Retail Success Factors: Localization Strategy and Hyper-Localization

Your comprehensive guide to understanding and using localization and hyper-localization in retail — with examples.

Why do retailers need a localization strategy? Because localization is a type of personalization — and personalization is now a must-have. According to a 2021 report, more than 70% of consumers expect personalized interactions with brands — and brands that do it well could see a 40% boost in revenue.¹ No doubt because 80% of customers say they’re more likely to purchase from a brand that provides personalized experiences.²

Okay, so we’re all sold on personalization. But where and how do retail localization and hyper-localization fit in? Let’s explore.

What are localization and hyper-localization in retail?

Localization is a natural extension of personalization, since it’s all about creating retail experiences that are more tailored to where an individual lives. Good localization strategies incorporate local language, customs, culture, needs and trends.

While definitions of hyper-localization vary — and it’s sometimes referred to as extremely well-targeted personalization — the basic idea is that it takes localization deeper, so you can create the most personalized shopping experiences, content and offers. For instance, hyper-localization strategies might leverage data to understand your customers at both a geographic and individual level.

What are some effective localization strategies?

Retailers of all sizes — and budgets — can incorporate localization and hyper-localization strategies into their CRM efforts. That could mean making some product choices based on geographic regions; sourcing locally produced services and products; or sending customers localized content and offers.

Following are several retail localization strategy examples you can use to build stronger (and more profitable) relationships with your customers.

1: Use localization strategies to deliver more relevant messages, offers and content.

When developing marketing messages, offers and value-added content, think about ways to version them based on local preferences, language, culture, even the weather. For example, one resource identifies 24 dialects of American English divided into three regions. A national brand, then, might tweak language slightly to fit the voice of each region.

If you’re creating educational or informational content, a localization strategy might mean using different examples. For instance, a national sportswear retailer might run content for its Long Beach, Calif., audience that includes stories about local surfers and tips on choosing a surfboard. Meanwhile, the same retailer might develop content for its Golden, Colo., audience that spotlights little-known hiking trails and how to pick the right hiking boots.

Adidas goes as far as having different Instagram accounts for some specific cities, allowing them to leverage neighborhood sites and area influencers to create posts that strongly resonate with local residents.

One popular hyper-localization tactic is to utilize weather information in marketing. For instance, a shoe retailer may begin to advertise sandals in its warm weather store locations while still advertising boots at their locations in colder climates.

Using AI and GPS capabilities, retailers can take it a step further by using local weather data to deliver a specific personalized offer to a shopper’s smartphone. For instance, the Timberland email below incorporates a local weather forecast while promoting a product that suits the sunny days ahead. If rain were forecast for Stratham, the email might instead show wet-weather gear.

Shoe Carnival provides a great hyper-localization strategy example for offers. The retailer leverages demographics and shopper behaviors in real time to keep tabs on margins at the local store level. Based on current store traffic and shopper demographics, store managers create on-the-spot offers via a microphone, often updating them on an hour-by hour basis.

2: Use localization and hyper-localization to guide inventory and in-store design.

Leveraging your customer data can inform you about localized preferences and interests, helping guide inventory purchasing decisions for particular stores. For instance, do you have locations where many customers are price conscious, highly affluent or represent a specific ethnicity? Do you have a store in a college town where locals love to show off the school colors?

Target’s “Tiny Target” concept, for instance, features small-format neighborhood stores that cater to the communities they’re in. For example, stores on college campuses cater to that consumer group.

One retail localization example is Nike Live, a concept store in southern California driven entirely by local loyalty member data. Store inventory includes Nike best sellers in addition to city-specific styles based on nearby ZIP codes.

As part of its corporate strategy, Pet Supplies Plus aims to build stronger connections with shoppers by ensuring that each store has a local feel. This includes giving franchises the capability to personalize offers through the Preferred Pet Club loyalty program and on the store’s website. Geography also plays a role in localizing inventory. For instance, stores in the sunny south may promote year-round flea and tick prevention, while stores in the colder northern states might advertise their selection of pet sweaters and dog booties for most the year.

As an example of hyper-localization, global retailer H&M leverages shopper data to customize inventory at individual store locations. By using technology to analyze store receipts and loyalty card data, the retailer has been able to minimize returns and maintain better control over supply and demand. For instance, data may reveal that skirts are more popular in one store, but less appealing to customers in another location.

