Retail SMBs are more poised than their counterparts in other verticals to adopt sophisticated digital advertising and marketing. This is clearly shown by BIA/Kelsey’s Local Commerce Monitor ™ (Wave 18) survey of small businesses.

Retail SMBs are already highly oriented to digital media, with plans to spend 43 percent of their total ad budget on digital media in the next 12 months*. They rank social media marketing, SEM/SEO and email marketing as their top priorities for advertising and promotion in the next 12 months*.

There are multiple signals in the LCM data that we think point to big expansion into digital by Retail SMBs:

— They’re experienced in maintaining customer lists, with 71 percent having maintained a customer list for over a year. With 61 percent of their customer lists  in digital form, they’re well positioned to move into marketing automation services like CRM (where they’re still at a low utilization level of 21 percent).

— They’re big users of ecommerce, with 90 percent reporting ecommerce sales.

— They’re highly satisfied with the mobile advertising they’ve done so far, reporting high ROIs — although usage of mobile advertising and marketing is still modest.

— They’re big on customer loyalty programs, which are used by 43 percent of SMB retailers. Since only 30 percent of these programs have been digitized, we believe this too represents another growth opportunity.

— They’ve registered an interest in many advertising and marketing services, particularly ecommerce services, online satisfaction surveys, email marketing, and online leads management.

In sum, we believe local retailers will be upping their digital game on multiple fronts in the near term. Since they’re such a staple of their communities, this shift will reinforce the broad and rapid digitization of daily life.

*The 12 month period following the Local Commerce Monitor Wave 18 survey, conduced in Q3, 2014.

These were a few of the top-level findings of the latest cut of LCM 18, focusing on SMBs in the Retail vertical. Clients of BIA/Kelsey can access this report through our client portal. The report is also available for purchase, and more information on the LCM survey is here.

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Groupon is apparently thinking hard about dismantling its ambitious SMB platform, and refocusing on its core strengths in prepaid deals, goods and travel. Reports have come out saying that Groupon is offering to sell its Breadcrumb POS platform, which had been rebranded as Gnome; and also sell its interest in Serviz, a Local On Demand Economy home services company that has been developed as ClubLocal by former ReachLocal CEO Zorik Gordon. Groupon has also been in talks to cash in on T-Mon, the South Korean e-commerce service that it bought last year from Living Social for $260 Million, but could now been seen as a cash cow that could allow Groupon to invest in other areas.

According to Bloomberg Business Week, Piper Jaffray analyst Gene Munster thinks that the Breadcrumb part of Gnome could fetch $100 million, and that Groupon’s stake in Serviz could be worth $30 million. T-Mon, which is seen as an e-commerce winner in Asia, could ultimately get as much as $800 million. Groupon’s apparent decision to explore the sale of Gnome is the most interesting to us. A report in Re-Code said that executives casually offered to sell at least a portion of it to Square.

In developing Gnome, which has been built on top of its June 2012 purchase of Breadcrumb, Groupon assessed its widespread, international merchant base and concluded it could reinforce and upsell that base and position itself as a global e-commerce giant. It would do so via a compelling package of highly discounted point of sales devices, payment services merchant analytics and strategically targeted offers to customers.

The investment in Serviz — which gave the greenlight to Gordon’s team to continue developing a service that was not going to go further at ReachLocal — was also seen as strategic as Groupon looked for more and more ways to connect and broaden the local marketplaces. Coincidentallly, it looks like Groupon is giving up on having a piece of the home services market just as Amazon and Google are diving in.

Is Groupon giving up too early? We’ve been impressed with the capabilities of the Gnome platform and the strategic vision behind it. The Serviz product is also impressive, although perhaps too rarified for Groupon, as it aims for higher ticket repairs and services. And separately, T-Mon is going to require enormous investments to grow and maintain its market share in a business that has come to not only include deals but also ecommerce, fashion and services.

The bottom line here, however, is that Groupon may have concluded that its merchant base sees it as a 3rd, 4th or 5th choice for this kind of activity — rather than as a substitute for blue chip and diverse players such as American Express, VeriFone, First Data and Salesforce. While Groupon can always work to keep repositioning itself, it currently seems most secure as a provider of discounted goods and deals that it continues to mold into an always on marketplace.

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Starting today, Ifbyphone is DialogTech. In conversations with the company last week, it characterized this as a move to more adequately represent the market its pursuing. In the evolutions of mobile devices and overall telephony, voice-based leads aren’t just coming in by “phone.”

