July 24, 2013
How Open Are Mobile Shoppers to Promotions?
According to a survey of Canadian shoppers, 58 percent would be interested in receiving personalized promotions from nearby stores while out shopping.
When asked what they would do if they received a promotion on their smartphone that applied to either the item they were buying or a complementary product, 38 percent of Canadians said they would buy both items. This was particularly true for women (44 percent vs. 31 percent of men) and those under 55 (41 percent vs. 20 percent of 55+).
Leger, the market research company in Canada, conducted the online survey for SAS this spring.
Among the other findings:
- Forty-seven percent of smartphone owners said they would be more likely to return to a store that sent them personalized promotions to their phone while they were out shopping. The under 55 crowd said they were 50 percent more likely to return versus 29 percent for those 55+;
- Seven in ten surveyed said they find it helpful when retailers make suggestions based on their previous online purchases. Younger shoppers (18-44) are more likely to find it helpful (72 percent vs. 61 percent of 55+), as are those who shop on their mobile phone (73 percent vs. 61 percent who don’t) and those who are comfortable making purchases without a card (76 percent vs. 58 percent who aren’t comfortable);
- Eighty-two percent said it would be helpful to be able to get access to detailed product and service information on their phone while in store.
Pointing to the dangers of random mobile offers seeming like spam, only a third of Canadian smartphone owners often or sometimes click on online advertisements. If the digital ads are personalized, half say they at least sometimes click on personalized ads
"Imagine the power of walking into a shopping mall, getting custom promotions delivered to you on your smart phone for things you’ve told the retailer you are interested in," said Lori Bieda, executive lead for customer intelligence, SAS Americas, in a statement. "That’s the power of big data and analytics coming together to deliver best in class marketing."
- SAS survey reveals: mobile marketing key to increased sales and improved customer loyalty (press release) – SAS
- Marketing success in a digital world: the power of customer analytics in mobile and online commerce (white paper) – SAS
- Marketing success in a digital world: The power of personalization in mobile and online commerce (report) – SAS
BrainTrust
Recent Discussions
Discussion Questions
Do you see personalized promotions via mobile devices taking off over the next few years? Can the offers be personalized enough at this point to significantly influence the response rate?
Poll
Two caveats leap to mind.
First, the key word in the survey question is “personalized.” Most of us appreciate receiving relevant, helpful advice—especially if it comes in the form of a discount offer on something we are already buying. (A situation the survey poses that I’m not sure how retailers would pull off unless the shopper prompts them to their minute by minute purchasing.)
Second, always beware questions phrased in the context of “would you use something that would help if…?” In college I sold educational handbooks door to door one summer. My rock solid technique was to get the kid(s) in the room with mom, then pop the “would you use these if they would help you do your homework?” question. 100% yes response from the kids and about a 50% hit rate on selling the books—roughly double my peers. I did have trouble sleeping at night that summer though.
This is the silver bullet. Personalized promotions via mobile at the point of purchase. The key is whether it can be personalized enough by using proximity technology to goods the customer is shopping. (Thinking the Tom Cruise movie, “Minority Report”).
Or is it a ‘dumb’ technology and only provides the items that the consumer has expressed interest in.
I see this already taking form at my local Stop & Shop with the self checkout scanner that you take with you and scan items as you put them in your cart. The handheld device will feed you offers based on what you recently scanned. It doesn’t always seem relevant to me, but they are getting closer to giving promotions at the time of purchase. I can see this application for pushing store brands…”you just scanned Advil, why not try Stop & Shop brand and save $4?”
Acceptance of mobile offers has everything to do with the CPG or retailer’s approach. If the incoming message looks like spam, it will most likely be considered spam. Starting the mobile message with your brand name followed by a legitimate-sounding promotion/offer will encourage the mobile user to at least give your message a chance.
Offers can be targeted to individuals very effectively today with the tools available in the marketplace. As more brands adopt these pervasive technologies and make them integral to their mobile strategy, the redemption of mobile marketing offers will become even more successful that traditional print FSIs.
Giving a discount for an item a shopper is already likely to buy? That’s a bit iffy. A “win win” is a personalized promotion that encourages a shopper to consider buying additional items, increasing the market basket and overall margin. It’s a fuzzy line for sure, but discounting items shoppers are already buying isn’t going to be a long term profit growth strategy for the retailer.
Personalized promotions can be highly effective, but they have to be set up to match the retailer’s business strategy and assortment, and the shopper’s personal preferences. As well, the “promotion” doesn’t have to always be a discount, it can be a suggestion/coordinate. Determining the personalization factors effectively and serving them up in/near store real time is the winner. Retailers are going to have to get to this capability.
Personalized promotions delivered via mobile devices have been in market and growing in popularity for the past 24 months. The survey provides some of the first evidence I have seen validating that consumers actually are interested in receiving the offers.
