Maybe the only thing increasing faster than the use of mobile devices to research and purchase merchandise is the number of articles about this topic. We are definitely follow the trends at Affinity Express because we not only support major retail clients, we also provide mobile ad and mobile website design for smaller retailers through our publishing and marketing service clients. Here is some of the coverage from this week that I found interesting from both the retail marketing perspective and the consumer standpoint.
Since I'm writing this post as a representative of Affinity Express, I'm not going to quote the first line of this article but it basically notes what one third of us would rather give up than our mobile phones. That pretty much reinforced what I already knew--it's time to marketers get serious about mobile if they haven't already!
Yet few big brands are doing it (mobile marketing, not the other thing). Mobile advertising accounted for less than 1% of worldwide ad spending in 2011 (eMarketer). This is despite the evidence that it works well. For example, a mobile-based loyalty program for Maurices (a chain of women's clothing stores) was directly responsible for $1 million in sales in four months.
The article lays out several reasons why mobile should be part of any company's marketing plans:
- Mobile interaction is the internet 3.0--mobile platforms and apps are driving more and more online traffic and customized user experiences and there will be huge increases of mobile-only internet users in the next few years.
- Mobile goes beyond Google--last year, 14 million mobile users scanned a QR code with their devices.
- Email is going the way of the fax--open rates for emails are at about 11% but they are at 95% for mobile phone texts.
- Social media is going mobile--U.S. mobile social media users grew by 37% and Twitter and LinkedIn mobile usage doubled in 2011.
- Moms are more mobile than everybody else--moms are more likely to own a smartphone than anyone else and, in 2011, 25% of moms were using mobile devices to hunt down discounts and to find coupons, while 20% were actually shopping online with smartphones.
As the article notes, "The trends are clear." I can't get over that 95% open rate for mobile phone texts!
According to 60 Second Marketer, this post is for the typical marketing executive or business owner who understands the power of mobile but is still trying to figure out how to leverage it for his or her business. The good news is that the cost of running a mobile marketing campaign is still relatively low. According to Opera Software, on average it costs $2.85 to reach 1,000 iPhone users with a mobile ad compared to an ad in a national newspaper, which can cost as much as $50 to $100 to reach 1,000 viewers.
The post reviews mobile marketing platform options that will provide the best ROI:
- Mobile paid search: half of all U.S. mobile ad spending goes toward search and 95% is spent on Google. For hotels, restaurants and auto insurance, bids for keywords can be even higher on mobile than on desktop because people search for these products when they are mobile and competition is stiff.
- Mobile display (banner) ads: banner ads account for nearly $2 of every $10 spent on U.S. mobile ads and can lead viewers to a number of ad experiences. The click through rate on a desktop is 2.39%, on a smartphone is 4.12% and for a tablet computer is 3.12%. This implies positive ROI for mobile.
- Mobile apps: these are best for brands with a built-in user base like Domino's or Starbucks who want to deepen the relationship with customers.
- QR codes: within two to three years, QR codes will be gone and replaced by better options but they are effective today. In fact, 50% of smartphone users have scanned QR codes and 18% have made a purchase as a result.
What doesn't work in mobile marketing is using SMS to SPAM, sending QR code visitors to bad landing pages or ignoring new platforms as they come along.
According to Jerry Rightmer, president and CTO of Starmount, the retail industry is still in the early days of mobile deployments and mobile selling. He believes the rate of innovation and adoption will continue at an unprecedented speed.
Urban Outfitters has been a leader in this area. They deployed in-store mobile technology chain-wide so associates can process in-person and online transactions throughout the store. They've also build custom apps to facilitate a better overall customer and associate experience.
Other retailers are using in-store mobile technology to provide associates with product information and capabilities to process transaction and also to sell services, access loyalty data, provide ratings and reviews, pick up merchandise ordered online in the store and return items--all while standing right next to the customer.
This would create a compelling in-store experience, a strategy that ties into the next post . . .
There is a lot of buzz lately about showrooming or the practice of consumers using brick-and-mortar stores to check out products but to buy online. But an annual poll by BDO USA found that 88% of chief financial officers are not concerned about showrooming.
Shoppers today often use their smartphones and tablets while in store to check competitors' prices and even make purchases. Here's what retailers are doing to contend with this consumer practice:
- 25% of the CFOs will counter showrooming by improving customer service.
- 25% are expanding options for in-store pickups and returns.
- 17% are featuring exclusive goods in-store.
- 17% are working on matching prices with online retailers.
- 77% are maintaining their investments in mobile commerce for the upcoming holiday season.
- 19% plan to increase their spending on mobile commerce.
Stephen Wyss, a partner in the Retail and Consumer Products Practice at BDO USA, said: "Holiday season expectations on the online side are tempered, along with brick and mortar, with where is consumer confidence going to be and how the election is going to impact that." It makes sense that retailers are ore concerned that people shop at all, rather than where they do it!
Smartphones enable consumers to shop anywhere and at anytime and retailers have to understand and adapt to mobile behavior. IBM Corp. predicts mobile devices will account for more than 20% of web traffic, up from about 11% of online holiday traffic just two years ago. This statistic provide insight into mobile's growing influence in retail.
But a mobile retail strategy has to go beyond setting up a mobile web store or app. It requires an understanding of why consumers shop with mobile devices and their expectations for researching and purchasing.
- Mobile websites are great for customer acquisition. They allow for product discovery.
- Mobile apps are effective for customer retention. They allow retailers to share unique experiences with their brand-loyal audiences, such as calling up an in-store map to locate the right aisle for a product. Apps can also push coupons to shoppers when they are in a store.
An important point is that apps have to have features consumers are going to use regularly or they will just sit on mobile devices. The best way to find out what consumers want? Ask them. And a critical element in refining the mobile strategy is knowing what is different about mobile versus other marketing channels.
- Brands matter. Retailers have to understand the devices being used. People use tablets and smartphones differently. Android users have different expectations for the online experience than iPhone users.
- Measuring success. ROI has to be calculated in new ways because traditional metrics like conversion rates don't provide enough detail. One newer technique for mobile measurement is to leverage native technologies like local push notifications (the retailer provides coupons, sales information or other messages when the consumer connects with the retailer's app while in store).
- Search engine optimization. Keywords that convert well when consumers are shopping on a computer are not necessarily the ones that will be most relevant to mobile shoppers (because of the small keyboards).
It is helpful to keep in mind that mobile users are task-oriented so retailers have to deliver relevant content and experiences. Whether or not shoppers actually buy using their phones, mobile definitely influences future consumer behavior in other channels.
After reading so much about retailers' use of mobile marketing this week, I think a little further research is needed. This weekend, I'm going to grab my iPad , load up a few new apps and head out for some showrooming! Have a great weekend.