Retailers and their CPG trading partners have a tremendous opportunity to use mobile tools to drive sales both online and in physical stores, according to Carlos Garcia, industry manager of global marketing at Facebook.
Garcia spoke at this year’s Digital Disruption Innovation Summit in Schaumburg, Ill., presented by Walgreens, Drug Store News and Mack Elevation.
While consumers are spending 28% of their time engaged with mobile devices, only 21% of ad spending is directed at mobile channels, he said, citing research from Kleiner Perkins Caufield Byers’ 2017 Internet Trends report.
“Every year, that gap closes a little bit, but it’s still a very significant gap,” Garcia said. “It’s a $16 billion gap, to be specific. That gap is also the opportunity for the companies that learn how to integrate mobile and digital into their businesses and into their marketing, and do it an effective way.”
Garcia outlined several strategies for engaging consumers via their mobile devices.
One key strategy involves delivering more personalized offers to shoppers by leveraging data to customize marketing content. Eighty percent of millennial and Gen Z consumers said they expect mobile ads to target their location, interest and habits, Garcia said, citing a Verve report.
Facebook works with retailers to layer loyalty program data on top of Facebook’s rich targeting abilities based on users’ online behavior. It can then incorporate machine learning to refine targeting based on past results.
“Your product starts to search for the right people based on all that information,” Garcia said.
Clothing retailer American Eagle saw a fourfold increase in its return on ad spending in a test of this strategy, which Facebook calls dynamic advertising, he said.
Retailers also have been working with Facebook to create targeted, digital experiences through what Facebook calls its canvas infrastructure — essentially microsites within Facebook that can be personalized for each user. Home furnishings retailer Ikea, for example, uses this canvas infrastructure to display tabs for its different departments that lead users to personalized experiences.
Tying mobile to in-store sales While these efforts around personalization can be used to help drive both online and offline sales, Garcia also described strategies that specifically focus on driving sales in the physical store.
For example, he said Walgreens had success with a “Coke Happy Hour” campaign in which the retailer partnered with Coca-Cola to target consumers with a buy-one, get-one-free offer for a 20-oz. Coke at a store in Chicago.
Another location-specific campaign in which Facebook worked with a large, unidentified supermarket chain last year tripled the retailer’s return on ad spending, compared with a control group that did not see the ads. The ads targeted adults who lived near a store with a carousel of images containing text overlays of local offers. The ads also included a call-to-action button for directions to the nearest store.
“This new store visits capability is starting to become a very commonly used practice in retail,” Garcia said.
In another example, during the fourth quarter last year, clothing and accessories retailer Michael Kors saw an 11% increase in incremental store sales using ads that were optimized using Facebook’s data algorithms, he said.
Video is another mobile tool that has become increasingly important in reaching consumers, Garcia said. Seventy-eight percent of total mobile traffic will be driven by video by 2021, he said, citing data from the Cisco Visual Networking Index. In addition, research from Wyzowl found that 79% of consumers would rather learn about products from watching videos instead of reading text on a screen.
“Brands are starting to follow this consumer trend in using video as a merchandising tool,” Garcia said. “We’re seeing retailers doing this, we’re seeing CPGs doing this, we’re seeing lots of different companies doing this and truly becoming video-first in their approach.”