Magazine article Editor & Publisher

How Digital Retailing Could Roil Local Media: It's Another Troublesome Sign for the Economies of Legacy Media

Magazine article Editor & Publisher

How Digital Retailing Could Roil Local Media: It's Another Troublesome Sign for the Economies of Legacy Media

Article excerpt

[ILLUSTRATION OMITTED]

Thanks to the growing ubiquity of mobile devices, a digital revolution is about to transform bricks-and-mortar retailing--a fast-breaking phenomenon that potentially poses the biggest challenge yet to the economics of local media companies.

More than four out of five smartphone and tablet owners use their devices for shopping, according to a report (tinyurl.com/niemoshop) issued earlier this year by the Nielsen marketing metrics service. Nielsen says 65 percent of consumers research products before they head to a store, 66 percent of shoppers check prices in stores and 49 percent of them redeem coupons from their mobile phones.

Given all this click-to-buy-ing, it is perhaps no surprise that mobile-enabled commerce is projected by the eMarketer research service to nearly triple from today's level to $113.6 billion by 2017- Now, here's why publishers and other local media companies should worry:

With more shoppers making buying decisions and actual purchases on their mobile devices, local retailers and national brands are bound to vector ever more of their marketing dollars into intercepting consumers on mobile platforms, thus diverting ever greater portions of their budgets away from the traditional print and broadcast media.

Retail advertising, without doubt, is the lifeblood of local media. In 2013, retail advertising accounted for 75 percent of the $14.5 billion in advertising sold by local television stations, 43 percent of the $23.5 billion in ads sold by newspapers and 38 percent of the $4.2 billion in ads sold by local radio. The broadcast information was provided by Kantar Media and newspaper statistics came from the Newspaper Association of America.

The rush to digital retailing dominated a June conference in San Francisco sponsored by Street Fight, a smart online news service covering the myriad ways that prodigiously funded start-up companies are developing high-tech solutions to such pressing problems as C2C (Coffee to Commuter), S2S (Shoes to Shopper) and PP2CP (Pepperoni Pizza to Couch Potato).

Although these commercial goals may seem modest, the technologies, algorithms, analytics and business models developed to solve these problems likely will pave the way to changing how brands target prospects and merchants, smooth the myriad frictions associated with driving to the mall, navigating a store, selecting a product, fishing out a credit card and schlepping the purchase home.

"We don't believe shopping centers are dead," says Nicholas Cabrera, who researches the future of retailing for Westfield Group, one of the largest mall operators in the world. …

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