Although, paper coupons, FSI’s, e-mailed & web-printed coupons represent the vast majority of coupons used, the transition to mobile is starting to unfold quickly. Currently CPG brands as well as retailers are deploying various types of mobile couponing programs to help fight the private label threat.

We have heard many reports of technologies being deployed that vary from a numeric code delivered via SMS text message through actual digitized bar codes that render on a mobile device for scanning at the point of sale.

Unfortunately these types of mobile coupons are often very laborious, and take too much time in the checkout lane. Delivering coupons via mobile or handheld device should represent a timesaving convenience for consumers, not add more steps to the money saving process.

The purpose of mobile couponing is indeed designed to eliminate the need for clipping and sorting, and help retailers & brands cuts costs on coupons that frequently head straight to the trash bin.

What we see at A&P and a few test market Krogers is different. It is a mobile couponing program that links directly to your loyalty card/account at the retailer.

This means all of those text codes, & screen capture bar codes can be eliminated. A customer can opt-in to receive SMS coupons on their mobile device, or browse a selection via application or mobile web, and when they find one they like, they just click save & it’s automatically saved to their loyalty card. Now when they are in Target this weekend they will get the deal on toilet paper just by scanning their card.

In this scenario, the consumer has received their savings in convenience, the retailer/CPG brand have sold a product through a targeted price-reduction approach, and cut the cost of one paper coupon in the process. Everybody wins.

This is exciting and the analytics & tracking capabilities will definitely make marketers happy. Only time will tell if this will emerge as the best shared practice, and how quickly this could be adopted industry wide.

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 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.

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.

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.

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’.

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.

• 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.

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.”

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.

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.”

You might not think mobile marketing has a role in purchasing behavior involving workers shopping online from their desktop computers at work.  Unfortunately for employers concerned with productivity, mobile can – and will – play a significant role driving online transactions in a couple of days.

First, some statistics illustrating how important Cyber Monday is for retailers, from this November 23, 2009 article titled, “Retailers Power Up Cyber Monday Promos.”

“…87.1 percent of retailers will have a special promotion for Cyber Monday, up from 83.7 percent last year and 72.2 percent in 2007…”

“This year, 53.5 percent of workers with Internet access, or 68.8 million people, will shop for holiday gifts from work.”

This November 24, 2009 post titled, “New Partnership to Deliver Mobile Deals on Cyber Monday,” describes an online portal where retailers can promote offers associated with Cyber Monday.  Here, consumers may register to receive text message alerts for “a Deal of the Hour mobile marketing offer.”  This is a great example of how Mobile marketing techniques can add value to an otherwise static shopping activity.  The post, quoting from a press release on the topic, sums it up as follows:

“The brevity, immediacy, and mobility of the text messaging channel makes it ideally suited for communicating CyberMonday.com’s Deal of the Hour.”

I wasn’t aware of many statistics such as these which show retailers are taking to the mobile channel very aggressively, learning a lot as they go along:

“There are 112 retailers, 58 in the Internet Retailer Top 500, with 153 m-commerce sites and/or apps.”

“North American mobile commerce sales will top $750 million this year, according to new data from emerging technologies consulting firm ABI Research.”

“Retailers in mobile commerce report consumers are not just browsing or comparing prices, they’re buying—and sales are growing. EBay, for example, reported a whopping $380 million in sales through its iPhone app and m-commerce site for the first nine months of 2009.”

“EBay’s mobile site and app combined received 5.4 million unique monthly visitors in August, according to The Nielsen Co. Amazon.com received nearly 3.5 million, Gamespot about 2.5 million, Fandango nearly 2.4 million and Netflix just over 2.2 million.”

E-commerce technology vendors are apparently scrambling to meet increasing demand for systems which can extend traditional online stores to the mobile channel.  In spite of all this action, I can’t help but question using such a loaded term as “M-Commerce” to describe the benefit to retailers.  Particualrly in light of statements like this:

“77% of retail chains see high value in mobile commerce as a way to connect the online world with physical stores, according to a new study from Retail Systems Research.  Store-based retailers view mobile as an opportunity to connect their various channels.”

“We’ve found that the mobile site is driving sales in stores…It’s keeping some customers in stores longer by giving them all this information at their fingertips.”

