Category Archives: Conferences

Are Loyalty Programs Getting Lost in the Shuffle?

Image from Technology Advice

A wide range of innovative loyalty programs are in the marketplace, and they report impressive ROI and user engagement. But are they a high priority for retailers? Many retailers (and their agencies) have been slow to commit to loyalty programs.

At ShopTalk in Las Vegas May 16-18, loyalty programs seemed to have gotten lost in the shuffle of digital solutions (i.e. omni-channel, email, artificial intelligence, email). As eMarketer Yory Wurmser noted, “loyalty programs are of mixed importance…loyalty rates are going down.” He added that programs delivering direct gains in “transactions” or “emotional” allegiance to brands and retailers will have a leg up over pure-play loyalty solutions.

Quidsi CEI Emile Arel Scott also noted the limited appeal of pure-play loyalty programs. “We have gone through so many loyalty programs,” said Arel Scott, whose company is owned by Amazon. “They are a lot of work. Better service and customer feedback are much more important than points,” he said.

“The real struggle is for brands to find a message outside of ‘25% off’ or a sale,” Arel Scott added. “The key is to continue to get more specific in messaging,” he said, noting that chats seem to hold a lot of promise in this direction.

For Index CEO Marc Freed Finnegan, it all comes down to getting customers to build an account with a retailer, where all the data can be kept. An account “remembers everything I buy. Loyalty is a leading way to get there,” he said. But so are mobile accounts and other channels that stimulate incremental revenues.

Does this mean that loyalty programs aren’t poised for success? Not really. Many of them, especially card linked offer programs, have already evolved into broader programs that provide the useful analytics, feedback and targeting capabilities that the ShopTalk panelists alluded to. But it is an ongoing battle to gain a retailer’s attention, given all the industry solutions out there.

ShopTalk: ‘Digitally Native Vertical Brands’ Anchor


Bonobos CEO Andy Dunn (On Right)

The next generation of retail brands will win if they pursue a “digitally native vertical brand” (DNVB) path. So says Bonobos CEO Andy Dunn.

“Vertical brands were a huge part of the last era of retail (Zara, Ikea, Gap), aka the offline one, and now they become the driving story in the future of digital retail,” said Dunn in a Medium post.

Speaking May 18 at ShopTalk in Las Vegas, Dunn says there are 65 digitally vertical brands. Besides Bonobos, a high-end men’s fashion brand, others include Warby Parker, Dollar Shave Club, BirchBox and Jack Threads. We’re just in the “first inning,” he says.

Dunn’s definition of a DNVB is a brand that is customer-centric and highly personalized, while most ecommerce-only companies provide anonymized service with superficial, broad personalization. Nordstrom, which owns 5 percent of Bonobos, is an obvious cohort. But so is Tesla in automotive.

The digitally native approach differs from pure-play ecommerce, “where we have seen a lot of failures,” says Dunn. It is also far removed from legacy retailers and offline brands. Aside from leaders such as Nike and UnderArmour, most are unprepared to disrupt themselves and they also tend to lack their founder’s conviction.

Like Warby Parker, BirchBox (and Amazon), Bonobos is now taking its approach from online to offline. Stores are “amazingly profitable. Productivity is so great on that box,” he says, noting that the average Bonobos location is 800 square feet.

They also allow Bonobos to “sell with the highest possible customer service,” while “pulling back on marketing and technology.” Bonobos currently has 21 stores, and will open 11 more this year. But these aren’t “software companies,” says Dunn. “This is retail. It takes a long time to build. And ultimately, profits and cash-flow matter.”

Westfield’s CEO at ShopTalk: Goodbye Gap And Abercombie, Hello Ford, Events and Gyms

Mall giant Westfield, which receives 400 million visits a year, has refocused on its mission as a people driver for retailers. The 56-year-old company is ditching a horde of its “me too” suburban malls and reinvesting the proceeds in major fashion, tech and financial centers where technology aids and new partnerships with entertainment and lifestyle companies will drive its next generation.

Speaking May 16 at ShopTalk in Las Vegas, Co-CEO Steven Lowy said everything the company is doing is designed to “create move commerce. We are in the business of connecting consumers with retailers. It’s that simple,” he says “Amazon can’t do the things we can do.”

“We are building a digital platform on top of our physical platform,” adds Lowy. “We’ve gone from being a real estate company to a PropTech (Property Technology) company.”

Westfield Labs, a 50 person group, is a major player in the company’s revamp. It has developed a comprehensive grouping of mobile-oriented shopper aids and enhancements. These are being tested this year and then will be rapidly rolled out. Key features include a “searchable” mall that highlights services and specials; loyalty and payment provider programs; and delivery services.

