Costco shoppers spend 149% more per visit than at the average retailer, and dollar store shoppers are around 30% more likely to make a purchase than when visiting other retailers. The data is based on a new attribution- measurement offering from mobile-location firm Placed.
Its media agency partners and their restaurant and retail brand clients will use the metrics to standardize the way they gauge their online and brick-and-mortar sales, and to better show the impact of mobile ads on offline consumer behavior.
“Clients have asked us “Can you figure out, did [consumers] buy something and how much did they spend?'” said David Shim, Placed CEO, noting that agency clients want physical store metrics that match digital ones, such as cost per store visit and average order size.
Placed recently began tracking the purchase rate and average spend of consumers its system spots at retail outlets, restaurants and other businesses. The company specializes in location data gathered through opt-in relationships with a panel of around 500,000 app users it traces through GPS and wi-fi data, pinpointing their locations multiple times throughout a given period of time to ensure they are actually present at a specific place of business.
“Placed’s new offering will allow us to further validate performance,” said Sarah Bachman, VP of mobile strategy at Horizon Media, an early tester of the new measurement product. “It helps us answer a question we always ask when evaluating performance of our location efforts: ‘We drove consumers to the store, but did they make a purchase?'”
The revenue metrics are an extension of Placed’s attribution measure, which gauges the impact of mobile-ad exposures on store visits. While the revenue metrics can be connected to that attribution metric, the idea behind measuring revenue, said Mr. Shim, is that “it shows you where you stand in terms of the ecosystem.”
How Do they Know How much People Spent?
Placed supplements the information with data from surveys sent via mobile notifications to members about whether they made a purchase at store where they were spotted, and how much they spent. Consumers cough up their data and answer surveys in exchange for contest entries and premium app services, and Placed rewards survey respondents with the same level of prizes no matter how they respond.
The company asks a percentage of its panelists about their purchase activity when it spots them in business locations, whether or not the business is a client of Placed or its agency partners; this gives the company a broader view of what’s happening across the retail landscape. In the past two months, the location tracker gathered survey responses to measure purchase rates and average spending.
For instance, Placed determined that people are more apt to buy when price points are low, or when visiting shopping meccas selling an array of food and home products. The company reported that people who visited dollar stores including 99 Cents Only, Dollar Tree and Dollar General are at least 30% more likely to buy something than at the average retailer. One-stop stores with a wide variety of goods such as Meijer (29%), BJ’s Wholesale Club (28%) and Costco (27%) also topped the rankings.
Those big box stores also made the top 20 according to average spend. People spent 149% more at Costco than at other retailers. Best Buy (140%), BJs (137%) and Sam’s Club (136%) also ranked high.
Placed ingests more than 80 latitude and longitude locations outside and inside retail shops, eateries and other stores over several minutes to ensure it has pinpointed a user at a particular place of business, rather than merely capturing their location as they drive or walk by.
Earlier this year Placed signed deals with media agencies agreeing to use its attribution system for measuring the effect of mobile ads on store visits, including Essence, Digitas, Horizon, Southwest Media Group, Crossmedia, and IPG Mediabrands.
Why It’s Hot
This type of study is an invaluable resource for retailers, restaurants, and anyone with a brick and mortar store. It’s not a perfect system, because it requires people to input purchase information, but it’s a step in the right direction.