Posts Tagged "Retail"

In an article published last Monday, Adage identified 6 applications created independently of retailers that are making a significant impact on the shopping experience. The article speaks to the challenge of retailers to adopt not fight this new transparency.  The applications reviewed are some of the very best at putting the power in the hands of the consumer by offering real-time coupons, in-store product reviews, competitive pricing, alternative store locations and more.

With 41% of iPhone users apparently actively checking prices, it’s obvious some retail CMO’s see these competitive applications as a threat. However the majority of big name retailers have already adopted and created their own integrated shopping applications to compete with these consumer advocate apps that threaten their pricing. North Face, Best Buy, Home Depot, Target, Nike, Gap, Wal-Mart, and Banana Republic all have integrated shopping applications, while Crate & Barrel, and Disney stores have their applications in development.

The challenge however is not to just develop a mobile shopping application, it is to create an incredible user interface that makes it simple and fun for your customers to shop with you. It is to create a fundamentally different way for customers to interact with your store.

For example, the NikeID store let’s you pick shoes out based on colors from photos in your phone. I found some great Nike Dunks just by showing a photo of a Fuji apple. Wal-Mart’s application lets you snap a picture of your living room wall to figure out an appropriate television size.

As more retailers enter the mobile ecosystem, it becomes clear that they must create a mobile shopping experience that goes above and beyond just acting as a portal if they want to keep their customers shopping with them over strictly shopping by price. With a combination of loyalty points, cool customization, interactive features, and convenience it’s still possible for the big name retailers (and brands) to win out.

Learn more about mobile application development at our resource center.

The title of this article today on DMNews.com titled, “Marketers still missing opportunities with loyalty programs: Survey” immediately brought to mind this recent post of ours, as well as the answer to the missing component: mobile engagement.

The article doesn’t call this out per se, but does strongly imply that engaging in-store strategies such as SMS text message promotions are an absolute necessity to address the potential threat to retailers offered by comparison enabled mobile shoppers:

“…when it comes to consumers, nearly 65% acquired information about the programs in retail environments at the point of sale, compared to only 2.8% who did so on social media networks.”

The article is based on results of a study released today by the Chief Marketing Officer Council and conducted by IBM and Ricoh.  Its key finding is that although marketers are focusing spend on social networks to communicate loyalty programs, consumers are unreceptive to this channel as opposed to strong calls to action in and around the point of sale.

A similar focus on email marketing is also cited as a disconnect between marketer priories and consumer preferences.  Speaking of preferences, relevancy is found to be at the core of effective loyalty programs regardless of how an offer is delivered.  Certainly, data is crucial to developing targeted offers, the kind of which can be efficiently collected also via text message programs such as customer surveys.

Marketers need to as well be aware that even relevant offers may struggle against the tide of comparison shopping enabled consumers expected to change the retail landscape this year and beyond.  Successful retailers will build relevancy into their loyalty programs, but also recognize that engagement strategies such as SMS text message promotions advertised in store can prevent customers from leaving for better deals, addressing key challenges threatening to make loyalty a mythical concept.

This January 20, 2010 article on Mobile-Financial.com features results of a survey of mobile commerce shoppers that retailers would be wise to review.  As we have blogged about before, comparison shopping on mobile devices represents a challenge to retail marketers, one that begs for compelling engagement strategies to keep customers from leaving stores for better deals elsewhere.

The survey finds product recommendations accessible via mobile devices as a huge opportunity for retailers, with 65 percent of those surveyed saying they would make purchases were it easier to find products of interest.  Retailers heeding this advice will implement mobile-accessible product reviews and recommendations based on factors such as real time inputs by a consumer (looking for a plasma screen TV, what are my options?) and historical transaction data if available (purchased TV in the past, suggest a DVD player).

A potential battleground retailers need to keep eyes on is the mobile product reviews/recommendations/comparison space.  On one hand, retailers can develop branded mobile experiences for their customers that are essentially “closed” environments by virtue of product selection limited to that one retailer.  Combined with clever engagement strategies such as mobile promotions, this can effectively combat third parties that aggregate product information, prices and reviews across retailers.

These services could render retail store environments as mere “pick up” spots for products browsed, reviewed, and compared by mobile shoppers.  The retail sector may be in store for a complete shift in power unless mobile engagement strategies rise to the top of marketing plans and priorities.