Lowy notes that the company’s premier centers such as The World Trade Center and Century City are the new Westfield prototypes, tying together lifestyle elements for consumers. Movie theaters, event spaces for major brands such as Ford and American Express, beautiful restaurants, coffee shops and top-of-the-line health clubs like Equinox will keep high-end consumers coming to its stores, he says.

Westfield will also get rid of some brands that haven’t kept up with a true, omnichannel approach. “You may not see The Gap and Abercombie (& Fitch),” says Lowy. “The business has shifted.”

Westfields Co-CEO Steven Lowy

Westfields Co-CEO Steven Lowry at ShopTalk16 in Las Vegas

MarTech’s Growing Impact on Local, SMB and Niche Marketing


Chief MarTec Scott Brinker

MarTech — the integration of software and marketing — is a wild card in the new generation of marketing. The new era of Martech takes into account not only ads and promotion, but content and experience, social and relationships, commerce and sales, data and management. The question for us is how it all ultimately applies to local, SMB and niche marketing.

It is certainly true that we’re increasingly focused on MarTech-centric issues: such as driving more customer loyalty and upsells via engagement, utility, targeted promotions and analytics. In our space, its been the differentiator and evolved focus for such social and promotions oriented companies as Radius Intelligence, Surefire Social and Signpost.

The keys are the “marketing pace layers,” as described by sector pioneer Scott Brinker, in his new book, “Hacking Marketing.” Brinker notes that in the modern era, campaigns take weeks, tactics take days but feedback and iterations (i.e. social media and messaging) are in real time and have become increasingly important. While advertising will often retain a central place, other critical channels are now invited into the “core“ marketing experience. Brinker thinks it is a 70/30 ratio.

In a keynote live streamed at his MarTech conference today in San Francisco, Brinker previewed many of the attributes of the MarTech revolution. Brinker notes that there were 350 companies in the space in 2013, 1,000 in 2014, 2,000 in 2015 and more than 3,500 in 2016 – 87% growth in the last year alone.

One of the key attributes of the space is that its scope and marketing relies on so many pieces that the Microsofts and SAPs of old –which assembled monolithic building blocks of tech — no longer really apply. All the companies in the space are constantly iterating and borrowing or partnering from each other. “The real story is: how do you leverage the opportunities,” says Brinker.

LSA16: Thumbtack Focuses on Creating an ‘SMB OS’

Thumbtack President and Co-founder Jonathan Swanson

Thumbtack is an SMB sleeper. It has raised $275 million, using it to develop a profile-based, one click referral system. Last quarter, 200,000 service SMBs bought some level of lead bundles, which can be purchased in packages ranging from $10 to $600 per week.

Under Thumbtack’s model, service pros only buy the number of leads they want to deal with. Consumers receive a choice of 3-5 referrals per query (yes, sort of like Home Advisor.) The beauty of it: no sales force — the single greatest expense in the industry. Thumbtack simply finds its service pros via sophisticated searches and builds a searchable profile. In some cases, it is enfranchising entire new groups that don’t have storefronts and aren’t typically approached for marketing (i.e. photographers, dog walkers)

We’ll see whether Thumbtack hits a wall with the model, given that many SMBs have needed a push from a sales consultant to keep their foot on the gas. Meanwhile, the Thumbtack team isn’t waiting to see what happens. It plans to deepen its engagement with SMBs by developing a comprehensive SMB “operating system” that will connect all the dots for busy service pros that need help with scheduling, presence, marketing and back office chores.

Speaking at LSA 16 this week in San Francisco, President and co -founder Jonathan Swanson says the company is basically extending its longtime mission of moving away from the omnipresent directory model and be more Amazon-like. He calls it a “features” approach. “The more we looked at our competitors, the more they looked the same,” he says. Competitors include such companies as Angie’s List, HomeAdvisor, Porch, Amazon, Google, Dex, Hibu and others.

Swanson says that the company’s main mission is to extend its relationship with its service pros, and make that relationship more rewarding. Churn isn’t an issue since there is no contract – just new business. “Once a professional is hired (using) Thumbtack, they stay with us forever. If they are being hired, they come back again and again,” he says.

The SMB operating system concept isn’t necessarily a new one. Groupon was talking about it a couple of years ago, seeking to enlist partners from a wide variety of niches to “close the loop” on its payments and loyalty system.

