Executive Suite

Call to Action

Marketing a jumping-off point for many retailers’ mobile initiatives

Buoyed by rapid consumer adoption of smartphones and similar mobile devices, the retail industry is laying the groundwork for what is anticipated to be a highly robust mobile marketing environment.

But the groundwork will be the easy part: Understanding and exploiting the precise applications that will drive new revenue opportunities is the larger challenge.

“Everybody’s working on mobile right now — it’s just a question of how fast and how much,” says Julie A. Ask, vice president and principal analyst at Forrester Research.

Mobile marketing is “a big deal,” says David Rich, president and CEO of ICC/Decision Services, which assists retailers and brand merchandisers in reaching their customers. “It is going to be so ingrained in just how we shop and how we conduct our business. The opportunity is huge.”

Digital coupon applications have received a fair amount of attention, and retailers like J.C. Penney, Best Buy, Kroger and Target have launched programs over recent months. Despite potential opportunities, however, the ROI for such an application is still evolving, Ask says.

Mobile can’t yet provide anything approaching the consumer “reach” of print or even digital coupons. Inmar, a provider of digital coupon clearing and promotion transaction settlement, estimates that digital coupons account for less than 0.005 percent of all coupon redemptions.

Retailers will need to improve how digital coupons are distributed, how they will promote the application and how they will get them into the hands of consumers. They “need to be willing to spend, but not just on the solutions,” Ask says, “but on the education and the marketing of mobile services, too.”

Steve Roberts, CEO of ShopText, a provider of mobile promotion response and loyalty programs to brands and retailers, says mobile marketing applications will need to engage consumers to opt in to programs by creating a new direct-to-consumer channel.

Texting is inherent to smartphones, and retailers need to create opportunities for ongoing messages to trigger transaction fulfillment to club, rewards, debit or credit cards, Roberts says. Rather than trying to jam web content and video into smartphones’ limiting form factor, the marketplace’s approach to the smartphone should be akin to that of a “handheld mouse”: The point is for consumers to create a point-and-click, see the text and fulfill the transaction when they are offline.

“It creates a channel,” he says. “It’s a new way to engage the consumer in real activity.”
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