Another localization strategy is to source locally made items in your inventory, even if it’s a small section labelled “from the neighborhood.” For instance, retailer West Elm created its West Elm LOCAL program, which showcases (and sells) handpicked products from local designers in more than 90 neighborhood stores.

You can also incorporate retail localization and hyper-localization into your store’s look and feel. For instance, Glossier weaves local personality into its pop-up store design — building significant buzz and affinity with local consumers. The Seattle pop-up had moss-covered installations and trees that evoked the Pacific Northwest. And the London store featured a pink rooftop as tribute to the city skyline.

Keep in mind that for all these strategies, national retailers don’t need to localize everything. By blending a large selection of what’s available across all stores with a minimum assortment based on local relevance or known customer preferences, you’ll show your customers that you understand them and their community. This type of retail localization can enhance the shopper experience and help you build stronger relationships with your customers in every location.

3: Extend retail localization strategies to marketing campaigns.

While your localization strategy should align with your overall brand, there are ways to blend in a specific region, state, city or community. Here are some examples:

Localization in marketing look and feel.

Imagery depicting specific communities, regional features and area events can lend a local feel to your marketing — making it feel personal and relevant to consumers in that location.

Implement web localization strategies.

Web browsers can typically identify a visitor’s location based on IP address, which allows you to customize the web experience. This might include using dynamic content or versioned web pages to showcase local product preferences, language or even geo-centric lingo. For instance, the Nescafe website delivers different layouts and designs for different regions. (Try it out: Visit the website and click Select Location to see home pages around the globe.) Website localization strategies can also boost your SEO efforts.

Geo-target for hyper-localized social media.

The Nieman Journalism Lab found that geo-targeted social posts were six times more successful than general posts.⁴ Tag locations, hashtag local keywords and use other geo-centric terms and images in your social posts and paid social, and use local extensions in Google.

Leverage local media.

Use local media — ideally with localized messaging — to increase brand awareness in specific communities and build rapport with those consumers. Pet Supplies Plus does this through local offer flyers (which are also posted on its website) and advertising within the neighborhoods surrounding each store location.

Participate in community outreach.

Sponsoring (or holding) local events, supporting community charities and sharing success stories or testimonials from local customers can all help strengthen your brand’s local presence and relationships with customers in those areas.

Take the lead with retail localization.

A full two-thirds of marketers say they’re not satisfied with their company’s localization efforts, according to the CMO Council.⁵ That presents you with an opportunity to gain a competitive advantage by implementing effective retail localization strategies.

In turn, localization and hyper-localization will help your brand gain a deeper understanding of your customers’ shopping habits and communities. And the more you can use those insights to anticipate shopper needs, the better positioned you’ll be to meet shopper expectations, ultimately leading to long-term loyalty and increased sales.

Sources

1 “The Problem with Traditional Consumer Segmentation and How to Fix It,” Diane Keng, MediaPost Agency Daily, posted May 23, 2022, https://www.mediapost.com/publications/article/374136/the-problem-with-traditional-consumer-segmentation.html, accessed June 15, 2022

2 “More Than a Name: 10 Ways Marketers Personalize Emails,” Martyn Lee, Litmus, posted May 18, 2022, https://www.litmus.com/blog/more-than-a-name-13-ways-marketers-personalize-emails/, accessed June 15, 2022

3 “Top Retail Stats for February 2022,” Kirsty Birkett-Stubbs, Avensia, posted Feb. 16, 2022, https://www.avensia.com/knowledge-hub/blog/posts/stats-february-2022-localization, accessed June 15, 2022

4 “Localization marketing has got a whole lot more local in the past two years thanks to geo-targeting — the practice of delivering content to a user, based on his or her geographic location,” Ben Whittacker-Cook, Straker Translations, https://www.strakertranslations.com/2017/08/geo-targeting-social-media-localization-marketing-new-areas/, accessed June 15, 2022

5 “Top 4 Ideas for Localizing Your Retail Marketing Efforts,”MarcomCentral, posted April 3, 2020, https://marcom.com/4-retail-marketing-localization-ideas/, accessed June 15, 2022