Retail TouchPoints: Mobile Retailing Dissected At NRFtech Panel Discussion


By Debbie Hauss
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.
Among the topics debated during a panel around mobile retailing at the NRFtech Annual CIO Summit were business challenges, strategies for deployment, technology obstacles, industry standards and timeline for widespread implementation. While members took different positions on a number of issues, most agreed that the widespread use of mobile technology is inevitable and will likely become part of everyday business in U.S. retail within the next 2-5 years.
"We are early in the process of implementing mobile technology," said Delaney Bellinger, CIO of Yum! Brands. "Customer acceptance and adoption will be the biggest obstacles but I expect to see widespread adoption within three years." Currently Yum! is beta-testing text ordering at its Pizza Hut restaurant chain.
To date, some of the most effective mobile promotions have been targeted at a young high-school- and college-age demographic. Mobibucks offered the teens the opportunity to "Text yourself a $2 coupon" for a local business, a promotion that received an immediate response from the majority of target consumers. Then the promotion received a second lift when the students received the offer for an additional $2 coupon if they sent the promotion offer to five friends.
"If your customer base is the younger generation, then your time is today for adopting mobile solutions," said Jorge Fernandes, CEO of Mobibucks.
When retailers begin to look at the potential for mobile technology, Richard Crone, Principal of Crone Consulting, suggests they focus on three primary business opportunities:
1. Self-Service – Mobile technology can enhance retailers’ ability to provide self-service purchasing for consumers.
2. Payment Optimization – Retailers will benefit by facilitating mobile use of private label credit cards, pre-paid debit cards, and/or ACH tied to a loyalty program.
3. Marketing – By offering opt-in mobile delivery of promotions and product and service information, retailers will build a more effective database of loyal customers.
Once an enrollment strategy is in place, retailers must determine a promotion plan. Both voice and text promotions show promise, according to Mr. Crone. "Voice can be an effective combined channel enabler," he explains. Because at least 40 percent of consumers who walk into a store are already engaged with their cell phones, they are likely to respond to signage that asks them to dial a certain number to hear today’s specials.
Additionally, because response to text messages is exponentially faster than response to emails, mobile promotion shows great potential. Mr. Crone notes that the average opening time for a text message is 1-5 minutes versus 1-2 days for an email; and the average response time is five minutes for a text compared to 24 hours for an email.
Discussion Questions: What’s turning into the early challenges for retailers looking to capitalize on mobile technology? How should retailers be preparing themselves now for broader mobile access in the future?
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14 Comments on "Retail TouchPoints: Mobile Retailing Dissected At NRFtech Panel Discussion"
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App clutter seems the largest challenge. Everyone appears to have an app for everything. Breaking through the noise associated with the smartphone revolution requires very careful targeting and marketing. Without it, we’ll all be looking for that app management app.
There are actually fewer challenges than expected at this point in the game. It’s a matter of just jumping into it. We have found a great opt-in rate for mobile marketing promos, and consumers seem to be very willing to give their mobile numbers to their favorite brands. That’s the biggest challenge, by the way – how do you become one of the favorite brands? Offering promos of perceived value is a start. Make the promos at the frequency of the subscribers’ tastes. Yes, that means variability. Add insightful messages, along with promos to increase the long-term value of your messages.
Encourage consumers to become Facebook Fans, follow you on Twitter, or join whatever social media outlet is next.
Mobile marketing still faces huge consumer acceptance hurdles. Advertisers need to offer promotions of significant value to consumers or underwrite a portion of their mobile phone bills before consumers will be willing to accept mobile advertising. Advertisers also need to show some restraint. Consumers need to be able to opt in, rather than having ads pushed to their mobile phones. I think it will be more than 3 years until mobile marketing comes of age.
Mobile payments/promotions, just like any other form of payment/promotion, are but just a means to an end. The most appealing part about them is running the innovation on something that everyone rarely leaves at home – the cellphone. The challenge now is, who is going to be the leader in this field? As with any technology, there are so many entrants and I believe the market will winnow out the one-legged and sustain the strong.
The challenge for some will be in the recognition that if their customers don’t love them, mobile convergence won’t help. I can’t think of a single instance of technology resurrecting a lousy brand. Some brands, like Lulu Lemon, are a natural for the medium because the customer already loves and wants to be close with their brand.
The second challenge is to look at mobile as more than simply sending promotional offers via text message. The platform can include so much more and should really be viewed as a tool that’s integrated into the entire shopping experience. Smart retailers will step back and look at the technology holistically.
I would agree that app challenge is the biggest issue. We are seeing a barrage of companies coming to us looking to build the next big killer application (mostly all iPhone), but not many have done the research needed to make sure it is going to be effective.
Also, there is the challenge of channel noise. How many times can you touch a person before they just withdraw? The last place I want offers coming to me is my mobile phone. I may be somewhat old-school, but I’m a loyalty nut. I want to makes sure the offers that I receive are relevant, timely and targeted, but this may not always be the case with mobile.
There is also going to be huge consolidation in this market, as the number of VC-funded players will have to “right-size” consolidate to make the scale and opportunity consistent.
Mobile marketing is already here, and already has many challenges, just a few of which other posters have mentioned. Regardless of “feelings,” this medium is only going to grow as this fourth screen takes more contact and content time. While some demographics will take time and perhaps not move in quantity, many of the most desirable are already moving there. Those that do not embrace this face marginalization.
Shopper data base challenges, how to get to a single view.
Deja vu all over again.
Feels like the beginning of the internet phase, whenever your retailer took the leap.
What worked and what didn’t back then? Institutionally, technologically, culturally. Sort it out across the enterprise and quickly develop a point of view plus a customer centric plan for activation with metrics. Do the work now.
Don’t go at this half-cocked, be ready to move because the behavioral shifts are coming even quicker than the internet. How many folks do you know that dropped their land lines?
And remember, retail ain’t for sissies.
Customer-owned mobile devices, phones in particular, will become a pervasive touch point for retailers. The ability to securely identify, interact, suggest, compare and accept payment at any and every location as guarantees it. Low capex won’t hurt either. Mobile devices are one of several touch points that will deliver convenience and utility at home, on the way and throughout the store.
We believe that two principles will determine shopper engagement and satisfaction with these devices:
1. Content relevancy – Whether it be an ad, an offer, nutritional guidance, health advice or a reminder, the content must be based on the best available knowledge of the customer’s interests.
2. Integration – Each touch point, including mobile, has idiosyncrasies of form, function and time of use. With appropriate considerations for these factors, ALL touch points should deliver content from a common source, ensuring consistency for the customer and harmony with the retailer’s marketing and merchandising strategies.
A lot of the discussion here has focused on the retailers using mobile computing, mostly to attract shoppers to their stores. However, I believe that once the technology becomes ubiquitous, and shopper owned and controlled, this will become a powerful force in tilting the balance of power back to the brands.
The window for retailers to dominate their brand suppliers will begin to close as brands are able to leverage their own mobile computing solutions, focusing on their own products, across ALL retailers.
The weakening power of mass communication will further surrender to narrow-casting, with brands returned to their strategic advantage of 50 years ago. However, cutting edge retailers will stay in this game, further squeezing the laggards.