LocalOnliner’s 2017 Recap and 2018 Predictions

Quiet progress was made in local commerce in 2017. This year:

1. Amazon brought the focus back to Brick & Mortar. Its purchase of Whole Foods and rollout of experimental Amazon Stores drove a broader “omni-channel” trend, as larger retailers delivered on fully integrated web. mobile and in-store services. WalMart and Target, for instance, are now seeking to leverage their store locations with ecommerce shoppers: 50% of Americans live within four miles of a Target.

2. Cloud based platforms consolidated customer relationships and brought in new capabilities. All in 1 Cloud platforms could challenge the hegemony of Google and Facebook. The number of SMB subscribers remains on the low side – there is no “trend” in this space. But extended platforms have been rolled out by a variety of players, including Go Daddy, Web.com, Comcast, DexYP and Yelp. Typical components may include CRM, content marketing, appointments, payments, listings updates, mobile responsiveness and social media consoles. Cloud based providers especially like the low churn associated with SaaS services compared with media, and better results. ReachLocal estimates that deeply integrated platforms boost sales by as much as 64 percent.

3. Facebook Video finally provided a channel that could deliver on video’s promise for SMBs. Companies like Waymark are producing instantly updateable, searchable SMB videos starting at $49 a month. We’ll see whether these videos can go beyond promotional entities and integrate with key SMB info (hours open, maps, catalogs). Another video-centric offering that bears watching is Snap, the “disappearing” video channel aimed at teens. The company went public in 2017, and made a number of acquistions – some aimed at local marketers. But does it have legs?

Other things show potential. The jury is still out on their ultimate impact. These include:

1. Impulse Buying Boosts On Demand Ordering and Delivery. Impulse buying is seen as a way to drive new revenues and build customer loyalty. It’s a major reason why Amazon has built regional warehouses and focused on quick delivery for prime customers. Beyond Amazon, the larger question is whether the economics will work for fast food and goods delivery. EBay said “no” a couple of years ago. This year, PostMates, Uber Eats, GrubHub and others have pushed the barriers, but with only moderate success. Yelp, meanwhile, bailed out. Ultimately, we see pushback on some speedy delivery, with some effort to get customers to pick up items at centralized locations. One possible solution: part-time delivery networks, like Seattle-based Peach provides at lunch time.

2. SMB and CityWide WiFi Add a New Dimension to Local Commerce. ZenReach, Yelp, Cisco and others are adding WiFi to the services they offer SMBs, enabling new store and office branches to be quickly rolled out; and customers to use connectivity to sign up for services, compare prices, conduct research, and make orders. These services are often accompanied by analytics, which can be used for marketing and media planning. ZenReach and Intersection (which offers city wide WiFi) are also trying to sell advertising. We’re looking for more signs that advertisers will see WiFi as a valuable channel – if so, that will help shift the economics.

3. Local Curation Commerce Drives New Business for Local SMBs. Local SMBs relationships with digital marketers don’t generally extend beyond advertising. But new efforts to “curate” local goods and sell them to a wider audience kicked in this year, with such companies as BeanBox, whichdoes nationwide shipping of coffee beans from 25 Seattle roasteries. To be certain, local curation is a tough to scale – Amazon is backing down from a local curated lunch delivery service. But it adds a new dimension to SMB marketing and fulfilment, and might be a welcome addition to several vertical categories.

4. Net Neutrality Puts ISPs in the Driver’s Seat for Local Platforms — Maybe. The repeal of the FCC’s Net Neutrality rules may see larger players like Netflix, Amazon and Google striking deals with Internet Service Providers like Verizon and Comcast for more seamless delivery of high bandwidth services like video. That’s a competitive plus for them, and a new revenue driver for ISPs. Will the repeal be harmless for companies that provide services to SMBs, and to their local customers? Data manipulation by the ISPs could, theoretically, put a crimp on the development of many SMB cloud based service providers that seek to use the Web for everything from social media to ecommerce. Court challenges to the Net Neutrality repeal are expected. If they don’t succeed, expect to see the ISPs introduce “new,” more expensive transmission fees and servie tiers after the 2018 elections.

For 2018, we expect to see a lot more progress as many concepts and technologies begin to gel with marketing efforts. Several key things will be ready to roll:

1. Artificial Intelligence and Machine Learning Help Local ‘Scale’. Long-term investments are likely to bear fruit. AI and Machine Learning will increasingly help marketers integrate their media planning with Big Data analysis; and help connect local consumers with brands, stores, services and information.

2. Bots and Messaging Are AI ‘First Users’ . Local begins to scale better for many companies with the use of AI-driven Bots and messaging services. Many of these can intelligently deliver scripted answers to customer questions, send them more quickly to online shopping carts, and solicit valuable customer reviews.

3. Enterprise SMB Channels Help Big Companies Get Small. “One size fits all” isn’t working for larger SMBs that have different needs than corporations (and much higher technology costs per employee.) Increasingly, they also need technology services. Companies like Dell, Lenovo, Sprint and Office Depot are investing heavily in customer support channels (CSRs, social media, Webinars, videos etc.) Will they also add meaningful service capabilities that bring them more into the “local” sphere?

4. Location Marketing Goes Beyond Local Search. The rise of mobile usage puts more of a focus on the concept of “location,” which has expanded tremendously, as consumer searches have gone beyond basic searches on Google, Bing and Yelp. They now include image-based social networks such as Instagram and Snapchat, as well as vertical directories, map providers and now, ioT based voice- and text-based platforms such as Siri, Alexa and Cortana. Location marketing leaders like Yext and Vendasta hope to clean up in this area. Can they persuade SMBs that they need to spend upwards of $500 a month? Many still think that Google can do it all.

5. Place Marketing Applies Location Marketing and Experiences . A sister of location marketing is Place Marketing, a big hybrid mobile category that can include 360 views, augmented reality (i.e. Pokemon) and virtual reality recreations of complex locations (i.e. Airports, factory floors and points of interest (parks, museums). It also includes coupons and promotions, and analytics for marketers watching consumer behavior. Interior maps of stores and other entities are the current focus. These maps can help retailers drive more sales and tailor promotions. Don’t expect to see this exciting area ripen for several years, but there should be a lot of Place Marketing experimentation in 2018.

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