“…it’s still early days for mobile commerce, and most retailers are not revealing revenue figures, a sign that sales directly through the phone remain relatively modest.  But the retailers that have jumped into m-commerce are learning valuable lessons about the best designs for mobile phones, how to market to consumers through mobile devices, and the special opportunity to tie the mobile phone—which most consumers carry with them always—with in-store shopping.”

So it would seem that early adopter retailers are letting the mobile customer experience drive their approach to achieving their goals – commerce and transactions among them.  A Gartner Group Research chart in the article, shown in this post, supports that conclusion.

When retailers report mobile commerce revenue separately from other channels, as Ebay recently began doing, that is one case.  However, I suspect most retailers stand to gain the greatest benefit by viewing mobile as a powerful channel to influence consumer behavior in revenue and profit producing ways.  It’s more of a marketing problem, than of figuring out how to arm customers with mobile cash registers.  It’s about active customer engagement.

I thought the most actionable takeaway for retailers was around the urgency in moving on a mobile strategy, but doing so thoughtfully to avoid fixating on one tactic or approach, such as a mobile commerce website or application.

“Retailers must decide when—not if—they will launch m-commerce sites or apps, says m-commerce analyst Ian Fogg in a Forrester Research Inc. report titled ‘Why Mobile’s Time Has Come.’  Failure to pick the right approach now will lead to others seizing control of the new landscape that extends to every minute of consumers’ lives, 24/7.”

“Basic skills needed for mobile commerce are roughly similar to those required in e-commerce…But there are whole new sets of skills required, such as ones for developing text message marketing and mobile apps, that I.T. and other departments must research in-house or in conjunction with vendors.”

Given the escalating adoption of devices capable of providing a decent mobile web experience, the argument at first makes sense.  Yet, a lot of research tends to support mobile commerce for certain types of products not usually associated with large e-commerce stores (such as those of big retailers).   To me it’s a question of relevance given the active, on-the-go nature of a consumer.  The fact a rich mobile web may be a ways off is another consideration.

Ordering a pizza or burrito via mobile device, even choosing topings or ingredients, is today a great mobile commerce application.  It seems though that for purchasing items of greater value — considered purchases – a more thoughtful process is required which means consumers will tend to use a desktop PC — or some combination of online and in-store activity.

I think mobile commerce around considered purchases will be most effective when it’s part of a strategy focused on the mobile customer experience.  Many businesses are taking this approach successfully today and if I’m right, it suggests you won’t soon see full on e-commerce sites as stand-alone profit and loss centers anytime soon.

Titled “Mattel Goes Direct to Consumer Online,” the post describes how Mattel, the U.S.’ largest toy manufacturer, is selling its products direct to consumers via a new ecommerce web presence.  Although ½ of its revenue derives from just three large retailers, Mattel is able to do this apparently without disrupting traditional sales channel relationships.

The author posits why the CPG industry doesn’t also adopt the approach, given a similar dependency on a small universe of distribution channels.  I suggest one reason is that traditional CPG products remain the domain of the in-person shopping experience facilitated by real stores, as opposed to the web.

For that reason, direct customer relationships can be established and developed by CPG marketers today using mobile marketing techniques applied to programs such as loyalty, product trial and couponing.  Mapping your marketing strategy to the mobile channel is a good first step.

Similar to how Interactive Mediums client Newser recently extended its service to mobile via an iPhone application as part of an ongoing mobile channel strategy, Coupons.com is also making progress beyond its initial steps.

Although the notions of replacing loyalty cards with mobile devices and presenting digital coupons or bar codes at the point of sale are very sexy, in practice these face all sorts of challenges – technically and process-wise.  Coupons.com appears to have learned how to overcome them by focusing on the mobile customer experience.

“…integrating digital coupons with loyalty cards is the most practical solution to enabling downloadable discounts in busy stores where consumers often have multiple purchases eligible for discounts.”

“We’ve seen the [couponing] industry flirt with all things of digital format for some time, all the way from the absurd—the notion of presenting barcodes on phones in high-volume checkout lanes—to the legitimate and tested, including digital loading onto loyalty cards.”