Thumbtack’s vision is to leverage its core competencies, mostly using internally developed resources. “We’re good at Adwords, payments, scheduling,” says Swanson.

With the OS in place, service pros can “open the App, tell us their skills and we can tell them what they can earn in different parts of the country. We’d help you start a small business, get a license and get customers. You focus on what you love doing, and we’ll focus on everything else.” The company, meanwhile, can also educate consumers on their bids and what they can expect to pay. Many consumers, for instance, wouldn’t realize that a quality photographer wouldn’t bid on a $500 photo shoot.

Upcoming Local Events, and My Discount Codes (LSA, BIA/K, Shoptalk)

23030870713_75faed20a0_z Having Fun with Nicco Mele on Stage

Lots of great events coming up for the local digital community this spring.

Feb. 29-March 1 is Borrell’s big LOAC show in New York.

March 7-9 is the Local Search Association’s Show in San Francisco. I’m looking forward to seeing everyone there. You can register online and use “PETERK” for $200 off.

March 22 is BIA/Kelsey’s Brands conference in New York, focusing on national brands and retailers targeting locally. Edition 4! The $100 discount code is “BRANDSPK”

May 15-18 is ShopTalk in Las Vegas, which will gather 2000 people interested in the next trends of big and small retail. It is produced by the founders of Money2020, and I have signed on to be a media partner. The $250 off discount code is “local250.”

May 16-18 is BIA/Kelsey’s Engage show in San Francisco, which is the successor to the SMB show and will focus on local SMB success stories. The $200 discount code is “ENGAGEPK”

June 7 is Street Fight Summit West in San Francisco, which is always a great event. Good discounts are currently in effect and “PeterK” gives you another $75 off. I’ll definitely be there.

Cardlinx San Francisco: The Drive to ‘Incremental Spend’ by Consumers

The evolution of the card linked space is happening in unexpected ways, as we saw this week at Cardlinx’s San Francisco conference. It was the association’s largest event in its two year history. Basically — the table has been set; a number of early arriving guests have arrived; and we are now waiting for real momentum and numbers to come in.

The first to come on board have been the larger companies, which thrive on the analytics – they want to know who their customers are, and how to market to them. The smaller merchants are more impacted by the direct impact of offers that drive store traffic and are still using their traditional options (ads, dm, coupons, etc.)

The event’s large attendance –130+ — reflected the rollout of several key card-linked based projects, such as Plenti from Amex, Macy’s, AT&T, Enterprise Rent a Car, Exxon Mobile and others; and a major card linked rollout from Whole Foods. Living Social has added a card linked element in dining rewards; and Groupon is tentatively preparing one as well, with 15 percent off as a constant feature.

Card linking is also seen as being deeply integrated with payment and messengering programs that are more directly driving commerce. Facebook, for instance — a Cardlinx member –appears to be studying a role for card linking on its growing Messenger platform, which is already set to provide shipping updates, book rides and send money.

Widely used, well-subscribed platforms are expected to add scale to card linked concepts as well. Speaking at the event, Empyr CEO Jon Carder said he could see 20 million active consumers building a $10 billion annual business –with $750 million in revenues going to the participating card linked offer companies. “It is a network effect,” he said. “The more participants, the more consumers you have, the more revenue you get. “

Whole Foods has whole-heartedly embraced its card linked program – which is a bit of a surprise for a company that has historically been “discount reluctant.” Payments Marketing Director Marushka Bland said card linking will give it an edge as the company faces serious competition in the organic grocery space from Kroger, Costco, Walmart and others. The company is now “much more open to worrying about its customers and eager to focus on things like loyalty.”

Whole Foods started rolling out its affinity program on a small scale in 2014. It is currently rolling out digital coupons. “It is about our customers and how they shop with us,” said Bland. “Execution, targeting and attribution” are the keys to the program, with a target goal of 10 percent incremental spend.

Incremental spend is also the chief goal for Excentus President and CEO Brandon Logsdon, who stressed that the key is not to focus on Card Linked Offers, but on getting participation in card linked programs. (He’s right: I’m going to phase out my own references to CLOs.)

Excentus rolled out its Fuel Rewards program in 2012. More than 6.5 million cards have been registered, and there is an active group of 1.4 million linked cards. Customers have spent $450 million on a growing list of affiliating merchants, and gotten $3.6 million back on fuel costs (roughly 5 cents a gallon). Logsdon adds that the merchants are seeing brand new spending from the programs. Fifty percent of those coming in are new customers; and 65 percent of promoted sales are incremental.

Empyr CEO Jon Carder

Empyr CEO Jon Carder