Beyond semantics, there are deeper connotations that the company will reveal in the coming weeks. It’s kicking that off today with a new product launch that couples with the brand unveiling. Known as LeadFlow, it’s a toolset for third parties to build call-based leads marketplaces.

In other words it lets anyone create their own pay-per-call market. The idea is that lead brokers can arbitrage calls between incoming sources — such as generic but vertical-specific ads — and advertisers that bid on those leads. Think of it like an ad network in a box, but for voice.

“In the advertising world, affiliates solicit ad networks to run ads on their behalf, then distribute them to businesses bidding on that lead flow,” DialogTech CEO Irv Shapiro told me. “But if you want to do that with voice, you need quite a bit of phone infrastructure. That’s what LeadFlow is.”

In that way, the concept of brokering leads is nothing new. Nor is the overall call monetization opportunity. But bringing the two together is new — at least in this form. The tools to basically build your own call-based leads marketplace is meant to lower barriers to get in the call monetization game.

“This has been done with voice, but only on a proprietary basis by people who build it for themselves,” said Shapiro when I asked what makes this different. “So we’re creating a platform to democratize that make it available to any entrepreneur that believes they can put together a market.”

Meanwhile, the volume of phone calls continues to grow in the smartphone age. And the market value of call leads is growing as well, especially in high-value verticals with high-consideration purchases and complexity. That need for that human interaction isn’t going away, even in a digital age.

“Because something like life insurance is a complex purchase, [consumers] don’t want to fill out a form, they want to call a number,” said Shapiro, “An even better example is home health care. If you are going to find somebody to help watch Mom, you’re talking to them; you’re not doing that over the web.”

And that gets back to the new branding and its double entendre. While call analytics accomplish a log of dialing activity (among other things) the root word is meant to invoke dialogue — the basis of human communication that underlies the call monetization opportunity.

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BIA/Kelsey is out with my new paper on the status of card-linked offers, which is based on detailed discussions with 14 leaders of the card linking ecosystem, including credit card firms, tech vendors, payment processors, publishers and merchants. Most of the respondents are members of The CardLinx Association. Card-linked offers are promotions based on transactions made on credit cards, debit cards, or loyalty programs. They represent an unprecedented level of media attribution.

This week, I presented report highlights to The CardLinx Association’s Mobile Summit in San Mateo. Among the findings: universal agreement that card linking is seeing momentum among merchants; that some budgets for card-linked offers have begun to move from experimental to seven-figure spending; and that many key categories are participating, including Quick Service and Fast Casual restaurants, specialty retail and subscription services.

Challenges remain, however. Once seen in simple terms as a successor to the prepaid model pioneered by Groupon and Living Social, there have been some slow-downs in the business. As Coupons.com SVP Bruce Sattley noted at The CardLinx Summit, “There is not as much fervor among retailers as I would have thought a year ago.”

Clearly, the ultimate success of card-linked offers will be linked to better coordination among the various segments of the CLO ecosystem; the development of a constant stream of attractive offers; greater awareness of CLOs; the elimination of structural sales blockages; and the development of industry standards for card-linked transactions.

More information about the report, including purchase information, may be accessed here.

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Facebook isn’t often thought of in terms of “commerce,” a la retailers such as Amazon or financial institutions such as American Express, but it makes a strong case for itself as a company that “unlocks” commerce. Speaking at The CardLinx Association’s Mobile conference in San Mateo on Feb. 24, Facebook Head of Payments and Commerce PJ Linarducci joked that his “day job” is “collecting (payments) from two million advertisers a month to help them connect with their audience.” These involve payments in 55 currencies, with 800+ payment methods. One million transactions take place daily.

Is there is a clear link to commerce from Facebook’s base in advertising? Linarducci thinks it is fairly obvious. “Commerce is about information,” he said.

With placement on 95 of the world’s cellphones, and detailed profile and usage information on its users, commerce also extends the company’s broader social mission. “Payments are just a point in social; helping people get what they want,” Linarducci said. He suggested that many marketers might post offers instead of ads, if given the opportunity.

While Facebook does not appear to have moved forward with several tests involving virtual gift cards, prepaid deals and virtual credits, the company is actively exploring all its commerce options. For instance, it is currently highlighting buy buttons attached to ads, and classifieds for groups.