The key to future success in this area is for retailers to create enough presence online with consumers and in direct communications that consumers will opt-in for these communications. Switching from push to pull is a leading indicator that the mobile channel is on the way to reaching its potential.
Personalized promotions via mobile will absolutely take off.
And for large retailers, the offers can be highly personalized. Within retailers’ branded apps, for example, a lot of data about the shopper can be collected—starting with past purchase behavior (from loyalty programs…), the current shopping list (especially for grocers), and product searches conducted within the app.
The way the offer is presented will make a difference. If it’s intrusive, like many screen-hogging mobile ads currently are, it will likely be perceived as spam by the shopper. Mobile users are much more task oriented than traditional PC browsers, so a presentation that is more of an “in the flow” suggestion that is also relevant to the shopper’s purchase goals is more likely to be acted upon.
For many retailers, this can become a revenue source, as CPGs will pay for highly targeted and effective ads.
Personalization, if well executed, has revolutionary potential to alter the shopping experience.
But it will only take a few instances of poor execution to make shoppers skeptical and set back the entire concept for years. There are many potential pitfalls: Spam or perceived spam; misuse or failure to protect personal data; lack of offer relevancy; apps that perform badly.
My guess is that there will be plenty of screw-ups over several years before the public trust is fully earned. Then look out: Personalized marketing will become an absolute necessity.
I appreciate Lori Bieda’s quote on the “power of big data and analytics coming together to deliver best in class marketing.” Retailers will need to integrate both into a targeted mobile marketing strategy and execute it well to keep, not turn away, customers.
Currently, I receive promotions via text from many sources, including Simon malls, Office Max, specialty retailers and restaurants. I like the immediacy and information these promotions offer.
Quality, not quantity, makes the difference in mobile marketing.
Yes, I do see personalized promotions via mobile devices taking off but retailers need to be careful to ensure that consumers clearly and explicitly opt in to receive mobile offers.
Last fall LoyaltyOne surveyed US and Canadian consumers and six in ten (59%) said it was unacceptable for a retailer to send offers and information to the person’s smartphone whenever they are near the retailer’s location after permission is given to track their GPS location.
Of the 1,000 Canadian consumers responding to an online survey, four in 10 said they’d be willing to give a trusted company their religious affiliation and sexual orientation (41% and 40% respectively). Health information and political affiliation is also being shared with businesses (31% and 30% respectively), but we’re much more guarded about our location information. Just 22% of respondents said they would provide browsing information and a mere 16% would give up location via smart phone.
So sensitive is location information that the willingness to give it up is on par with willingness to divulge number of sexual partners (12%).
From Tom Ryan: 58% would be interested in receiving personalized promotions from nearby stores
From Bryan Pearson: Willingness to share location info is so low that it’s on par with divulging number of sexual partners (12%)
With such hot and cold survey results, the best you can conclude is location-based mobile marketing is not for everyone.
It’s most appropriate for businesses with impulse products, locations near high foot traffic (malls, urban centers), expandable consumption and high gross margins. It works best for consumers who are young, digitally sophisticated, deal-seeking, and on leisure time (weekends, evenings, travel).
Location-based mobile offers today have niche appeal. SAS can’t rest on technology functions like proximity detection, offer inventory, content libraries and personalization to crack the mass market that does not yet exist. They must understand the early adopter buyer and user.
Unless these promotions are pushed in an easy-to-access way, it would be difficult to get a conversion despite what is said in the survey. When you are shopping, you are so busy shopping, managing the cart and the kids and the phone calls/texts, it would be cumbersome to look for promotions and go the aisle with complimentary products. Unless all of this is made relevant and delivered in a easy-to-use way.
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Two caveats leap to mind.
First, the key word in the survey question is “personalized.” Most of us appreciate receiving relevant, helpful advice—especially if it comes in the form of a discount offer on something we are already buying. (A situation the survey poses that I’m not sure how retailers would pull off unless the shopper prompts them to their minute by minute purchasing.)
Second, always beware questions phrased in the context of “would you use something that would help if…?” In college I sold educational handbooks door to door one summer. My rock solid technique was to get the kid(s) in the room with mom, then pop the “would you use these if they would help you do your homework?” question. 100% yes response from the kids and about a 50% hit rate on selling the books—roughly double my peers. I did have trouble sleeping at night that summer though.
This is the silver bullet. Personalized promotions via mobile at the point of purchase. The key is whether it can be personalized enough by using proximity technology to goods the customer is shopping. (Thinking the Tom Cruise movie, “Minority Report”).
Or is it a ‘dumb’ technology and only provides the items that the consumer has expressed interest in.
I see this already taking form at my local Stop & Shop with the self checkout scanner that you take with you and scan items as you put them in your cart. The handheld device will feed you offers based on what you recently scanned. It doesn’t always seem relevant to me, but they are getting closer to giving promotions at the time of purchase. I can see this application for pushing store brands…”you just scanned Advil, why not try Stop & Shop brand and save $4?”