Dwell time was a concept I first came across years ago as a web analytics measure designed to provide ecommerce marketers with insight into how long a visitor took to either make a buy decision or abandon the site for another.  It seems the same is happening around mobile enabled consumers as they browse retail stores, introducing new challenges for marketers.

Although it doesn’t say so, this post yesterday on eMarketer.com suggests that providing incentives designed to keep your mobile savvy customers in store is closely tied to ensuring they don’t bail and visit another store for a better deal:

“The threat comes from in-store shoppers using their phones to check sales prices at other retailers.  Compete found that 41% of iPhone users and 43% of Android users do just that.”

“You could argue that every retailer on the planet is an off-balance-sheet showroom for Amazon.  So if you go into a retailer’s store and you see something you like—type in that manufacturer’s SKU number and check the price on Amazon. You’ve looked at it, you’ve touched it, felt it, and now you’re getting the benefit of potentially getting the best price on it too.”

To meet this challenge, the post recommends “A retailer’s best defense for maintaining customer loyalty is to develop a mobile offering that allows in-store shoppers access to customer reviews and other product information on its Website.   This is where the opportunity lies for retailers.  By providing mobile access to their extensive online product information, they help customers feel more comfortable about making a purchase.”

This is a logical recommendation, yet it will not prevent price sensitive, mobile enabled customers from comparison shopping and potentially leaving the store.  It also ignores reseach suggesting that loyalty not be the target, but rather engagement.

To keep customers in-store and increase the probability of purchase, retailers should build engagement strategies into their mobile plans such as text message promotions like sweepstakes and other contests.

Consumers value their time as much as their money, which is why many are excited at the prospect of instantly performing a price comparison quickly then moving onto another store.  Retailers who create engaging mobile programs that keep customers in-store such as promotions lessen the likelihood that they will take the time to visit another store.

Today on MobileMarketer.com there appears an article sure to be read by many.  It’s about the potential threat to retailers represented by mobile-enabled consumers who may be redirected to other stores to find a better deal by performing price lookups on a particular item.  Considering the ease by which consumers are able to perform this comparison, it appears a scary scenario to already margin-strained retailers.

The article concludes with this statement, making it sound as if retailers attempting to create engaging shopping experiences raise their hands in surrender:

“Consumers will care less about where they shop and more about satisfying their purchase requirements.”

I bet you could find similar statements made about 10 years ago around how e-commerce websites would put brick and mortar stores out of business.  Yet that didn’t really happen, as brick and mortar stores such as BestBuy and others created complementary online stores.  Late to game retailers like Toys R Us paid a heavy price, however.  Why would it be any different if consumers can research and compare products while “on the go?”

One way the article suggests is that retailers will be forced to match lower prices if consumers can prove it by showing their mobile device to a cashier, or worse lose the sale as the customer leaves for another store.  Loyalty, already so hard to engender among customers, is literally out the door as a means of creating a steady flow of business.

In reality, I don’t think the situation will be this dire, but retail marketers have a new mandate to create engaging shopper environments to encourage customers to remain in store and make purchases.  Especially for considered purchases versus impulse buys, consumers will likely perform online research in advance of venturing out to stores.  Items such as plasma screen TVs or washing machines, for example.  In these instances it’s highly improbable a consumer will even perform a comparison price lookup in store because they did so already.

There will be exceptions, but I just don’t see retailers hurt too much by this trend, especially if they work hard toward creating highly engaging – and branded – mobile experiences for their customers.  Those who do will be more akin to the BestBuys of the mobile realm as opposed to the Toys R Us’.

Key to a successful mobile strategy is understanding how your customers can be best served in the mobile channel.  Yesterday we blogged about UPS and its research which showed that a native Blackberry application provided its targeted customers a better experience than prior efforts or those offered by competitors.

Homefinder.com drew a similar conclusion when analysis of mobile website traffic showed most browsers used iPhones (that’s a photo of Reuters’ ticker in Times Square displaying the news).  Leading with a focus on the mobile customer experience is no longer emerging as a best practice – it just is.

That’s what marketers should take away from this news today about Target, a retailer ahead of the curve when it comes to mobile channel marketing.  As we have discussed here before, mapping your strategy to the mobile channel identifies the most logical first steps into mobile marketing.  Target has done that across all elements of the mobile customer experience; SMS text messaging, mobile smartphone applications and the mobile web.

