James Crawford, executive director of the Global Retail Executive Council (GREC), argues that mobile retail solutions are transforming the consumer shopping experience and the promise of mobile marketing
Say goodbye to your plastic retail loyalty card. Say goodbye to the mess of paper-based coupons that arrive with your daily newspaper and mail. Say goodbye even to paper money. It is all going into your mobile phone.
While brand marketers and mobile communications carriers wrestle over the business models and per-click pricing strategies around mobile marketing, an entirely new category of service has emerged that promises to reinvent the way consumers interact with products at the store level. Mobile marketing is turning into mobile shopping, and innovative technologists and application developers are conspiring to deliver experiences that are more appealing to shoppers and a better return for marketers.
According to one research report, shoppers make 70% of their buying decisions inside the store. Thus, retailers are looking for solutions that will distinguish their in-store experience from competitors, provide stronger customer service, and increase shopping-basket sizes. The mobile phone is the platform and enabler to achieve this.
One of the strongest lessons from the ecommerce revolution is that push advertising – delivering intrusive brand messaging to consumers via network-based methodologies – is being replaced by pull marketing. The customer is in control and wants access to information and services when and where he or she wants. And no one wants the spam they get in their email inbox to spill over into invasive texts on their phone. So retailers looking to engage shoppers need to offer mobile shopping services, not just mobile marketing.
Here at the Global Retail Executive Council, we have created Mobile Retail Experience. This is a series of demonstrations and business conferences, designed to showcase the myriad of mobile shopping and mobile retail solutions that are exploding into the market. The Mobile Retail Experience launches in 2009 at the CTIA Wireless IT show in October, and continues into five North American cities in 2010. Plans for a European Demo Tour are underway for the third and fourth quarters of 2010.
Properly targeted toward serving shoppers, mobile retailing allows consumers to save time and money with self-service options enhanced with instant product information, specials and rewards. There are literally dozens of technologies that enable these benefits.
Products such as JagTag and MobileTag utilize the camera function on mobile phones to read regular barcodes and even higher-form 2-dimensional barcodes, to immediately access product information, coupons, a loyalty program, and more. To date, there are more than 25 different types of mobile tagging solutions in use in the US and Europe.
Companies such as SampleSaint and BCode replace the old fashioned print and bring model of coupon distribution with easy delivery to the shoppers mobile phone something theyre already carrying with them into the store. Bcode, for example, delivers text message-based incentives and offers to consumers mobile phones that they then redeem at the bCODE in-store terminals. Consumers can receive and redeem coupons, and merchants get additional exposure to their promotional offers.
Samplesaints solution allows consumers to download coupons they want anytime, even while in the store. The coupon is redeemed by allowing the retailer to scan the coupon off the mobile phone screen; no coupons to print, mail and stuff into a pocket or purse. JagTag, Neomedia, MobileTag; these are three of the dozen or so suppliers that turn a mobile phone into a barcode scanner. They promise simple, one-click transactions that deliver quick and inexpensive value to consumers, as well as the brands.
Near Field Communications
Touchatag, a unit of the telecom firm, Alcatel-Lucent, uses Near Field Communications (NFC) to power mobile phones to a new level of interactivity with physical products. Phones that are enabled with Touchatags NFC technology, either embedded in the operating system as with some Nokia models, or added to the phone as a plug-in, are able to read product and advertising information contactlessly.
Just how big is the market for mobile retail? Global estimates are hard to determine, since the category is so new. Some analysts believe that mobile coupons will increase by 30% during the next two years, and will exceed 200 million users globally by the year 2013.
According to another survey, brands expect mobile marketing to become far more effective than traditional direct mail, with 47% expecting between 5% and 15% of recipients to request more information or a sample, and 34% expecting between 5% and 20% of recipients to undertake a financial transaction after receiving a mobile marketing message.
It is this sea change in the way Point-of-Sale promotions (coupons, loyalty, value-added programs) are measured that is perhaps the most important driving force. Brand marketers that utilize paper-based coupons and loyalty rarely get a near-term glimpse of how their promotion performed. With couponing, there is no such thing as real-time advertising analytics, as there is in the online world. With mobile retail, however, comes a change in marketing metrics. With mobile retail, direct response performance can be measured quickly and with extreme detail, down to the individual store, and indeed, the individual.
Loyalty programs too will see improvement. Over the past decade, these have become one of the most powerful marketing tools across a variety of vertical markets. As evidence of their use, the average household is enrolled in over 10 loyalty programs. As the programs have proliferated, it has become more and more challenging for marketers to keep their customers engaged, and to maintain their programs value. Mobile can help in this respect.
Mobile retail applications offer retailers of any size solutions that significantly boost operational efficiencies, loyalty and sales. By offering interactivity and immediacy, from communicating shelf talkers to multimedia end cap promotions, the business of in-store, point-of-sale advertising is about to undergo a transformation that will have to be seen to be believed.