Acceptance of mobile offers has everything to do with the CPG or retailer’s approach. If the incoming message looks like spam, it will most likely be considered spam. Starting the mobile message with your brand name followed by a legitimate-sounding promotion/offer will encourage the mobile user to at least give your message a chance.
Offers can be targeted to individuals very effectively today with the tools available in the marketplace. As more brands adopt these pervasive technologies and make them integral to their mobile strategy, the redemption of mobile marketing offers will become even more successful that traditional print FSIs.
Giving a discount for an item a shopper is already likely to buy? That’s a bit iffy. A “win win” is a personalized promotion that encourages a shopper to consider buying additional items, increasing the market basket and overall margin. It’s a fuzzy line for sure, but discounting items shoppers are already buying isn’t going to be a long term profit growth strategy for the retailer.
Personalized promotions can be highly effective, but they have to be set up to match the retailer’s business strategy and assortment, and the shopper’s personal preferences. As well, the “promotion” doesn’t have to always be a discount, it can be a suggestion/coordinate. Determining the personalization factors effectively and serving them up in/near store real time is the winner. Retailers are going to have to get to this capability.
Personalized promotions delivered via mobile devices have been in market and growing in popularity for the past 24 months. The survey provides some of the first evidence I have seen validating that consumers actually are interested in receiving the offers.
The key to future success in this area is for retailers to create enough presence online with consumers and in direct communications that consumers will opt-in for these communications. Switching from push to pull is a leading indicator that the mobile channel is on the way to reaching its potential.
Personalized promotions via mobile will absolutely take off.
And for large retailers, the offers can be highly personalized. Within retailers’ branded apps, for example, a lot of data about the shopper can be collected—starting with past purchase behavior (from loyalty programs…), the current shopping list (especially for grocers), and product searches conducted within the app.
The way the offer is presented will make a difference. If it’s intrusive, like many screen-hogging mobile ads currently are, it will likely be perceived as spam by the shopper. Mobile users are much more task oriented than traditional PC browsers, so a presentation that is more of an “in the flow” suggestion that is also relevant to the shopper’s purchase goals is more likely to be acted upon.
For many retailers, this can become a revenue source, as CPGs will pay for highly targeted and effective ads.
Personalization, if well executed, has revolutionary potential to alter the shopping experience.
But it will only take a few instances of poor execution to make shoppers skeptical and set back the entire concept for years. There are many potential pitfalls: Spam or perceived spam; misuse or failure to protect personal data; lack of offer relevancy; apps that perform badly.
My guess is that there will be plenty of screw-ups over several years before the public trust is fully earned. Then look out: Personalized marketing will become an absolute necessity.
I appreciate Lori Bieda’s quote on the “power of big data and analytics coming together to deliver best in class marketing.” Retailers will need to integrate both into a targeted mobile marketing strategy and execute it well to keep, not turn away, customers.
Currently, I receive promotions via text from many sources, including Simon malls, Office Max, specialty retailers and restaurants. I like the immediacy and information these promotions offer.
Quality, not quantity, makes the difference in mobile marketing.
Yes, I do see personalized promotions via mobile devices taking off but retailers need to be careful to ensure that consumers clearly and explicitly opt in to receive mobile offers.
Last fall LoyaltyOne surveyed US and Canadian consumers and six in ten (59%) said it was unacceptable for a retailer to send offers and information to the person’s smartphone whenever they are near the retailer’s location after permission is given to track their GPS location.
Of the 1,000 Canadian consumers responding to an online survey, four in 10 said they’d be willing to give a trusted company their religious affiliation and sexual orientation (41% and 40% respectively). Health information and political affiliation is also being shared with businesses (31% and 30% respectively), but we’re much more guarded about our location information. Just 22% of respondents said they would provide browsing information and a mere 16% would give up location via smart phone.
So sensitive is location information that the willingness to give it up is on par with willingness to divulge number of sexual partners (12%).
From Tom Ryan: 58% would be interested in receiving personalized promotions from nearby stores
From Bryan Pearson: Willingness to share location info is so low that it’s on par with divulging number of sexual partners (12%)
With such hot and cold survey results, the best you can conclude is location-based mobile marketing is not for everyone.
It’s most appropriate for businesses with impulse products, locations near high foot traffic (malls, urban centers), expandable consumption and high gross margins. It works best for consumers who are young, digitally sophisticated, deal-seeking, and on leisure time (weekends, evenings, travel).
Location-based mobile offers today have niche appeal. SAS can’t rest on technology functions like proximity detection, offer inventory, content libraries and personalization to crack the mass market that does not yet exist. They must understand the early adopter buyer and user.
Unless these promotions are pushed in an easy-to-access way, it would be difficult to get a conversion despite what is said in the survey. When you are shopping, you are so busy shopping, managing the cart and the kids and the phone calls/texts, it would be cumbersome to look for promotions and go the aisle with complimentary products. Unless all of this is made relevant and delivered in a easy-to-use way.