Mobile Best Practices for Retailers

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1 Published by FierceMobileContent Custom Publishing Why is Mobile Important? Immediate. Relevant. Effective. Mobile messaging is the single most likely media channel with which consumers will engage. Mobile Best Practices for Retailers sponsored by Consumers increasingly turn to their mobile phones for timely and pertinent information regarding their purchasing decisions, and the mobile experience is more intimate than ever, making it a particularly unique and effective marketing channel. Unlike other media platforms such as traditional TV, radio, and newspapers the mobile handset offers a direct and immediate touch point that can be customized and personalized. According to a Harris Interactive study, Internet banner ads are ignored by 46% of website visitors and do not convert at a high rate (less than 1 percent) because they are not delivered at a relevant time. In contrast, research shows that almost 94 percent of SMS messages are read, and most are read within 5 minutes of their receipt. Text (SMS) messaging is available to virtually every handset on the market, including smartphones and feature phones. Mobile messaging remains the most ubiquitous, and one of the most effective, mobile mediums for marketing, says independent industry strategist Chetan Sharma. Given the global usage and familiarity with mobile, it s important to include mobile messaging in any overall engagement or marketing strategy. And because of its tremendous reach, mobile messaging offers retailers and brand advertisers a very effective tool that can work across device and OS types. A balanced marketing strategy is a necessity for retailers operating in today s disjointed media landscape, where audience fragmentation and a bevy of communication platforms create steep competition for building awareness and attracting new customers. Merchants can take advantage of a myriad of mobile messaging channels, including , text messaging, mobile app push notifications, and social networks in order to reach customers wherever they are. By employing a mix of these options, combined with other more traditional marketing channels,

2 Retailers can use SMS to deliver product or promotional information alerts, track inquiries and receive order status updates. While SMS is a mainstream communication tool and can reach the largest audience, it is not a rich communication medium. Free to End User (FTEU) With FTEU messaging, the sender of the message pays for fees imposed by the mobile operator. This removes the concern of marketers and merchants about charging subscribers to receive their SMS messages. Because it is free to the consumer, FTEU messaging offers access to the widest mobile consumer base possible. Retailers can send late-breaking deals or coupons directly to consumers through FTEU messaging. merchants can reach customers at multiple touch points in the purchasing lifecycle. In addition, marketers can exceed user expectations for engagement, create considerable business value, and reward customer loyalty. It is easy to exploit the ubiquity and immediacy of mobile messaging which is available to virtually any handset and often draws instant engagement with open rates over 90 percent to expand marketing initiatives, boost brand presence, provide real-time relevant product information, drive sales, and build long-term customer relationships. Further, mobile messaging campaigns can be quickly deployed, tracked, and quantified, providing a positive return on investment. Mobile Messaging Channels Mobile messaging complements traditional media to drive customers through their purchasing lifecycle by supporting brand building, product discovery and knowledge, demand generation, loyalty, and purchase. In order to maximize effectiveness, a multi-channel approach to mobile communication can help retailers achieve their business goals. Mobile messaging channels include: Interactive text messaging (SMS) SMS is the most immediate and ubiquitous means of mobile communication today. It is accessible by nearly everyone with a mobile device. Text messaging provides the broadest consumer reach and allows direct interaction with mobile subscribers. Bulk/International SMS This SMS category allows the global transmission of high volumes of one-way messages to consumers at low cost. Bulk SMS is suitable for retailer advertising or customer response campaigns. MMS (Multimedia Message Service) MMS enables up to 500KB of rich media such as pictures, audio, or video to be delivered to MMS-capable phones. Examples of MMS include: branded advertisements, mobile coupons, interactive surveys, music videos, sports highlights, messaging including a logo, and photos. With MMS, retailers can add video, audio and graphics to longer messages. However, not all mobile phones are MMS-capable, which limits the addressable market. Push Notification A Push Notification is a smart device-enabled message sent directly to an application on a consumer s phone. Once a customer has installed the relevant application and opted in to receive Push Notifications, retailers can send product updates, coupons, brand awareness promotions, loyalty program statements, or any other messages that engage customers. Push messaging only reaches smartphone users a fast- growing market segment, but one that is still less than half of U.S. mobile subscribers today. What About Apps? The role of mobile messaging in a balanced marketing strategy is expanding, thanks in part to the mobile communications industry s explosive growth. According to Sharma, the U.S. mobile market has

