target prospects and merchants, smooth the myriad frictions associated with driving to the mall, navigating a store, selecting a product, fishing out a credit card and schlepping the purchase home.  

“We don’t believe shopping centers are dead,” says Nicholas Cabrera, who researches the future of retailing for Westfield Group, one of the largest mall operators in the world. But Cabrera told the Street Fight audience that technology is poised to “transform” shopping into a more pleasant experience for consumers—and a more productive one for merchants.

Here’s how that will happen:

Using apps, search engines, shopping sites, social media and volunteered information from consumers, everyone in the shopping ecosystem—brands, retailers and even mall operators—will endeavor to learn as much as they can about individual customers. Then, using smartphones, Google Glasses, smartwatches and the like, they will put the right offer in front of the right consumer at the right time, perhaps even adjusting pricing dynamically to recruit desirable new customers.

Websites, social media, shopping portals and search engines already monitor content consumption, conversations, wish lists, shopping carts and buying behavior. They increasingly are combining this information with masses of acquired and derived data to pigeonhole consumers into ever-tighter segments in order to optimize marketing messages to them. 

In the interests of capturing real-time information about the intentions and behavior of consumers while they are in stores, a growing array of hardware, software, network and analytics companies intend to track customers via not only signals from their own devices but also with concealed cameras using sophisticated facial-recognition technology to gauge buying intent. Leaving nothing to chance, the newest Android phones can take your pulse to identify the shoes that quicken your heart.  

To capture even more data, nearly every major retailer has developed—or soon will launch—an app to help consumers organize their shopping excursions, redeem coupons, make payments and earn loyalty rewards. Walmart’s latest app even issues rebates to customers if it finds a product being sold for less by a competing merchant. Not so incidentally, the apps will help merchants learn tons about customers at the same time.

The retail revolution is nothing short of an arms race to accumulate as much information about individual customers as possible. Local media companies can be major winners in the revolution by developing delightful products that help merchants to capture and leverage customer data. If they fail to act, however, they will be marginalized as advertisers move to interactive marketing. 

While local publishers and broadcasters lack the technology to do this by themselves, their market presence and brand power are extremely valuable to the tech companies trying to solve far more than just the PP2CP problem. When potential partners come calling, media companies need to listen. Then, they need to respond as though their lives depend on it.

Alan D. Mutter is a former newspaper editor who became a Silicon Valley CEO.  Today, he serves as a technology consultant to media companies and a media consultant to tech companies.  He blogs at Reflections of a Newsosaur (www.newsosaur.blogspot.com). 


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Charlie Pankey | Thursday, August 14, 2014

Thank you for the great article. I was pleased to see you suggest that their are partners ready and willing to help Newspapers tap into this marketplace. Mobile Shopping could be a game changer for the industry and with our local strong connections Newspapers should lead the way in local marketplace for mobile shopping.

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