With a shopping list iPhone application already under its belt, in taking its mobile strategy to the next level Coupons.com has done the following:

• Offer traditional and mobile optimized websites which allow consumers to register their loyalty cards, browse coupon offers, and elect to have certain offers digitally attached to their accounts so at the point of sale they are redeemed as a group, as opposed to one at a time.
• A revised shopping list application which allows consumers to take photos of product bar codes to automatically have items added to a grocery list.  The application also integrates with the coupon program so that eligible products are flagged for addition to the consumer’s loyalty card account.
• Recognize the difference between coupon redemption associated with multi-product purchases (grocery) versus those associated with one large purchase (restaurant).  To that end, the mobile site allows selected offers to be saved on mobile devices for presentment at checkout without need for a loyalty card or account.

The last point is notable as it recognizes that coupons and offers may not be one in the same, and can have different practical applications:

“Mobile presentment has been a technology looking for a use…Where it works best is in low-volume, high-margin transactions—consumer electronics and things like that– and at the local level. We have over 12,000 offers with restaurants, dry cleaners and professional services, and phone presentment works very well there.”

“It’s all about moving people quickly through those checkout lines…Searching for multiple coupons on your phone, then showing each one, perhaps dropping your phone in the process—those are not conducive to speed.”

What is speeding up is the rate at which mobile marketers are learning from, evolving and improving upon their initial experiences.  Exciting times for mobile marketing.

“42% of 18-to-34-year-olds and 33% of 35-to-44-year-olds are at least somewhat interested in receiving opt-in mobile alerts from their favorite places.”

“Among respondents who would opt in to location-based alerts on their mobile phones, more than one-half were interested in messages from restaurants, followed by movie and event tickets, weather, and clearance sales.”

Just like any business strategy, however, it isn’t just a question of attitude toward mobile communications; it is as much about actual consumer behavior “on the go.”  Mobile can be a powerful tactic, but its ultimate value derives from programmatic use as part of a broader strategy targeting the mobile customer experience – in this case competing for consumer dollars in a down economy.  The research supports use of mobile as an ongoing customer relationship management strategy which takes advantage of natural shopping behavior:

“90% of consumers have made impulse purchases while out shopping because of a sale, and 22% of mobile users did so weekly. Marketers that let consumers know about local offers at the right place and time might take advantage of such behaviors.”

The fact consumers will make impulse purchases independent of mobile interactions represents a major untapped source of business for retailers.

To take advantage of this quickly, retailers need to partner with firms like Interactive Mediums who will help shape the best path toward meeting business objectives.  Starting by developing a mobile marketing strategy map is a logical first step.

I have made past references to some of these firms but thought taking it a step further and outlining how we see options in the marketplace might help buyers make a decision more easily and quickly.

We view mobile as an interaction channel inclusive of technologies which help marketers implement strategies around the mobile customer experience.  For many businesses, be they in the retail, consumer packaged goods (CPG) or broadcast communications segments, mobile is as much about engaging customers while “on the go” to achieve some business objective (sales, loyalty, brand affinity, etc.) as it is a “feature” to be sourced from a current marketing service or system.  For this reason, “Active Customer Engagement” is as appropriate a label as any to describe the capabilities a firm like Interactive Mediums brings to its customers.  It is also in the crosshairs of companies in the email marketing, marketing services, CRM platform, and creative services segments.

The accompanying diagram illustrates the general approach each of these segments takes to mobile within their respective portfolios.

Email Services Providers: Mobile as text messaging complement to email delivery/additional channel for communications.

Marketing Services Cos: Mobile as text messaging/additional channel of communication as part of diversified marketing services utility.

CRM Platforms: For B2B, mobile means field sales enablement, for B2C it means text messaging complement to email.

Agencies/Creative Services: Basis around which advertising, branding and marketing campaigns are built.

Each of these touch on an attribute of Active Customer Engagement, but none fully meets the requirements of catering to the mobile customer experience.  We realize marketers with pre-existing relationships with firms in these segments owe it to themselves to evaluate them as options when approaching the mobile channel – and in some cases may elect to utilize them.  For this reason, Interactive Mediums takes an open approach which allows us to fully deliver the benefits of the mobile customer experience to clients yet integrate as necessary with others in the ecosystem to ensure clients achieve their objectives.

If retail marketing leaders are as fixated as described in the following quotation, I strongly suggest they tap into knowledge bases like Hello Mobile to see how retail and other industries are moving beyond the novelty factor to leveraging mobile strategically:

“The retail CMO is looking for some new-fangled, high-tech way of engaging with this itinerate shopper.  The sage truth is that the marketing department is chasing shadows…Instead of focusing on the consumer and how they are leveraging mobile in their stores, they are investigating widgets and apps that have little to no reach or frequency in their consumer base.”