“The big picture is to look at Facebook in terms of its access to audiences, its payments infrastructure and as providing world class tools,” said Linarducci. And commerce is happening on the site whether Facebook is directly involved or not. “People hack around the system to make commerce on Facebook — despite us not doing anything to help them,” he said.

Facebook’s PJ Linarducci

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Facebook isn’t often thought of in terms of “commerce,” a la retailers such as Amazon or financial institutions such as American Express, but it makes a strong case for itself as a company that “unlocks” commerce. Speaking at The CardLinx Association’s Mobile conference in San Mateo on Feb. 24, Facebook Head of Payments and Commerce PJ Linarducci joked that his “day job” is “collecting (payments) from two million advertisers a month to help them connect with their audience.” These involve payments in 55 currencies, with 800+ payment methods. One million transactions take place daily.

Is there is a clear link to commerce from Facebook’s base in advertising? Linarducci thinks it is fairly obvious. “Commerce is about information,” he said.

With placement on 95 of the world’s cellphones, and detailed profile and usage information on its users, commerce also extends the company’s broader social mission. “Payments are just a point in social; helping people get what they want,” Linarducci said. He suggested that many marketers might post offers instead of ads, if given the opportunity.

While Facebook does not appear to have moved forward with several tests involving virtual gift cards, prepaid deals and virtual credits, the company is actively exploring all its commerce options. For instance, it is currently highlighting buy buttons attached to ads, and classifieds for groups.

“The big picture is to look at Facebook in terms of its access to audiences, its payments infrastructure and as providing world class tools,” said Linarducci. And commerce is happening on the site whether Facebook is directly involved or not. “People hack around the system to make commerce on Facebook — despite us not doing anything to help them,” he said.

Facebook’s PJ Linarducci

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Amazon has been one of the biggest business phenomena of our time. At ILM 2014, Brad Stone, author of The Everything Store: Jeff Bezos and the Age of Amazon, unpacked the company’s unlikely navigation of the dot com boom, all the way up to its current work with mobile, fulfillment and yes, drones.

As a former New York Times tech reporter and current Bloomberg Businessweek Senior Writer, Stone has been covering Amazon and the progression of tech & e-commerce for the past 15 years.

“I figured if anyone can tell the story of this iconic company; and the way we shop, read and interact in the cloud, I could be the person to do it,” he told BIA/Kelsey Chief Analyst and VP Peter Krasilovsky on stage.

Through examining the tech giant, Stone began to view it in light of a construct that (Amazon investor) John Doerr has famously devised. This is to separate companies between missionaries and mercenaries.

The former are characterized by founders and cultures driven to change the world or solve big problems. The latter are driven primarily by financial gain. But missionaries often end up achieving greater economic payoff through a more passionate product focus, and are the companies Doerr invests in.

According to Stone, Amazon is both missionary and mercenary. It’s missionary tendencies can be found in the way that it has changed the way we shop, read and consume media. The mercenary side is apparent in its cutthroat business tactics in competition, and famously adversarial work environment.

“Bezos feels that social cohesion, can cloud the drive to the truth,” said Stone. “At [Amazon] meetings, people aren’t shy about what they feel. That plus the frugality of the company makes turnover high. I had plenty of people to talk to for the book, and some were still suffering from PTSD.”

But Bezos has importantly gained the trust of his board and investors that his long term view will lead to giant payoff. This comes amidst razor thin margins and reinvestment of profits in capital-intensive growth strategies. For example: continued buildout of fulfillment centers closer to major cities.

That trust has been earned through Bezos’ track record. With the exception of a few misfires (Fire Phone, anyone), he’s continually gone against the advice of colleagues and his board, and continually proved to be able to see around corners. The Kindle and AWS are a few examples.

“He is a CEO with enormous credibility and a board with patience,” said Stone. “Elsewhere we see Carl Ichan standing over the shoulders of [eBay CEO] John Donahoe and even Tim Cook. Not Amazon… he doesn’t go near Amazon.”

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Amazon has been one of the biggest business phenomena of our time. At ILM 2014, Brad Stone, author of The Everything Store: Jeff Bezos and the Age of Amazon, unpacked the company’s unlikely navigation of the dot com boom, all the way up to its current work with mobile, fulfillment and yes, drones.

