Mobile is maturing quickly. IAB stats show that 25.2m UK mobile users are actively engaged in m-commerce and Google estimates that 85% of mobile users look for local information via search. Mobile couponing is also taking off – a recent survey by IAB and Viggle found 57% have redeemed digital coupon or voucher code via mobile device.
The challenge is to convert consumer interest into action. My experience of working with retailers is that customers use the mobile channel more for task completion than conversion. Of course there is sales conversion (and the revenue from mobile sites/native apps often grows quicker than desktop due to the relatively lower starting point) but smartphone conversion rates usually lag behind desktop.
What conclusion should we draw? The naïve view is that mobile isn’t working. When you dig into the data and user feedback, you start to see a different picture; people are using mobile devices for many intermediary tasks that increase their engagement with a company e.g. watching product videos. In a multi-channel world, the mobile device often acts as a conduit to offline channels, demonstrated by the rise of mobile coupons. Providing a positive experience at this stage helps fuel conversion later on in the buying cycle.
An interesting area for marketers is tapping in to the opportunities that GPS functionality on mobile devices provides for targeted marketing. Research demonstrates that people are willing to share their locations in return for services that they value.
Figure X – Survey of services users would be willing to share their location for
Location based services, or proximity marketing, help bridge the gap between online and in-store and can play a key role in throughout the customer journey; let’s take a look at some examples.
1. Using geo-fences around physical locations
This is most often used to push marketing messages to customers to entice them into store. However, it’s also possible to use mobile messaging to promote value add services such as in-store events and exclusive deals, rewarding local customers (see below).
One way to apply this in retail is to serve personalised messages to app users based on their previous browsing and buying patters. For example, if I shop regularly at House of Fraser and buy exclusively from menswear and 80% of my purchases are Calvin Klein, then next time I’m in the area the ecommerce team could ping me a notification of discounts on Calvin Klein and related brands, or alerts on new ranges now available.
In the US Best Buy launched an innovative geofencing campaign in collaboration with Placecast and SocialVibe. When customers are near a store the geofence is triggered, prompting an SMS alert.
Looking beyond retail, GPS is being used cleverly by Apple in its Find My Friends apps. A recent update allows for a customisable geofence that can be increased or decreased around a located iOS device.
2. Using push notifications to drive local action
Marketers use in-app opt-in preference centres to capture permission to send push messages to users. This allows segmentation to tailor messaging based on individual preferences, much like the segmentation of an email database.
Ecommerce teams can segment push notifications based on user preferences so that customers only see the messages most relevant to their interests. This reduces annoyance and increases the likelihood of response.
A good example is new store openings. By capturing interest in local store offers, ecommerce teams can then push messages to customers in catchment areas when a new store opens. The message can also be triggered when people enter the store geofence, capturing ‘incidental’ visitors. This can help the business increase footfall.
Notifications can be stored in-app via a notifications centre, so customers can access the messages whenever they want to. The message can be set with an expiration date/time so that obsolete messages aren’t visible to customers.
An interesting application of this came from Saks in response to the Boston Marathon bombs. They sent a message informing app users that 10% of all Friends & Family sales at the Boston store would be donated to the charity fund for families of the victims.
3. Using mobile coupons to drive people to store
The number of discount coupons redeemed through mobile and tablet devices is expected to double this year to 10 billion as savvy shoppers hunt for discounts, according to Juniper Research. Mobile coupons are much more likely to be used, with an average redemption rate of 10%, compared to traditional print media, with around 1% or less.
Apps have sprung up that send you exclusive mobile coupons from thousands of retailers. In the US Yowza is one example, though it’s only available on iOS. Vouchercloud.com has a ‘Mobile Vouchers’ category that includes major high street retailers like The Body Shop who are using mobile vouchers to drive store purchases.
A key benefit for multi-channel retailers is the ability to measure the impact of mobile marketing on store sales as the coupons are scanned or keyed at store POS points. This supports attribution analysis and modeling.
Ideally, retailers would have modern scanners so smartphone barcodes can be scanned without the need for manual keying, improving the user experience. However, many stores rely on old scanners, so mobile coupons can still be redeemed but store staff need to key the barcode number manually.
4. Rewarding task completion in local stores
Mobile enables companies to expand loyalty and recognition schemes by rewarding task completion, not just purchasing. A good example is encouraging customers to check-in to local stores in return for loyalty points or prizes (e.g. unlock unique content such as video).
Shop Kick was the first mobile app to reward customers for completing tasks that don’t involve making a purchase. Each time you enter a store or complete a task, you earn ‘Kicks’. If you actually make a purchase via the app, then you earn a kick bonanza. You can redeem kicks for products from participating retailers. It has partnered with most of the major US retail chains including Best Buy, Crate & Barrel, Macy’s and Target. It works on Android and iPhone.
An interesting use of GPS is Sit or Squat, a service that plots public toilets on a map that contains 100,000 toilets in 10 countries. It partnered with P&G to promote their Charmin toilet paper.
In London there is Cabwise, an app using SMS to text people their nearest licensed minicab and taxi companies.
Here are our top tips for location based mobile marketing:
- Set up geo-fences around your business locations.
- Let customers save their preferred store in their app and mobile preferences.
- Use push notifications to alert customers to events and promotions at local stores.
- Use geo-fences to send persuasion messages to app users in the vicinity.
- Tailor messaging and promotions based on the customer’s previous browsing and shopping behaviour within the geo-fence.
Comments and questions
What do you think? Please drop by and share your comments, questions and experience. Please also share any relevant links you think readers would be interested in.
Google Mobile Planet is a great source of current industry data on global mobile usage.
Rob Thurner and Dave Chaffey have written an excellent guide to mobile commerce for eibDigital. I recommend downloading and using as a reference manual.
Mobilecommercedaily.com is a great source of mobile marketing news and case studies of campaigns that have been launched.
Download our free guide to getting started with mCommerce