Texting for Shoppers
By Bernice Hurst, Managing Director, Fine Food Network
Once upon a time, the competitive advantage of small shops was personal service. Then along came technology and supermarkets started getting more ‘personal.’ Using emails, phone calls, regular mail, special shopping nights and anything else they could think of, larger retailers began flooding their best customers with tailored offers that would prove irresistibly tempting. In an effort to fight back, though, corner shops in England are now trying to re-claim their turf.
The London Times reports that a mobile phone-based loyalty scheme called Shop Scan Save will soon be launched across 17,000 local grocers. Under the campaign, special offers are sent to mobile phones as barcodes that can be scanned from handset displays. Some 400 categories, including coffee, diapers, soft drinks and confectionery from the likes of Unilever, Procter & Gamble, Nestle and Mars, have already signed up.
Details of purchases will be stored and used to personalize future offers, setting in motion a virtuous circle of sales and promotions. Customers will also be able to request special offers as they are on their way to the store. For example, a shopper texting ‘BBQ’ could be sent offers, within 30 seconds, for beer, sausages and salads.
The Light Company, which will be managing the data for brand owners, will take a fee from them. Consumers will be charged for sending messages by their cell phone service, but not for receiving offers. The Light Company is already talking to chains in the U.S. and Australia.
Part of the drive behind the program is enabling smaller stores to tap into the success of loyalty programs run by larger retailers, such as Tesco’s Clubcard. The hope is also to find another traffic driver beyond coupons, which are perceived as “tacky” by many British residents and used by fewer people in the U.K. than in America. In particular, this cell phone approach is designed to extend the demographic reach, especially to younger men who love their hi-tech toys.
Discussion Questions: What do you think of the opportunity of text-message driven customer loyalty programs for independent retailers? Will sending targeted offers encourage shoppers to buy more than they might have planned? Will it promote loyalty?
[Author’s Commentary] The New York Times recently published a piece raising questions about using mobile phones to solicit donations to charity. Added to problems that users have had with unexpectedly high charges and unwanted subscriptions for downloads, for example, and you begin to wonder whether a backlash is on the way. Or whether the desire to save money will continue to take priority.