July 2013

In the futuristic world of Minority Report, Tom Cruise’s character walks into a Gap clothing store; his eyes are scanned and a 3D hologram of a saleswoman welcomes him by name and inquires about his satisfaction with his previous Gap purchases.  The movie is set in 2054, but this scene may not be too different from the world we live in today.

Retailers such as Nordstrom, Family Dollar, Benetton and Warby Parker are testing new technologies that track customers’ movements throughout their stores by following the wi-fi signals from customers’ smartphones.  As part of a movement to gather data about in-store shopping behavior, retailers are also using video surveillance technology to detect moods based on facial cues, catalogue how many minutes are spent in a particular aisle and how long a customer looks at merchandise before making a purchase.  Retailers who employ these technologies can use the information gathered to determine the ideal store layout or to provide targeted offers based on a customer profile.  So far, some consumer reactions have been less than positive.  However, this data gathering is no different from the digital equivalent: e-commerce sites that use cookies and other online tools to determine who consumers are and how they shop.  Nonetheless, it appears that, for many, transporting these technologies to brick-and-mortar stores is striking some shoppers as just too creepy.  In fact, Nordstrom ceased experimenting with this technology partly in response to customer complaints.

Those objecting may not realize that location-based targeting has been around for some time.  For example, GPS-based apps can determine whether you are in a particular store and immediately offer products and deals available at that retailer through your mobile device.  While this practice may have turned some consumers off initially, it is increasingly an accepted practice.  One notable difference, however, between app-based targeting and brick-and-mortar tracking is that those who download these theoretically apps expect location-based tracking, whereas those who walk into a store likely do not expect to be monitored and targeted.

The Way I See It

We’ve all dreamed of traveling to exotic locales, living like locals halfway around the world, or taking that long-discussed epic road trip across the good ol’ U.S.A.  When it comes down to it, travel is a luxury, and in the recent economic downturn, budget-friendly trips have been the ones most frequented.  As the economy picks up and a new generation of eager travelers matures, we’re noticing a revived investment in local business growth initiatives and tourism advertising and marketing budgets for cities across the country and around the world.

The Way I See It

  • Stateside, cities are reinvigorating their taglines, investing in digital and social media advertising as opposed to the traditional, often-cheesy commercials, and encouraging visitors to try hidden spots, embrace local traditions, and support local businesses.
  • I see states and cities trying to draw business and economic development in order to grow tourism and business travel.  Everyone wants to get in on the start-up boom, and initiatives like New York’s “We are Made in NY” campaign, which now covers the sides of buses across the city, is aiming to revive Silicon Alley and draw more startups to the city with incentives like subsidized office space and grants, and increased resources and support from the community.
  • I see states and cities around the country opting for local creativity rather than relying entirely on national agencies.  Colorado is the latest with its announced of a “Making Colorado” initiative which will bring together advertising and marketing professionals from the state and also rely heavily on an online forum for feedback from residents on new ideas.

The Way The Industry Sees It

I sat down with Edward Hogikyan, Senior Vice President, Marketing, of NYC & Company, New York City’s official marketing, tourism, and partnership organization, to discuss advertising and marketing strategies used by cities to attract tourists and boost local economies.

Let’s talk a bit about the recent revival of local business growth and tourism initiatives in cities like New York.  How has the general approach in NYC to drawing tourism changed in recent years?

New York City itself is constantly changing.  If you were here six months ago, there are now new things to see and experience, places to dine, exhibitions, shopping, or even new places to stay.  Reminding people of that is important in keeping NYC top of mind as a destination and core to our messaging.  There are also new segments to focus messaging on, such as families – they have been a priority for us.  Over 15 million families came in 2012, a nearly 3% increase over 2011.  NYC is the top U.S. destination for gay travelers and the passage of the same-sex marriage bill, combined with the recent U.S. Supreme Court rulings on gay marriage, has afforded us a new way to message to the LGBT community.  The youth travel market continues to grow, and they are often more intrepid about exploring parts of the city that are outside the typical tourist destinations.  International markets have also been shifting dramatically.  The exponential growth in visitation from China and Brazil, for example, has resulted in a significant influx of cash into the city’s economy as both markets are comprised of serious shoppers.

Considering a city as a brand, how do cities typically measure Return on Investment (ROI) and success, especially with the tie-in to local businesses and growth?

There are several different metrics for success that we use.  One, of course, is total visitation.  In 2012, NYC reached a record 52 million visitors, up from 43.8 million in 2006 when our current organization was created.  We are also the top U.S. destination, with a 33% share of international visitation (the second highest in the country is at 11%).  Next we look at jobs and the economic impact of visitation.  In 2012, we had a record $55.3 billion in economic impact.  There are 356,000 jobs currently supported by the leisure and hospitality industry.  By 2015, we are projecting $70 billion in economic impact and 390,000 new jobs.  Other key indicators include hotel room occupancy and the Average Daily Rate paid for those rooms, and attendance at Broadway and other cultural attractions.

Continue Reading Calling All Travelers: Advertising Cities as Brands