Street Fight-How Back-Office Innovation is Transforming Local Marketing

HOW BACK-OFFICE INNOVATION IS TRANSFORMING LOCAL MARKETING

STREET FIGHT INSIGHTS

@ 2013 Hyperlocal Industries Inc.

The majority of commerce happens locally.

$4.2 Trillion in

In-Store/Offline Retail Spend

$.19 Trillion in

Ecommerce Retail Spend

$4.4 Trillion in U.S. Retail Spend

95% ‘Local’ 5% Online


A flood of food trucks gave mobile payments a testbed for the sophisticated digital options that are making the cash register an ancient relic.

That ‘local’ commerce (the 95%) is being reinvented by the Internet.

FIND

BUY

RETRIEVE

ENGAGE

Far beyond the yellow pages, a web of data providers combine basic information with rich content to help consumers make purchase decisions about where to shop.

Ecommerce revolutionized the mundane logistics of getting goods to consumers; but new technological tools let local businesses get in on the game, too.

RETRIEVE

ENGAGE Forget mailing lists; emerging CRM systems build on this data-rich local stack to bring consumers back in new ways, and personalize their in-store experience like never before.


Technology vendors develop tools for each side of the local market, serving consumers

(demand) and businesses (supply)

Search

Media Social Media

Loyalty Services

Dem

and-

Sid

e

Inventory

Scheduling/ Reservations S

upply-Side

Credit Cards/ Payment Apps

Email

Payment processing (in-store, online)

Fulfillment

Commerce In-store

Mobile

Businesses that sell goods

and services locally

At-home

Con

sum

ers

who

buy

goo

ds

and

serv

ices

loca

lly

Services/Platforms

Services/Platforms

CRM


Over the past decade, the bulk of the

innovation has occurred on the demand side.

Companies built large businesses aggregating consumer demand, and selling that demand to

advertisers

2013 2012 2011 2010 2009 2006 2005 2004 2008 2003

Google Local Released

Yelp Launches Groupon IPOs

Foursquare Founded

Yellow Pages Revenues Peak

$15.3 B Yellow Pages Revenues Sink

$7.5 B

Patch Expands

2007


Innovation is shifting to the supply side, where vendors use cloud technology to

bring key operations systems online.

Payments Scheduling/Booking

Point-of-sale CRM/Analytics


So how does this relate to marketing?

The job of the digital marketer is to bring together demand and supply, facilitating

commerce.

STREET FIGHT INSIGHTS @ 2013 Hyperlocal Industries Inc. @ 2013 Hyperlocal Industries Inc.

With mobile adoption nearing ubiquity, the demand-

side of the marketplace is already in place. A supply side platform solves two looming problems for the local marketing industry:

Connectivity at Point-of-purchase No way to measure

actions (walk-in, payment) in-store

1 2


Software Silozation Lots of different systems, incapable of ‘talking’ to another (e.g. sharing

data)

Soon, with both sides of the marketplace online, vendors will have the ability to automate the

way consumers (demand) and businesses (supply) interact.

Consumer Business

Social Search Email

Inventory

Transactions

Reservations

Supply-Side

Dem

and-

Side


Consumer

Business

Inventory

Transactions

Reservations

Social

Search

Email

Data is generated when consumers engage with merchants

(e.g. food delivery, mobile payments, loyalty programs etc.)



Inventory

Ordering

Data is generated when consumers engage with businesses

Business

When demand- and supply-side systems are

linked, vendors can push users into a reservations or booking system, helping

marketers measure success and “close the loop.”

Demand-Side

Social

Supply-Side

Reservations

POS


Search

Email





Ordering

Vendors can also use data, generated by the supply-side system (e.g. inventory, purchase history), to target consumers and generate

creative automatically.

Supply-Side

Social

Demand-Side

Reservations

POS


Data, generated during operations, informs how merchants engage with consumers





By automating the content creation and attribution processes, vendors will be able to

simplify the workflow for local businesses.

This will reduce adoption costs, expanding the addressable market and accelerating the

shift of spend from analog to digital.


The emerging supply-side systems will serve as a platform for marketing software, making businesses’ data and back-end systems easily

accessible to vendors.

This will dramatically reduce the sales and support costs associated with growing a local

marketing service, enabling smaller firms to scale efficiently and with less capital.




Street Fight believes the companies that will succeed in local marketing will integrate supply-

and demand-side systems through internal product development or strategic partnerships


Companies across the local marketing landscape range from those with weak digital

marketing capabilities and no operations offerings, to the market-leading combination of

strong automated marketing and operations offerings for businesses, whether through

product expansion or partnership.




Company

Partnership

Innovators Intuit

FoursquareYelp

Facebook Patch . GanneB STREET FIGHT INSIGHTS @ 2013 Hyperlocal Industries Inc. @ 2013 Hyperlocal Industries Inc.

This chart represents a handful of key companies innovating digital demand- and supply-side business models in local marketing and their legacy predecessors. There are of course thousands

more companies in the entire local marketing ecosystem.

The Local Marketing Landscape 2013

This deck is based on the full report

“How Back-‐Office Innova=on Is Transforming Local Marke=ng.”

Author: Steven Jacobs, Deputy Editor, Street Fight

[email protected]

For informaGon and consultaGons, please contact [email protected]
