Retail TouchPoints: Mobile Retailing Dissected At NRFtech Panel Discussion

Discussion
Aug 17, 2009

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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Ryan Mathews
Guest
8 years 3 months ago

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.

Ralph Jacobson
Guest
8 years 3 months ago

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.

Max Goldberg
Guest
8 years 3 months ago

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.

Amon Munyaneza
Guest
Amon Munyaneza
8 years 3 months ago

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.

Doug Stephens
Guest
Doug Stephens
8 years 3 months ago

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.

Mark Johnson
Guest
Mark Johnson
8 years 3 months ago

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.

Robert Heiblim
Guest
Robert Heiblim
8 years 3 months ago

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.

Matt Volpi
Guest
Matt Volpi
8 years 3 months ago
Mobile for now is still best suited for driving awareness–a way to connect to retailer or brand customers and let them know about promotions, maybe even to opt into a “club” or program, but executing promotion redemption is where the rubber meets the road. Pure mobile plays are not well-suited to make an impact in retail–innovation should be driven by the companies already working within the retailer ecosystem, integrating with POS and CRM systems, etc. These folks are best suited for the “last mile,” which in this case is linking a targeted promotion with a specific customer and getting them the discount when they checkout and dealing with the operational/IT side of the retailer house. Holding up your phone to the cashier is not a scalable solution, and phone tech hasn’t evolved (and may never) to make phone screens readable by a standard self-checkout system. At Modiv, we’ve straddled the promise (targeted promotions on consumer-owned devices and automatic redemption) with reality (most grocery shoppers can barely send a text message) by using a dedicated in-store… Read more »
John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
8 years 3 months ago
This is a very exciting topic and one that Retailers and CPG manufacturers should be adding to their priority list for Q1 2010 if they have not started already. I am confident that major initiatives will be in place in less than 2 years. If executives wait until the end of 2010, they will certainly be behind the curve on this one. Opportunities:1) Coupons – Obvious, easy and being done todayOther initiatives that could provide significant value2) Retailer loyalty programs3) Retailer Private label initiatives4) A Catalina approach – Scan one item in store with your phone and get an offer for another before purchasing5) Supply chain technology6) iPhone apps The key to getting the most from mobile technology is not making it just another advertising vehicle. Consumers will not appreciate or value this approach. If it is not a compelling offer for the consumer, don’t bother. In return consumers will need to move quickly on offers since mobile technology expects quick responses. This will allow retailers and CPG manufacturers to easily monitor and modify offers… Read more »
Roger Saunders
Guest
8 years 3 months ago
Two hurdles have to be overcome in order to make mobile the rich vein that Retail Marketers want to capitalize upon: 1. Technology – Apps have to be allowed to be put into play in the U.S. in a manner similar to that seen in Europe and Asia. The technology isn’t complex, as it’s already in place. It’s the “vested interests” of the large cellular companies that are holding it back at this point. 2. Retailers will have to learn to offer consumers clear value and a reason to make use of mobile devises, and have a reason to accept Marketing messages; the U.S. Consumer is not ready to take on this role yet, given the technology that they have on their devises. Some comparative figures from the June, 2009 Simultaneous Media Usage Survey (SIMM) and the “China Quarterly” (two ongoing quanitative surveys of BIGresearch) of interest between U.S. and China Consumers tells a bit of a story about the hurdles. The cell companies have the technology. They want to be paid for its use… Read more »
Brian Kelly
Guest
8 years 3 months ago

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.

Dave Carlson
Guest
8 years 3 months ago

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.

Jeff Weidauer
Guest
Jeff Weidauer
8 years 3 months ago
The big challenges in making mobile into a viable tool are a) making the communication relevant, and b) not getting caught up in technology for its own sake. Right now coupons are the hot ticket, but putting last century’s promotional tool onto this century’s medium of choice isn’t really making the most of the opportunity. It won’t grow loyalty or drive shopper engagement over the long run. The opportunity is to utilize mobile in a way that provides value to shoppers, differentiates the retailer, and makes the most of the medium. This is more than coupons, or promotional offers. Few people leave the house without a cell phone today, and that’s quickly converting to smartphones with greater capabilities. How valuable is it to a retailer to have their brand on that phone, tied to an application that provides real value to shoppers in terms of meal planning, dietary needs, and other added value that goes beyond coupons or TPRs? Until we stop thinking about how to use technology as just another place to put an… Read more »
Herb Sorensen
Guest
8 years 3 months ago

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.

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