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[18 comments]

Mobile Promotions Trump Brand Loyalty

March 26, 2012

According to a survey investigating the behavior of smartphone owners in grocery and drug stores, nearly 75 percent of consumers would switch brands if offered real-time mobile promotions delivered to their phones while shopping in a store aisle.

Of the least brand conscious group, 25 to 34 year-olds, 82 percent were willing to switch brands if they received a mobile offer for a competing product while in the store.

The survey of 1027 grocery and drug store shoppers with smartphones came from AisleBuyer, a provider of mobile self-checkout services. Other findings:

  • Eighty-one percent of respondents go to grocery and drug stores prepared with a list of items to buy, although only eight percent list specific brands to purchase;
  • Ninety-percent of 25-34 year-old smartphone owners expressed interest in receiving instant offers for the things they were already shopping for through a mobile shopping app;
  • When they are in a grocery or drug store aisle, the most important purchasing decision driver is price/everyday low value (noted by 76 percent of respondents); promotions/getting the most for their money (58 percent); coupon availability (51 percent); brand loyalty (38 percent); generic or store brand availability (26 percent); and new products from existing or emerging brands (22 percent).

AisleBuyer, not unsurprisingly, concludes that traditional in-store shopper marketing tactics such as end-cap displays, dump bins and sampling programs will have to be adapted for the new mobile shopper.

"Given that a majority of shoppers enter stores with only rough shopping lists, they are incredibly impressionable when they are in the aisle," said Andrew Paradise, AisleBuyer's CEO, in a statement. "As brand marketers look for new ways to feature their products when shoppers are considering the competition, they should look no further than something consumers already have in hand — their smartphones."

Discussion Questions:

Discussion Questions: How would you rate the potential of in-store mobile promotions to motivate consumers to switch brands? How do you think mobile promotions will affect traditional in-store shopper marketing tactics such as end-cap displays, shippers, sampling, etc.?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

What's the likelihood that mobile promotions will dramatically change the in-store purchasing decision process?

Comments:

From Wikipedia regarding impulse buy: "A study published in the June 2008 issue of the Journal of Consumer Research suggests that consumers are more susceptible to making impulsive purchases for one brand over another if they are distracted while shopping." Mobile promotion takes advantage of a time/space/context and the mobile phone itself can alert and distract the consumer while shopping.

While I believe this is probably a very effective marketing technique, I'm concerned about multiple brands competing with a consumer though their mobile phone, causing confusion.

Ed Dunn, Founder, (Stealth Operation)

How many consumers really want their smartphones to be constantly ringing with promotional offers as they walk through a grocery or drug store? Consumers do want to save money and appreciate promotional offers, and smartphones do offer an interesting promotional channel, but they are not the promotional panacea. They are part of a coordinated marketing effort that includes end-caps, in-store signage and sampling.

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Max Goldberg, President, Max Goldberg & Associates

Steve Jobs and his team didn't invent the iPhone to be the always on Val-Pak in your pocket. As RW BrainTrustee Ben Sprecher and I debated, the more offers are loaded into the phone, it only takes one annoying marketer to overstep their bounds to make the whole thing a turn off.

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Bob Phibbs, President/CEO, The Retail Doctor

In store mobile promotion is the 'last mile' of the sales cycle and delivering information at the point of purchase decision.

I can envision an interactive end cap a la the movie "Minority Report" where technology can identify the customer at the endcap and serve up relevant information/promotions based on predicative analytics on data captured from previous shopping trips.

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

The alarm bell for marketers here is not that they need to be using mobile promotion.

The message they should heed is -- your brand value and loyalty continue to decline at a perilous rate.

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Ben Ball, Senior Vice President, Dechert-Hampe

Essential. If retailers aren't conceiving of a plan in this space and/or testing today, they are missing a huge opportunity to learn at minimum and lost sales as a result. Clients at all levels of sophistication are asking questions or in need of strategic plans to support this channel for dialogue and transaction processing.

David Slavick, Director, Loyalty & Retention, FTD.com

I don't know who took this poll, but I find it hard to believe, like others here, that consumers want to be constantly buzzed with in-store promos while walking the aisles. Promos do not build loyalty! Rewarding your best customers does! It might be a nice incentive to try something new, but if only diff is price, then consumer will not come back again.