It is equally important to ensure ongoing analysis of these efforts.  This can take the form of metrics around specific programs, such as response rates and transactions, but forward thinking marketers like Target take it a step further.  Target integrates a feedback step into many elements of its mobile marketing programs to see what works, what doesn’t – and uses this qualitative and quantitative data to drive better mobile marketing decisions:

“ To overcome these challenges (of getting into the mobile space), we are focused on understanding our guests’ needs by creating mechanisms that allow them to provide us with feedback.

Then, we use this feedback to inform our decision-making and to optimize and improve our mobile tools.”

In practice, marketers need to consider partners that offer this capability in a manner that closely relates to the mobile interactions being evaluated, and offers the greatest reach possible.  Interactive Mediums’ Engagement Platform offers SMS text message based survey capabilities that allow multiple questions to be posed to consumers and answered in real time – using common feature phones carried by virtually every consumer.

Today I came across an article on MarketingProfs.com titled, “Brand-Building: The Limits of Engagement,” (registration required) featuring some sobering statistics for brand marketers focused on developing loyalty with as many consumers as possible:

• Half of your loyal buyers this year will not be loyal to you next year (Catalina Marketing’s analysis of tens of millions of shoppers).
• The 20% of buyers who account for 80% of sales includes super-heavy category users who might even prefer another brand and purchase that brand more.
• On average, 30% of loyal buyers do not have attitudes about your brand that support their loyalty and are the ones who are most likely to defect.
• For most brands, only a single-digit fraction of your customers connect to you via social media.

So despite so much emphasis on developing loyalty programs and the hype surrounding social media’s influence on consumer behavior, the facts suggest brand marketers are struggling against a tide they cannot overcome.  The article also raises interesting statistical research showing that successful brands connect not only with frequent, loyal customers, but all potential consumers:

“…you must find more people to become loyal, but you also must increase your share of purchases among those who buy your brand less than half the time.”

To achieve this, the author suggest marketers focus on “activating” their brands with consumers, which entails “imaginative shopper marketing, visibility, packaging (which is your ‘ad’ that every buyer sees), the right configuration of features, the right price, findability as people search and pre-shop digitally, and buying ads in special-interest magazines… just to mention a few ideas.”

I suggest that marketers identifying with these challenges look to mobile marketing tactics such as interactive text message promotions and sweepstakes that can pull consumers into perpetual dialogs with brands.  Promoting such programs at and around the point of sale is one approach brand marketers can use to influence less loyal consumers to consume their products.

The statistics and statements like the following suggest it’s imperative for marketers to look for ways of engaging as many consumers as possible with their brands.

“The marketing approach that calls for building brand engagement isn’t wrong, but it’s incomplete.  It doesn’t help you figure out how to grow the half of your sales that comes from less-loyal buyers who find multiple competing brands are acceptable.”

Given the reach offered by text message-enabled consumers and proven response rates in the 20-30 percent range, mobile promotions are a logical solution to this challenge.  Engagement platforms such as that offered by Interactive Mediums provide marketers a multitude of approaches to suit any promotional requirement.

It was notable today that on Retailwire.com there was a news item titled, “Whole Foods Goes Mobile.”  It’s not every day that retailers, grocers in particular, announce mobile efforts.  So I was excited to see that a specialty grocery chain familiar to me now had some kind of mobile presence.

The news content appears driven by Whole Foods, and underwhelmingly describes the move this way:

“The site basically provides customers with the features of wholefoodsmarkets.com while on the go.”

I am a huge proponent of targeting customers while “on the go” – we blog about it all the time.  However, it’s equally important to consider how your customers’ on the go experience with your brand can be enhanced by a mobile web presence.  Simply scaling your website to the mobile form factor is a shortsighted strategy that can have negative consequences.  Failing to impress the first time makes it that more difficult to approach mobile consumers in the future.  As well, the expected explosion in mobile browsing by consumers means that it will soon be challenging to stand out among the crowd, just like on the “regular” web.

Much attention is paid to mobile applications for platforms like the iPhone, yet research cited in a recent article titled, “Mobile Internet is 450 million users strong and doubling in four years,” suggests businesses in any segment need to develop a solid mobile web strategy, and soon:

“In October, Gartner reported that smartphones accounted for 14 percent of overall mobile device sales, but would grow to 37 percent by 2012.”