The author lumps retailers and packaged goods firms together in making two recommendations to their marketing leaders:

• Learn from history: We blogged about this idea in a slightly different context here, but the gist is that the desktop computer/Internet/email drama is again playing itself out in the mobile space and leaders unable to see the similarities are missing the boat:  “I-want-one-too CEOs are running to their agencies and IT department and developing application that only five percent of consumers are returning to after a lonely month on the phonetop.”
• Learn from your consumer: We talk about a focus on the Mobile Customer Experience, and the author wisely recommends observing your customers in the store environment to see how they use a mobile device while shopping.  “They are doing two things in your aisles: using their phones to browse and text. Is the consumer opening the browser to find tips and information to help with their shopping experience? Are they messaging home for the shopping list? Possibly. But the shopper is certainly not scanning 2D codes with their phones. They are not opening the security on their Bluetooth settings for inbound offers. They are not all downloading your app to their phone.”

The greatest challenge marketing leaders have is knowing how to start and who to partner with to realize their mobile aspirations.  There are numerous technology, consulting and agency resources ready with capabilities and proven successes to share best practices and prescribe the best way for retailers and packaged goods companies to begin using mobile strategically to develop and improve customer relationships.

Positive results for programs like this are increasingly commonplace, but if this is true, then it goes without saying that return on investment based on a 32 percent increase in sales is phenomenal.  What is most interesting is how Hooters approached the project with an eye on confidently determining its effectiveness.  For example:

• Business Objective: “..the overall strategy was to increase Hooters’ store traffic.”
• Targeted Mobile Experience: “The aim of the promotion was to make it more convenient for viewers to learn how to join the Hooters Mobile Text Club.”
• Measurability: “..Hooters wanted a way to track the number of responses to the VOD (video on demand) and the number of people choosing to opt-in to the program.”

This is an approach similar to our view of targeting the Mobile Customer Experince based on business objectives.  In this case Demand Generation was the marketing initiative.  We also prescibe a focus on data collection and reuse via a Mobile Customer Data Asset.  While the article doesn’t state as such, you might imagine Hooters interested in understanding the quanity and velocity of customers going through the process, not unlike how salespeople gauge the movement of prospects through a sales cycle.  Like this:

• (Suspects) Top of funnel: “…the number of customers clicking the remote to see the longer Hooters VOD, as well as the time spent watching it.”
• (Prospects) Middle of funnel: “…the increase in the number of people added to the mobile database. State of Text provided tracking consistent with TV day-parts.”
• (Sales) Bottom of funnel: “State of Text compared the data with the TV schedule to determine the effectiveness of individual programs. Hooters tracked redemption rates at the store.”

This is yet another great example of a retail/restaurant taking a strategic view of mobile and leveraging it to achieve real business value.  It suggests that should Hooters at some point utilize reality augmentation you can be sure it targets a business problem and isn’t just a clever novelty associated with its somewhat offbeat brand.

On the side of “going it alone” are benefits such as: 1:1 marketing potential, meeting custom requirements, ensuring intellectual property and data protection, and easier integration with internal systems.

On the side of partnering with a third party are: convenience, market reach, lower initial cost of ownership, and faster time to market.

The last point that straddles both is Shopper Loyalty, which can be met via some combination of both individually developed and branded applications and third party services.  Ultimately, that conclusion is the answer to question; it fully depends on the retailer’s business objectives then determining how best to meet them with available mobile marketing approaches.  At Interactive Mediums, we call this process “Mapping Mobile to Your Marketing Strategy.”

With its eye on the Mobile Customer Experience, Wet Seal recently launched an iPhone application designed to help in store shoppers assemble logical outfit combinations and share these via email with friends.  The company has a history using SMS text messaging as well, and although the specific application is not mentioned, you can imagine that they have built a database of opted in mobile customers via promotions and discounts used as calls to action.  A mobile web presence is next up on their priority list, bringing the value of their brand to the mobile consumer.