Rick Boretsky, Retail Data Integration Specialist, RIBA Retail (www.ribaretail.com)

When the consumer starts to use context-specific apps while shopping, it could have a major impact. Currently there are not very many apps that are context specific.

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Joe Nassour, Chief Technology Officer, RetailTactics

Ben has it right. If over 80% of the consumers would switch for a better deal, you're in trouble.

As a consumer I just don't want to work that hard. Give me the best deal on the shelf and I'll make my decision. I can't hold all of the items I'm buying in my arms and use my smartphone!

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Doug Fleener, President and Managing Partner, Dynamic Experiences Group

Consumers are unlikely to want to clutter their smartphones with apps from different brands. They are likely to respond to well designed mobile programs offered by stores that they shop every week, such as Safeway's "Just For U" which was discussed here last week. So the answer for brands is to take mobile seriously, but work through the channel to execute.

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Martin Mehalchin, Partner, Lenati, LLC

It is all about demographics. "Of the least brand conscious group, 25 to 34 year-olds, 82 percent were willing to switch brands if they received a mobile offer for a competing product while in the store."

Traditional tools are out the window. Mobile will work as long as the the receivers can control the message, which they can. It will not be a machine gun of messages as the they walk through the store. It will be controlled and self selected.

The mobile device is not a substitute for broadcast television. Marketers, start thinking differently and soon.

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Gene Detroyer, Professor, Independent

I agree with the gist of all the comments. If the consumer is not loyal to a brand then it all comes down to deals, no matter how you tell them about it. And of course, each consumer has their own preference in this. The real question is, what makes a consumer loyal to a brand no matter what?

Lee Kent, Let's meet share and succeed in Retail, YourRetailAuthority

I don't agree that the increased use and acceptance of mobile phones will replace traditional in-store marketing programs like end-cap displays. Having worked for years on in-store programs with several major retailers, the end-cap drives volume sales better than most in-store programs (I say "most" because there may be some retail examples out there that I am not personally familiar with that perform better than end-caps). Mobile coupons and apps will become more accepted as younger shoppers begin to do the primary household shopping.

Outpace the value of an end-cap display in store over the next 10 years? Hard to believe.

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

So, since we're talking specifically grocery here, I'll say brand loyalty is at its lowest in this product segment. Apparel, and other high-value products command far greater loyalty. So, if you catch a shopper with a timely promotion while they are in the store, I do believe the vast majority would switch brands to take advantage of the promotion. This is a great thing for all retail segments to try, however. Although there may be more loyalty in other, non-food segments, people are looking for value in all product categories, and switching is likely elsewhere, beyond food.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

"A provider of mobile self-checkout services" does a "SURVEY" to learn about in-store BEHAVIOR? And finds that "mobile self-checkout services" can have a major impact on brand loyalty? Hundreds of millions of dollars are being flushed down the tube over just this kind of "techie" thinking about how shoppers shop in stores.

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

In response to a study reporting that "nearly 75 percent of consumers would switch brands if offered real-time mobile promotions," that makes it sound like brand loyalty is dead, two points:
1) Many consumers have a collection of several brands that they buy "loyally" in a given category. It shouldn't be surprising that they would buy the one from their favored array of brands that's on sale this week.
2) How was the question worded? Would consumers switch on 75% of the items they purchase, or would 75% of consumers switch in one or more of the categories that they buy? It's likely that brand loyalty is much higher for some categories than others.

Doug Pruden, Principal, CustomerExperiencePartners.com

So, since we're talking specifically grocery here, I'll say brand loyalty is at its lowest in this product segment. Apparel and other high-value products command far greater loyalty. So, if you catch a shopper with a timely promotion while they are in the store, I do believe the vast majority would switch brands to take advantage of the promotion. This is a great thing for all retail segments to try, however. Although there may be more loyalty in other, non-food segments, people are looking for value in all product categories, and switching is likely elsewhere, beyond food.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

In-store mobile is essential but what makes it effective is how poor so many marketers are at connecting with customers away from the store. There is a direct correlation between customer vulnerability and the absence of a customer relationship. Transactional loyalty is, in many categories, not loyalty at all.

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Phil Rubin, CEO, rDialogue

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