As you likely know, several coinciding factors have caused supply chain shortages and inflation for consumer goods. This puts a squeeze on retailers, including SMBs and multi-location brands. GroundTruth today launched a new ad format that helps them counterbalance any negative revenue impact.
Known as In-Stock Local Ads, these dynamic ad units display similar product options to those that are offered on a given eCommerce page or in-store pickup flow. This lets retailers salvage revenue in cases when desired items are out of stock. High-intent consumer demand can be captured rather than lost.
“Brands need to increase their communication at moments of real intent because if consumers can’t find what they’re are looking for, they’re [likely] to switch brands, GroundTruth’s Dan Silver told Localogy. “Stock Local Ads allow retailers and brands to meet consumers at these crucial points of decision.”
Going deeper on In-Stock Local Ads, product alternatives that are offered include similar items or nearby availability of the same item. The latter happens when multi-location brands have outlying stores. Given holiday shopping intent, many consumers will go the extra mile (literally) for that hot item.
There’s also ample willingness to substitute similar products, especially in the current environment as shoppers calibrate their own expectations. Backing this up, Groundtruth reports that 35 percent of shoppers are willing to substitute a similar brand or product when something’s out of stock.
This supports the notion that retailers can indeed mitigate revenue declines in the current environment. Pulling on that string,, if retailers can salvage 35 percent of losses that result from out-of-stock items, that’s a meaningful result. The effective rate is likely lower but it still could be impactful.
Beyond near-term revenue, In-Stock Local Ads could help retailers and brands avoid losing a more valuable asset: customer lifetime value. In other words, if a given consumer bounces to a different brand or retailer given out-of-stock items, they may develop new allegiances and never come back.
Anticipate the Bounce
For GroundTruth, In-Stock Local Ads are well-timed. Not only have several macro factors created product scarcity and supply constraints, but we’re entering the holiday blitz. In other words, supply is constrained and demand is about to go into hyperdrive. It’s a perfect storm of shopping anomalies.
For that, we give GroundTruth bonus points for meeting the moment. This also falls under the Covid-era phenomenon we call ‘pivoting with agility.’ Product development requires more agility than it used to. Consequently, those that rise to the occasion are developing new muscles they didn’t have before.
In GroundTruth’s case, this was all about tracking all of the above factors and anticipating the bounce. To use another sporting metaphor (sorry), it’s all about skating to where the puck is going. Given product development cycles – though accelerated – tech companies have to develop for near-future factors.
“Meeting the moment is really the key point,” said Silver. “Over the last year, we’ve already seen several consumer behaviors that have occurred rapidly and are likely here to stay, including the accelerated adoption of curbside and in-store pickup. This has led to a growing demand for a higher level of convenience; and sustaining those expectations is proving hard due to supply chain issues.”
In-Stock Local Ads will be available starting today and more can be seen here.