“Gartner forecasts 180 million smartphone sales in 2009, exceeding notebooks for the first time. From 2009, Gartner predicts that consumers would spend more on smartphones than notebooks.”

Bottom line is that millions consumers will be armed with quality mobile web browsing devices and drawn to those sites which offer a valuable experience while “on the go.”  Surely scaling down a website to a small screen is insufficient.  Comments posted on Retailwire.com echo this sentiment:

“Perhaps they could integrate some sort of coupon or loyalty program in the mobile app that will get more people to visit.  ‘Flash the barcode on your phone for a discount’ type of thing.  I suspect the average WF customer has some sort of smart phone or is technologically savvy so marketing this way makes sense.”

“No ‘perhaps’ about it…the mobile site should incorporate coupons, loyalty offerings and other ‘do it now’ type features that are unnecessary on the main site.”

“Whole Foods in particular is challenged in today’s value-oriented world.  The company is losing its cachet, for a variety of reasons. It needs to do more than just sell expensive stuff and expect shoppers to assume high quality.  By making an investment in its customers’ shopping experience, it can re-elevate itself to some extent.”

Several different articles came across my screen today, all relating to mobile couponing but from unique perspectives.  What’s interesting is that mobile couponing has yet to really “take off,” yet retailers may already be looking past couponing to higher value mobile applications.

This article today on eMarketer.com cites research into mobile coupon redemption (chart pictured in this post) suggesting real “hockey stick” growth after 2011.  The article also mentions consumers tend to be less interested in couponing than in using their mobile devices for product research “on the go” – such as “scanning images or bar codes with their mobile phone to get more information or coupons for a product.”

That quote is interesting in light of another article, this one about Google again making a move into QR, or Quick Response codes.  QR codes are two dimensional bar codes that when scanned with the camera function of a Smartphone present a variety of information about the code – the company or store it represents, links to a website or any number of details helpful to a consumer, including special offers or coupons.  Google’s strategy is to place 100,000 QR code stickers in businesses across the U.S., all of which do not require specialized software – a limiting factor in prior trials of QR codes which often required proprietary reader software.

Google’s efforts are well aligned with trends suggesting consumers are more interested in product research than coupons – even if QR codes can serve both purposes.  Widespread QR adoption may be just what retailers are seeking, based on this article today from Retailwire.com.  Although coupons are a logical mobile application, this viewpoint reveals the “necessary evil” aspect to couponing:

“The downside of mobile coupons is the back-end cost of redemption, which makes a successful promotion increasingly expensive.  Coupons are also the most basic of triggers for shopper engagement, with little long-term loyalty benefit.”

The article poses the question, “what’s next?” and goes on to suggest retailers build mobile strategies geared around an enhanced shopping experience, in and outside the store.  It’s apparent that retailers will benefit most from strategies geared around creating positive mobile customer experiences for their customers.

Widespread QR codes are just one element that will help connect consumers with retailers in value added ways – including couponing – but the greatest value will stem from targeting customers at the point of device to drive sales, cultivate loyalty or increase brand affinity – otherwise called Active Customer Engagement.

Today I came across a November 25, 2009 MarketingSherpa.com article titled, “One-Two Campaign Punch Grows Email & Mobile Lists: Segmentation Delivers 40% Lift in CTR” that is a great example of Active Customer Engagement in action.  As we have said before, Active Customer Engagement is not so much about mobile as it is targeting consumers “on the go.”  In this case, the targeted customers are truly active, as the example cited in the article is for a retailer of sporting goods, bicycles in particular.

Similar to what we described in our Point of View on Active Customer Engagement and this actual customer example, email, web and mobile communications work together as part of a larger effort consisting of media buys supporting a promotion.  It isn’t apparent that the retailer had access to a system encapsulating all the components required to configure, execute and measure the program, but you can be certain if it did, ROI would have been greater.

A tidal wave of buzz is building around Active Customer Engagement, as illustrated by another recent article outlining the solution here on the Illinois Technology Association website.  Today as well, we were featured in a brief article titled, “Time to market with mobile” at brand-e.biz in which we say the following that gets to the heart of what Active Customer Engagement’s value is all about:

“What should drive mobile marketing investments is a strategy which focuses on the customer experience, what you want to achieve with your customers.  Developing ideal mobile paths for your customers to follow to achieve your goals should yield the best results…And in practice this will almost always mean some combination of text message interactions, mobile applications, mobile optimized web and even e-mail.”