As a former New York Times tech reporter and current Bloomberg Businessweek Senior Writer, Stone has been covering Amazon and the progression of tech & e-commerce for the past 15 years.

“I figured if anyone can tell the story of this iconic company; and the way we shop, read and interact in the cloud, I could be the person to do it,” he told BIA/Kelsey Chief Analyst and VP Peter Krasilovsky on stage.

Through examining the tech giant, Stone began to view it in light of a construct that (Amazon investor) John Doerr has famously devised. This is to separate companies between missionaries and mercenaries.

The former are characterized by founders and cultures driven to change the world or solve big problems. The latter are driven primarily by financial gain. But missionaries often end up achieving greater economic payoff through a more passionate product focus, and are the companies Doerr invests in.

According to Stone, Amazon is both missionary and mercenary. It’s missionary tendencies can be found in the way that it has changed the way we shop, read and consume media. The mercenary side is apparent in its cutthroat business tactics in competition, and famously adversarial work environment.

“Bezos feels that social cohesion, can cloud the drive to the truth,” said Stone. “At [Amazon] meetings, people aren’t shy about what they feel. That plus the frugality of the company makes turnover high. I had plenty of people to talk to for the book, and some were still suffering from PTSD.”

But Bezos has importantly gained the trust of his board and investors that his long term view will lead to giant payoff. This comes amidst razor thin margins and reinvestment of profits in capital-intensive growth strategies. For example: continued buildout of fulfillment centers closer to major cities.

That trust has been earned through Bezos’ track record. With the exception of a few misfires (Fire Phone, anyone), he’s continually gone against the advice of colleagues and his board, and continually proved to be able to see around corners. The Kindle and AWS are a few examples.

“He is a CEO with enormous credibility and a board with patience,” said Stone. “Elsewhere we see Carl Ichan standing over the shoulders of [eBay CEO] John Donahoe and even Tim Cook. Not Amazon… he doesn’t go near Amazon.”

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The big online retailers such as Amazon, eBay, Groupon and WalMart have been focusing on developing same day delivery channels. Same day delivery is an effort that that may not only boost their edge over other retailers, but also add new anchor channels such as groceries, and also boost impulse sales.

We’ve also seen other players experiment with delivery. The San Diego Union Tribune, for instance, has tested delivery of coffee beans with the morning newspaper. Newspapers have been also a channel for free CPG samples with Sunday newspapers for years.

Now along comes Uber, in the midst of an ocean of bad publicity. It is testing a 10 minute delivery program called Uber Essentials, which is an evolution of an earlier Uber delivery test. The program allows under-utilized drivers to drop off key items from Flu medicine to toothpaste to birth control. The items are roughly the same price as local stores. As with Uber car service, items (and tips) are automatically charged to Uber accounts. One possible hangup: customers must meet their Uber driver on the street. They also cannot deliver alcohol.

The program is being launched with a free order up to $20, has a tie-in with a free sample of Dunkin Donuts packaged coffee — illustrating a potential advertising opportunity.

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The Point of Sales revolution that began with Square’s introduction of its iPhone fob in 2009 has continued unabated. Rising consumer expectations, increased mobile and WiFi access and more tools have made POS a strategic tool that could not have been imagined a few years ago.

Among the new breed of solutions are ReachLocal’s ReachCommerce suite; Groupon’s Genome; Heartland’s Leaf; and First Data‘s Clover, which now has 26,000 terminals in the field after its initial release seven months ago.

First Data purchased Clover in October 2013. The tablet-based system was seen as the cornerstone of a new strategy that would update First Data’s reliable, table-based POS terminals. The acquisition of Clover was also designed to integrate with its Perka loyalty program, which was acquired at the same time; and its Insightics analytics.

At Money2020 in Las Vegas this week, First Data unveiled a new mobile -first extension of its Clover station. Poynt similarly showed off its own new mobile-first terminal. Both companies’ mobile terminals are attractive, Apple-like, white hardware mini-tablets. Clover boasts a handle to better hold on to its tablet, while Poynt features a large bump.

A major part of both their strategies is to accept a number of third party Apps. Clover now has dozens of Apps in its store and hopes to have 100 by year-end. The Apps often carry monthly add on charges of $5-10 a month, instead of just being sold for a flat fee, like consumer Apps. The Apps provide such features as employee punchcards; instant ratings and reviews; virtual giftcards; coupon managers; and charity donations. Clover and Poynt also boast printing options.

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