3 surpassed 105% penetration, meaning there are more cell phones than people across the nation. It is evident that consumers are increasingly turning to their mobile devices for information and content rather than voice communications. Smartphones contribute more than 60% of the new mobile handsets being sold in the U.S., and mobile data makes up almost 40% of overall operator revenue, says Sharma. Though the use of mobile applications has become mainstream, apps are not always a retailer s best marketing ally. There are millions of apps in the market, meaning the majority of them are never discovered by potential customers. Therefore, it is likely that a retailer could squander considerable time developing an app that may never be seen, much less downloaded. Additionally, apps rarely retain their attraction over time. In general, over 50% of apps are never used after download, says Sharma. Nonetheless, apps continue to attract users and can therefore provide a highly frequented channel for distribution of mobile content. According to a January 2011 study by Zokem Research (now known as Arbitron Mobile), which profiled more than 2,200 smartphone users in the United Kingdom and United States, apps generate 667 total monthly usage minutes per user, almost as much as messaging-related services, including , text, multimedia, and instant messaging, which generate 671 monthly minutes of usage. Voice services generated only 531 minutes of monthly use. Sharma contends that relative to messaging, apps can offer better engagement, lead to a longer merchant relationship with the consumer, and ultimately drive both traffic and commerce. Smartphones contribute more than 60% of the new mobile handsets being sold in the U.S., and mobile data makes up almost 40% of overall operator revenue. Successful apps are generally those which are highly targeted to specific customer groups and which solve a problem or provide some other utility. Even the most widely-adopted app must be continually updated in order to provide fresh incentives for users to engage with it. Marketers should study metrics regarding app downloads, content usage, and conversion rates in order to ensure an app s features are generating the desired user engagement and return on investment. Retailers can find the latest mobile app research at MobiThinking.com. Combining apps with mobile messaging produces especially powerful customer engagement. Smartphone owners are generally asked if they will accept push notifications from a recently downloaded app, and those who opt in will subsequently receive app-related alerts, which, in the case of a merchant, might include breaking news, product information, and special sales offers. This real-time interaction provides a unique user experience that leverages both the messaging and app environments.

4 can include automatic updates or they can be interactive, allowing consumers to request and receive the desired information. Retailers should follow a number of best practices in order to launch a successful mobile messaging campaign. For example, they should: Only message customers who have opted in to receive messages by, for instance, replying to a short code or entering their information on the company website or corporate Facebook page. Ensure marketing programs follow applicable federal and state laws, industry rules, and operator regulations. Create marketing content that is suitable for all audiences. Using Mobile Messaging Mobile messaging offers retailers the opportunity to reach consumers in real time with information and offers that provide new revenue streams and enhance existing ones. To be successful, retailers need to commit to running a program or a series of programs over a longer period of time, says Dan Slavin, CEO of CodeBroker, an application service provider (ASP) that enables retailers to mobilize their loyalty and marketing programs. Slavin describes three primary categories of retail mobile messaging campaigns: Traditional marketing program As with marketing programs in other media, this category includes coupons and contests such as instant wins, sweepstakes, and interactive voting. Information services This category delivers supplemental information regarding products in the store and can be interactive. For instance, a customer can send a text message requesting information on a particular SKU. Service alerts Designed for use with loyalty programs or store credit cards, this category provides shoppers with personalized information such as their account balances, payment reminders, and shipping information for online orders. Service alerts Send only relevant information such as targeted promotional alerts and loyalty program statements. In addition, retailers should engage an experienced mobile solution partner that understands mobile messaging and monetizing retail campaigns. A knowledgeable partner will navigate the web of mobile industry guidelines and operator rules, allowing retailers to remain focused on their business. The preferred way to approach multi-channel mobile messaging programs is for retailers to employ a third-party centralized mobile transaction platform. The mobile solution partner should have extensive operator connections and provide superior multi-channel, cross-network services addressing virtually all device types, in order to promote user engagement and exploit multiple messaging channels such as SMS, MMS, and Push Messaging. There are also numerous other considerations and questions that retailers should ask when selecting a mobile business partner. For example, does the potential partner offer an industry-leading service level agreement (SLA) with an uptime guarantee? Can the company launch targeted mobile campaigns to subscribers worldwide? Are turnkey mobile service management solutions available? And does the potential partner fully understand all aspects of the mobile channel? In addition, retailers should consider collaborating