Interactive Mediums recently published a paper titled, “Mapping Mobile to Your Marketing Strategy.”  It features a diagram marketers can use to build mobile into their plans strategically, and Wet Seal is a perfect example of how this is accomplished.  The accompanying diagram shows how Wet Seal is leveraging the Mobile Customer Experience in meeting its business objectives:

• Red: A Smartphone application intended to support sales (demand generation) at the point of sale (POS) and transform shoppers into virtual salespeople by enabling them to share outfit suggestions with friends (via Email).
• Green: Text message marketing actions, presumably used to build an opt in database of mobile customers, using calls to action such as promotions and discounts, advertised in traditional media such as print or billboards.
• Yellow: A mobile optimized web presence, to bring the value of their brand to the mobile device in a manner appropriate for the form factor and intended use by mobile consumers.

Retailers as much as any type of business focus on creating a positive shopping experience, including the layout of stores and product mix.  Many are turning to mobile as a means of connecting with their customers in and outside the store environment as part of loyalty programs and also to extend the relationship beyond the confines of a storefront.

So I was curious to what extent mobile might be represented in an October 2, 2009 Brandweek.com article titled, “Retailers Focus on Customer Service, Personalization.”  I thought the article was a bit alarming due to a seemingly casual attitude about the challenges facing retailers in the current recession; it concludes saying, essentially, that retail success is no longer about designer’s egos and that it’s a business that has to be taken seriously.  Hopefully retail marketers as a whole are out ahead of advice like this, if not, they won’t be working much longer.

Thankfully, there is a positive reference consistent with mobile marketing best practices.  Although mobile isn’t called out specifically, the following quote shows retailers are focused on the right business problem, now they need to start mapping approaches to getting the job done.

“If any good comes out of the recession, it may be retailers’ renewed focus on the customer experience…”

All of these thoughts suggest a tidal wave of business will be flowing into mobile in the coming months, as underscored by this excellent article on MobileMarketer.com today.  Frankly, it’s the best thing I’ve read in two months and I read a lot of mobile news and views every day.  Every marketer, be they in a brand or agency or b-to-b in orientation, needs to read this article and prepare to get out in front of the mobile wave.  If you don’t, your peers in competitive organizations will, leaving you struggling just to keep your head above water.

Consider these forward looking statements from the interview, consistent with our point of view here at Interactive Mediums:

“We want to look at how we take the device in the customer’s hand beyond the mobile marketing paradigm of sending them e-mails and texts to create a true mobile shopping experience.”

“The whole idea is not to say, ‘OK, it’s the Web, only smaller,’ but rather, ‘What’s unique about being real-time in the store?’”

As I have written about here before, the upcoming holiday shopping season will likely be a brutal one, placing an even greater emphasis on clever marketing to drive foot traffic and sales.  This interview reminded me of several recent posts that retail marketers should review as the most important part of their year approaches:

• Simple, yet effective real world example of using mobile to drive sales in a service business.
• For “land locked” retail businesses inside malls, remember to look beyond the immediate environment when developing mobile marketing plans.
• Be sure to use email alongside mobile tactics appropriately; retailers appear to find email less useful than other industries.
• Don’t fixate on any one or group of mobile technologies, but be aware of them and how they can collectively power profit making marketing efforts.

Heretofore, my thought process around mobile couponing as an application involved digital renditions of paper coupons represented on a mobile device, which were then scanned at the point of purchase.  Or, more realistically, some collection of mobile coupons represented on a mobile device that are scanned en masse at check out, since that is how shoppers usually redeem coupons.

The beauty of this new offering, however, is that the shopper redeems their coupons as they would a loyalty card discount – they  supply the cashier with their card and coupons are processed as products are scanned.

Participating shoppers now have a digital coupon account associated with their loyalty card, and this couponing bin serves as a repository for offers accepted by shoppers via interactive media such as online banner ads and mobile messages.

Perhaps the real beauty of this solution is that it offers value to both consumers and their suppliers and marketers.  Consumers save time by no longer clipping coupons, while brand managers receive real time data about coupon redemption and retailers gain equally fast insight into shopper behavior.

This is yet another example of data centric value taking hold in the mobile space.  Brand managers can create and execute coupon programs direct to web and mobile much faster without need for the typical print/distribution cycle, accelerating their test/trial efforts toward developing stronger brands, while retailers stand to gain from increased shopping basket value due to better targeted and more effective coupon programs.

For mobile marketers the lesson is apparent; when crafting a program incorporating the mobile channel, take on the viewpoint of your target customer and how they want to interact with you.