Retailers are gravitating to mobile marketing initiatives including short message service (SMS) marketing, quick response (QR) codes, and applications to boost brand awareness and formulate more personalized shopping experiences. Merchants also have leveraged the “always on” benefits of the web by rolling out mobile storefronts to encourage browsing and buying directly via smartphone.
A vast majority (91%) of retailers indicate they currently have a mobile strategy in place or in development — a 17% boost from 2010, according to the Shop.org and Forrester Research report titled “The State Of Retailing Online 2011: Marketing, Social, and Mobile.” Results also indicate that implemented tactics are thinly distributed; As much as 48% of retailers report having a mobile-optimized web site, while others have focused on releasing apps for iPhone (35%), Android (15%) and iPad (15%). However, many retailers are struggling to finalize a mobile strategy that fits brand image and expectations accurately.
First and foremost, retailers must see mobile as a complementary strategy to existing in-store and online marketing campaigns, according to Gary Schwartz, President, Impact Mobile. “Retailers need to think of mobile as a horizontal media, not another separate vertical,” he said. “In turn, retailers can resuscitate their existing investments to build value. For example, integrating with social-to-mobile (SO-MO) widgets in Facebook can drive social investment into a direct opt-in relationship that retailers can move to high-ROI destinations such as store or cloud checkout.”
The array of techniques and technologies available, such as SMS, QR codes and applications, present forward-thinking retailers with the prime opportunity to create a compelling and memorable shopping experience for consumers across the buying lifecycle. In fact, shoppers are more willing than ever to participate in opt-in programs to receive specials, coupons and behind-the-scenes information.
A majority (75%) of consumers recognize the value in mobile loyalty clubs, while 33% of consumers claim they would be interested in joining mobile loyalty programs for their favorite brands, according to the “2011 Hipcricket Mobile Marketing Survey.” Conversely, only 12% of respondents actively participate in these programs.
Getting Shoppers To “Raise Their Hands” Via SMS
SMS marketing allows retailers to communicate with loyal customers and one-time buyers directly through their mobile inboxes. This initiative also allows merchants to direct shoppers to e-Commerce sites, applications or abandoned shopping carts easily.
Retailers including Victoria’s Secret and Rue LaLa have deployed SMS campaigns, along with mobilized loyalty programs, in an effort to capture consumer information and analyze shopper preferences more efficiently. Marketers then can send relevant and timely offers, coupons and news updates to enhance consumer relationships.
“Until a two-way channel is developed that is ubiquitous across all handsets and carriers, and also ties the retailer into a direct one-to-one relationship, SMS remains the channel of choice,” Schwartz noted. “Social sites such as Twitter are valuable, but it is basically micro-blogging from one source to a large amount of people. QR codes are scan-to-web, but that tactic acts merely as an anonymous click-through.”
Retailers can ensure consumer action by combining SMS messages with personalized URLs (pURLs), Schwartz added. By including links to recommended items or abandoned shopping carts, site visitors are more likely to make their final purchases in the m-Commerce store. Regardless of the potential impact of SMS on conversion rates and click-throughs, few retailers have leveraged the tactic to reach consumers directly through their inboxes, according to research from the e-tailing group.
In an analysis of 200 top retailers, the e-tailing group’s “Annual Merchant Survey” revealed that only 14% of top retailers employ SMS. However, approximately half (46%) of respondents plan to employ text message marketing in the future. Despite retailers’ slow adoption of SMS marketing, implementing this instant communication can keep brands top-of-mind and have a significant impact on customer engagement, according to a 5th Finger report titled “6 Things You Need To Know About Mobile To Get Ready For The New Year.”
“SMS is the flexible intermediary — an SMS can deliver a jump off to a mobile web page, a phone call or the beginning of a two-way brand relationship,” the report explained. “Texts can successfully drive consumers in-store so long as they are relevant and offer an incentive. While mobile applications are engaging and banner ads can help drive site traffic, permission-based SMS messaging remains a viable way to drive consumers in-store.”
Retailers can increase relationships with consumers and boost purchase rates by tying SMS initiatives to the m-Commerce site and applications. Best-in-class retailers particularly have excelled in developing engaging applications that contain key features such as store locators, high-definition images of full product assortments and in-depth item information. In turn, shoppers can interact on mobile apps in-store and at home to make educated buying decisions.
Leveraging Mobile Applications To Boost Engagement
Innovative retailers have released mobile applications for the Android and iPhone to create a shopping experience that is seamless and media rich. For example, Target incorporated sharing capabilities in its mobile app to allow shoppers to send items to friends and family via email and text message. However, Sephora particularly has excelled in connecting multiple interactive touch points and multimedia elements to add value to the app experience.
To optimize word-of-mouth, sharing and communication among shoppers, the Sephora apps feature mobile offers, videos, ratings and reviews, and a beauty advice column. The apps also include barcode scanners, access to the beauty retailer’s entire inventory and a list of high-demand items. This array of features and capabilities provides shoppers throughout the buying lifecycle with optimal incentives to visit and interact with the brand.
