Don't Bring a Knife To A Gunfight

How to leverage new online advertising strategies

February 15, 2012 By Jay Habegger

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Bricks and mortar retailers are in a fight for their lives. The consumer path-to-purchase has migrated online, with Internet retailers benefiting to the detriment of traditional retailers who struggle to match the price points of their online competitors while their physical stores drag down margins. It makes you wonder why so many legacy retailers show up to this fight for the consumer without the right technologies.

An executive of a leading, forward-thinking retailer emailed me recently to ask about a disturbing observation. After the executive visited a page on his company's website describing products for sale, he then went to Amazon and saw an in-house Amazon ad promoting the same product he just looked at on his own site. Of course, the price was much lower on Amazon.

Needless to say, the executive wasn't pleased. In this fight for consumers, getting price-shopped on Amazon is hardly a rare occurrence, but this was something else altogether. Amazon is effectively greeting customers at the door and putting an explicit offer in front of the customer for the exact product they were looking at somewhere else and saying, "You should buy this at Amazon. Here's a better price."

This past holiday season, Amazon took the fight offline.In December, the online retailer offered shoppers discounts on most purchases made using its price-check scanner application.This strategy encouraged consumers to treat brick-and-mortar locations like "showrooms" and enabled Amazon to capture pricing data at retail locations.

While traditional retailers spend gobs of money being mass-marketers and driving large numbers of undifferentiated consumers into stores, Amazon and online retailers have embraced online technology to become mass-personalized marketers.

A mass-personalized marketer deploys marketing budgets and technologies designed to find and intercept consumers on the online path-to-purchase and tempt them with offers and messages aligned with specific behaviors and interests. As Amazon has demonstrated, mass-personalized marketing, low-prices and rapid distribution can be a lethal combination.

If Amazon and other online retailers are going to aggressively intercept consumers along the path-to-purchase, why aren't brick-and-mortar retailers using similar techniques to retain their existing customers?

The truth is, retailers can emulate the Amazon model immediately, without budget-breaking investments or radical change to their online marketing budget. Amazon's online reach is difficult to match, but brick-and-mortar retailers can quickly emulate the mass-personalized-marketing model through re-targeting, audience targeting and geographic "net blocks" around store locations.Retailers can even share their online audience data with their manufacturing partners to deliver more personalized advertising, through a new technique called co-operative audience sharing.