The mobile phone is quickly emerging as a new sales channel, with mainstream department stores JC Penney and Macy’s adopting new mobile initiatives with high expectations. Other consumer brands are enjoying strong opt-in rates among customers, reaffirming the industry assumptions that mobile is the next big channel to infiltrate consumers.
JC Penney’s new mobile trial, a first for the industry, is designed to enable shoppers to redeem coupon savings via the mobile device with a 2D bar code coupon program, directly from the screen at the point of sale. The retail giant tapped Cellfire to deploy the technology at registers in 16 JC Penney stores in the Houston metro area.
“This just gives us one more channel for the customer to take advantage of,” says Dave Owen, Development Director for Emerging Digital Media at JC Penney. “It is a conversion expense to move from a traditional laser at POS to an image scanner of this sort, so that’s why we built the trial, to give us an opportunity to see what the consumer adoption is…By taking a single market, like we did in Houston, we can concentrate on marketing and work with our store managers and associates in that market, and get a sense of the customer’s acceptance and where she is in the adoption curve.”
The program is also integrated with the JCP Rewards program, with which customers can earn a $10 shopping coupon on the mobile phone. Owen says the company strives to add value with the convenience factor, enabling shoppers to always have coupons readily available on their mobile devices.
Earlier this month, JC Penney launched an iPhone app, JC Penney Weekly Deals, which is designed to offer customers to browse sale items and created shopping lists.
“We’ve been very convinced from everything that we’ve read and researched that the consumer is going to end up [utilizing the mobile channel], and I think that’s what everyone is confident about,” Owen says. “We wanted to make sure that we take advantage of this near term to find out what are the economics and consumer adoption behind it.”
Macy’s CEO Terry Lundgren also has high hopes for the mobile channel. He announced Macy’s plans to launch a mobile commerce application by the end of this year during his keynote speech at last week’s Shop.org Annual Summit. Lundgren said the application will be one of the most advanced offered by any retailer, and the company anticipates mobile commerce sales to grow “exponentially” within the next three years.
The mobile channel has been a big draw for luxury brands as well, as retailers utilizing the new channel to connect with consumers and foster positive brand relationships. Focused on driving foot traffic to its new concept store in California, Tiffany & Co. targeted female customers on smartphones to showcases its new collection. Chanel’s recent mobile effort, the Ready-to-Wear Cruise 2009-2010 application, enables users to watch the Chanel fashion show directly on the phone, as well as news about the brand and a boutique locator.
Consumers Catch On
The demand for mobile has become clear in the quick service restaurant sector. Pizza Hut enjoyed more than 2,000 opt-ins in its first two weeks after launching a mobile campaign to promote its new Hershey Dunkers desert. 54% moved on to double opt-in, according to Mobile Marketer.
Coffee giant Starbucks has also brought mobile capabilities to life and the POS. The company’s new trial of a 2D bar code payment system is designed to enable customers to pay via the iPhone or iPod touch. The Starbucks Card Mobile application is testing in 16 retail locations in Seattle and California.
Earlier this summer, fast food chain Popeye’s mobile coupon campaign promoting a three-piece chicken dinner achieved a 54% double opt-in. Consumers that texted in received a message that said, “Show this msg at Popeye’s Chicken & get a FREE 2PC DINNER with ur purchase of a 3 pc dinner & medium drink. Hurry into Popeye’s TODAY offer ends 7/31/09.” Then consumers were asked whether they would like to join to receive future communications from Popeye’s.
The metrics around transactional mobile offers have indicated that consumers are ready to adopt the channel as a new medium, which leaves the door wide open for coupons and commerce.