5 with a company that provides a hosted mobile messaging solution, removing the complexity of building and maintaining a mobile messaging infrastructure. This solutions-oriented approach offers retailers an integrated multi-channel messaging approach that addresses how subscribers interact with their mobile devices and consume mobile content. A mobile solution partner following this model will determine the best way to deliver messages directly to subscribers across multiple channels. Key capabilities of this approach include: A hosted integrated messaging platform Simple integration to the platform via API or SDK An interface allowing users to address multiple messaging channels Support for multiple messaging channels both carrier and non-carrier (i.e., social networks or ) Unified reporting allowing a view of the effectiveness of each messaging channel Ability to scale as messaging volume grows Merchants currently interacting with subscribers via multiple mobile channels particularly benefit from this approach, which offers a straightforward and cost-effective solution for reaching their target audience regardless of message type or channel. Other benefits of this Integrated, Intelligent Mobile Messaging model are: Improved brand awareness thanks to a one-stop solution for merchants Increased subscriber satisfaction and loyalty due to the consistent and reliable messaging experience Cost savings from simple integration regardless of message type or channel By employing Integrated, Intelligent Mobile Messaging via a hosted multi-channel messaging platform, merchants will maximize campaign effectiveness and subscriber reach. This approach simplifies how merchants engage their customers via mobile regardless of network operator, device type (smartphone or feature phone) or messaging channel. How Brands are Taking a Multi-Channel Approach to Mobile Messaging Brands and merchants increasingly turn to mobile messaging in order to deliver timely and pertinent information directly to their targeted audiences. Coupons, sweepstakes, and rewards programs are all possible vehicles for enabling the compilation of mobile marketing databases for long-term customer engagement. Following are examples of recent mobile messaging campaigns by top U.S. consumer brands and retailers: Coca-Cola The Twist, TXT, Win messaging program initiated in May 2011 by Coca-Cola offered entrants the chance to win thousands of prizes, including one of 35 trips to a Live Nation concert, one of 10 trips to New York, $500 Best Buy gift cards, and more. The program also helped Coca-Cola build up its mobile database by encouraging sweepstakes entrants to opt in to the brand s mobile database to receive future messages. To enter the contest, customers who bought 20 oz. Coca-Cola products could text the alphanumeric code under the bottle cap to and receive an SMS response letting them know if they were an instant winner. Bottles with the cap codes carried the promotional message Twist, TXT u could win. In addition to competing for prizes, contest entrants also gathered redeemable points for the My Coke Rewards loyalty program, which is accessible online and via cell phone. The ongoing rewards program lets consumers accumulate points by texting the cap code to 2563 (COKE). Starbucks Starbucks Coffee is an aggressive mobile marketer, and one of the retail coffee chain s recent initiatives involves an in-store call to action that encourages customers to join the My Starbucks Rewards program. Framed posters placed near the drink counters in Starbucks stores instruct customers to visit or to text the keyword GOLD to the short code (MYSBUX) in order to join the loyalty program, which rewards consumers with free drinks, refills, and other incentives when they pay for their coffee and other products with their prepaid Starbucks Card. Customers who opt in via SMS receive a thank you reply via text, which includes a link to the My Starbucks Rewards page. Starbucks also offers My Rewards iphone and

6 Android applications to help customers track their account. Grey Goose During the 2011 US Open tennis tournament in New York, vodka maker Grey Goose ran an opt-in SMS campaign through which mobile customers could register to receive messages and enter to win Grey Goose-brand prizes. The company s tennis tie-in, its Honey Deuce cocktail, was promoted to the upscale US Open attendees with an eight-foot-tall souvenir cup full of tennis balls. Customers of legal U.S. drinking age who texted the keyword GUESS to short code received a series of SMS messages and could send in their guess regarding the number of tennis balls in the cup for a chance to win prizes. Grey Goose also runs an ongoing SMS program through which it sends cocktail recipes and videos to mobile customers who opt in via its website. Men s Wearhouse/K&G Fashion Superstore K&G Fashion Superstore, a 101-store chain owned by Men s Wearhouse, used an opt-in SMS coupon campaign to build a list of more than 80,000 mobile customers for its marketing database between February and May The program was continuing to add 6,000 new customers each week after this initial introductory period. Knowing that its core customer group, African-American men ages 25-54, are heavy mobile phone users, K&G set up in-store signage promising a $5-off coupon redeemable that day to customers who texted a keyword to a particular short code. Cashiers could subsequently enter the code into the store s point-of-sale system when the customer made a purchase. The SMS coupon program enjoyed a 93 percent redemption rate between February and May Following a double opt-in process, which requires customers to reply to a verification message once they sign up for the SMS program, K&G sends its mobile customers four messages each month announcing events, alerts, coupons, and more. K&G continues to gauge mobile customer responses to various messages and is integrating its new mobile database with its existing CRM database. Redbox Redbox, the DVD rental kiosk company, reported that its 10 Days of Deals promotion during the spring of 2011 generated more than 1.3 million text messages. Stickers placed on Redbox kiosks encouraged customers to text the keyword DEALS to in order to receive discounts of $0.10 to $1.50 off a one-day video rental. The campaign was also promoted via , social media and public relations, all of which contributed to strong wordof-mouth marketing. Redbox also offers Android and iphone apps to its customers. Summary By messaging customers through their mobile devices, retailers can deliver highly targeted marketing communications to shoppers and open the door to new revenue opportunities and long-term customer engagement. Mobile is a crucial component in any balanced marketing strategy because it is the one media channel delivering a personalized touch point that directly engages a customer before, during, and after the purchasing lifecycle. Quickly deployed, tracked, and quantified, mobile messaging is available to virtually any handset, often drawing instant engagement and offering a positive return on investment. Studies show that almost 94 percent of SMS messages are read, and most are read within 5 minutes of their receipt. Further, SMS message campaigns are said to typically enjoy response rates upwards of 20 percent. That makes mobile messaging a lucrative channel for merchants that want to cost-effectively expand their marketing approach, and attract and retain customers over time. Working in concert with a trusted mobile solution partner, such as one with broad mobile industry experience and hosted mobile messaging solutions, retail merchants can influence their customers mobile lifestyles to build brand awareness, shopper satisfaction, and long-term loyalty. About OpenMarket: OpenMarket empowers retailers to monetize their services, expand their marketing initiatives and strengthen customer relationships by leveraging the mobile channel. OpenMarket offers a hosted multi-channel Integrated Intelligent Messaging platform that allows merchants to reach their target audiences regardless of message type or channel. The OpenMarket mobile messaging model successfully supports Fortune 1000 retailers and brands in the United States. For more information, please contact or sales@openmarket.com.