MOBILE MARKETING
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Embracing the Six Elements of Mobile Convergence
With the market penetration of smartphones skyrocketing, along with their
capabilities, marketers need to determine how to best use mobile technology
to boost sales and improve consumer relationships.
According to Pew Internet, smartphone ownership among U.S. adults has eclipsed regular phones, reaching 46% by February 2012. Smartphone ownership is growing by 50% year over year. In the last five years, smartphones have seen a 12x growth, ComScore Data Mine reports.
“For the first time in 2011, smartphones and tablets had higher unit shipments than desktops and laptops,” says Ben Sprecher, Founder and VP of Marketing, Incentive Targeting, Cambridge, Mass. Sprecher was a presenter at the recent LEAD Marketing Conference.
People are spending more time using mobile apps than they do online both on their computer and on their smartphone’s web browser. Forty-four percent of consumers use a mobile device in-store, according to GroupM Next, and the number of apps to accommodate this activity is growing rapidly. Consumer behavior is changing to make the smartphone device the core of their daily lives.
Food marketers are already taking advantage of these trends. For example, Bozzuto’s, a wholesale distributor of food and household products based in Cheshire, Conn., has seen its retailer customers experience strong sales increases from reaching out to their consumers via mobile devices, says Steve Methvin, vice president, retail technology and E-commerce. Methvin co-presented with Sprecher in the LEAD Marketing Conference session.
Most of Bozzuto’s retailers that have embraced mobile have seen a 10% increase in sales. In addition, the analytics from mobile are real-time, and they help Bozzuto’s make quick decisions. Although planning in the retail supermarket business begins nine weeks in advance, bad weather can have more impact than all the planning. “So having the ability to interact with your customer through a mobile device helps you to not only act like you knew it was going to snow 12 inches that day, but you are prepared with the right products,” Methvin says.
Sprecher adds: “Mobile in general and smartphones in particular are a tidal wave change affecting us all, and the companies that win in the future are the ones who will best figure out how to integrate many different disciplines and practices into that single platform.”
This is “the great mobile convergence” of content, loyalty, analytics, marketing, payments and social, or as Sprecher calls it: CLAMPS.
Prior to CLAMPS, there were two other levels to this convergence. First there was technology convergence within the devices that now combine a telephone, a GPS with updated maps and navigation, compass, accelerometer, camera, bar code scanner, video camera, voice recorder and a high-resolution screen. It’s an entertainment device capable of playing or recording electronic media, and a megaphone by virtue of allowing users to instantly access social media, like Facebook and Twitter.
Then there was an information convergence, with the smartphone connecting many different areas of a person's life. It is connected to a user's identity, their location, and various other online and offline activities. And, if a user connects an app to a retailer's loyalty program, it can in theory link to purchases.
This leads to the third level, which is a functional convergence — the great convergence — or CLAMPS. The six elements of the acronym are:
Content is information that a consumer finds valuable. This could come from a retailer or a brand. It could be product information, such as recipes or how-to videos; user-generated content, like ratings or reviews; or self-generated content, like a shopping list. It also includes shopping tools for price comparison, inventory, product locators and store maps.
Loyalty is defined as tracking, rewarding and incenting the continuing relationship with a consumer. In tracking the consumer, it can replace key tags with retailer apps, and consolidate accounts with apps like CardStar and Google Wallet. Rewarding the consumer can include electronic “punch cards,” points or miles, savings, gas rebates, sweepstakes, or other perks. Incenting the shopper includes apps to drive store visits, store check-ins, to scan QR codes, and to share shopping experiences on social media.
Analytics involves recording, measuring, analyzing, and acting on retail and consumer data. Most important is action. It’s not enough to create sophisticated dashboards or analytics, but not change the way the shoppers are engaged. That is “just generating heat in a data center,” Sprecher says. His advice, if you are considering building analytics that aren’t actionable: “Don’t do it. If you want to know what is going on in your stores, do something about it.”
Marketing is communicating with a consumer for the purpose of driving sales. The many capabilities of a smartphone enable innovative marketing activities, coupons, and offers. For example, the GPS allows for “geo-fencing,” where if the consumer is using the phone within a certain distance from a store, they could receive an ad for the store. When it comes to promotions, people like to get coupons, deals and circulars as long as they find them relevant. They don’t appreciate it if a store’s circular has just been replicated for a small mobile screen. It also allows greater personalization of two-way messages. Marketers need to treat it as a way to communicate with people. This will also improve the efficiency of reaching this audience as cost-per-impression moves to cost-per-click, and ultimately to cost-per-action. “You only pay when the message you have shown to the consumer actually drives a purchase.”
Payment is defined as transferring money from the consumer to the merchant or vendor. Payment is a very big, very complicated area that is growing very fast. The worldwide market for mobile payments will grow to $633.4 billion by 2014, up from $68.7 billion in 2009, according to Generator Research. This is not simply about using a mobile device as a POS terminal, but rather as a payment vehicle, using technologies like near field communication (NFC), Google Wallet, and PayPass. New technologies like Pay with Square and PayPal Local allow shoppers to walk into a store, pick up what they need, identify themselves at the checkout, and be done. They can also stay permanently checked in, “and it is almost like they know you. They recognize your face from the picture on their POS, and they take your money digitally without you ever touching anything,” Sprecher says.
Social involves connecting and sharing the retail experience between consumers. This can include the seeking and sharing of advice, celebrating purchases like the “haul videos” now appearing on YouTube, checking in, games like leaderboards and treasure hunts, and fans/followers as on Facebook and Twitter.
In applying CLAMPS, marketers need to consider how to use it to improve the shopping experience. It must be relevant, but also discreet about what is presented while leveraging data about people’s interests.
Finally, the mobile activity has to be measurable in terms of accomplishments, sales or interactions, and these should be determined in advance. “Hold yourself to those benchmarks so you can tell whether the program is working, or is just a lot of fun. All this stuff is fun, but it is also expensive, so do it right,” Sprecher concludes.
The above article was abstracted from a presentation in October 2012 by Ben Sprecher, Founder and
VP of Marketing for Incentive Targeting, Cambridge, Mass. The views he expressed were his own.
In November 2012, Incentive Targeting was acquired by Google, based in Mountain View, Calif.
More information can be obtained at www.incentivetargeting.com. Steve Methvin, vice president, retail technology and E-commerce at Bozzuto’s, co-presented with Sprecher. Bozzuto’s is a wholesale distributor of food and household products based in Cheshire, Conn., and more information can be obtained at www.bozzutos.com. The presentation took place at the recent LEAD Marketing Conference in Chicago. LEAD, produced by the Shopper Technology Institute, stands for Loyalty, Engagement, Analytics and Digital.
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