“M-Commerce sites and apps play different roles,” noted Lisa Schwartz, Junior Analyst for the e-tailing group. “Applications must have a significant value to the shopper. For example, if Recreational Equipment Incorporated has a snow report app or if Rue La La has an app for shoppers who want to continually check in to make purchases, both can be very helpful to shoppers. But though these ventures make sense, it is not realistic to get consumers to pay attention to all apps.”
Entertainment value is important for an engaging application, but retailers must focus on core capabilities that create a seamless browsing and buying experience, according to Schwartz of Impact Mobile. If navigating through an app becomes a daunting, convoluted task, consumers will turn away. “Retailers may have an application that is not forgotten on consumers’ phonetops, but it is vital to remember that the business is selling a product, not an app download,” he noted. “In the end, shoppers want quick access to relevant content and an optimized checkout for the small screen.”
Retailers also must note the continual penetration of mobile apps. In fact, the number of app downloads worldwide will grow at a compound annual growth rate of approximately 57% between 2010 and 2015, according to findings from the Berg Insight “The Mobile Application Market” report. Moreover, results from the Oracle survey titled “Opportunity Calling: The Future of Mobile Communications — Take 2” revealed that more than half (55%) of consumers have downloaded a free app, versus 42% in 2010.
While applications are the evident stars of the mobile movement, David Dorf, Senior Director of Technology Strategy for Oracle Retail, told Retail TouchPoints that retailers should look to other methods that are more timeless and efficient.
“I think apps are temporary,” Dorf noted. “The rich, multimedia experience with applications is great and that’s why consumers use them. But from a retailer perspective it’s a pain to provide that on different platforms, such as Apple iOS, Android and Windows. I think in the long-term, HTML5 will be the top resource because it allows retailers to create an application that works across all platforms. It provides that rich experience right from the browser.” Dorf advises that retailers utilize SMS to gain shopper attention and send digital coupons, and release an app as a vehicle to deliver more in-depth content.
QR codes are another marketing initiative to drive consumer action in-store and at home. By scanning a code on advertisements and signage, shoppers can obtain product information, view item reviews and recommendations, and retrieve special coupons and offers.
QR Codes, Geo-Fencing Encourage In-Store Engagement
Retailers including The Home Depot, Crate and Barrel, Best Buy, Cabela’s and Macy’s offer QR codes to educate consumers with detailed product information and encourage brand interaction. For example:
· The Home Depot implements QR codes as a cost-effective alternative to in-store signage;
· Crate and Barrel printed scannable codes on the back of catalogues to allow shoppers to allow easy sweepstakes sign-up;
· Best Buy and Cabela’s feature QR codes in-store to allow shoppers to learn more about products they’re considering; and
· Macy’s successfully rolled out its Backstage Pass campaign, which allows shoppers to scan in-store signage to receive behind-the-scenes videos from top industry figures such as Martha Stewart and Jessica Simpson.
By offering in-depth information via codes that are accessed easily, retailers can further purchase likelihood and increase overall brand trust, according to Joy Liuzzo, VP and Director of InsightExpress.
“We know that consumers are flowing between mobile and online, so acknowledging that by using mobile to recruit for email newsletters is a smart strategy,” Liuzzo noted in recent Retail TouchPoints coverage. However, Liuzzo cautioned that since most QR code initiatives take multiple steps to repeat, retailers must provide memorable, valuable offers that encourage shoppers to participate.
“My biggest hesitation with QR codes currently is that it is a four- to five-step process to get to the end goal,” Liuzzo explained. “Download the app, open the app, scan the QR code, get the content and interact with the content. QR codes have potential but most campaigns still make consumers jump through too many hoops to get to something that isn’t that great in the end. Making the end goal less gimmicky and more relevant will go a long way in demonstrating the value to consumers.”
Geo-location tactics also can contribute to increasing in-store traffic, especially with consumers’ growing confidence in sharing their locations with outside sources. In fact, 45% of consumers voluntarily provided their locations to apps, up from 33% in 2010, according to the Oracle survey.
While location-based apps such as shopkick and foursquare drive purchases by promising coupons and discounts, push notifications sent via geo-fencing are more efficient. “Geo-fencing allows retailers to draw perimeters so they can send text messages to anyone that comes within a certain area of the store,” explained Dorf. “It’s a lot more exact [than check-in apps] to ensure that shoppers really are within a certain area of a store or around competitor stores.”
By implementing mobile marketing strategies, retailers can empower shoppers to research, browse inventory and obtain in-depth information via mobile devices, according to Liuzzo. Teamed with a strong m-Commerce initiative, retailers will provide consumers with the resources to make an educated buying decision.
“Consumers don’t have to rely on salespeople as much anymore,” Liuzzo said. “They have the ability to get all the information they want in the palm of their hands. Overall, consumers also are more educated and can be influenced more easily by outside information while they are in store locations.”
Part II of the Mobility Report will be published in the November 17 Retail TouchPoints newsletter.