February 25, 2008
Wal-Mart Texts and Consumers Like (some of) It
A test in December taught Wal-Mart that it can get closer to its customers with cellphone text messages or it could completely turn them off.
According to Storefront BackTalk, an unnamed manager working on the trial, said, “We were sending 10-15 in about three or four text messages. We learned that three messages is where the consumer says, ‘I’ve heard enough from you, Mr. Retailer.’”
The anonymous manager said the mobile trial involved hundreds of thousands of consumers. “About 10 percent of those we approached went for it,” she said.
Interestingly, while consumers wanted Wal-Mart to limit the number of messages, they didn’t mind if there was more than one waiting when they checked their texts.
The manager said that consumers only check their text messages every few hours so having several waiting was not overly annoying. “The compressed time period alienated people less,” she told the site.
Discussion Questions: Are you surprised that “hundreds of thousands” of Wal-Mart customers would be willing to participate in a mobile messaging advertising test? About 10 percent of those approached took part in the Wal-Mart test. Is this percentage about what you would expect in terms of consumer willingness to receive ad messages through their cellphones? What do you see as the most important learning from the Wal-Mart test?
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To clarify my response to Evan’s question–I’m not asking whether or not the program exists–just how many people have actually used it and, of those, how many can be viewed as regular users. If it’s such a runaway success, where is the Wal-Mart press release?
The volunteers also volunteered to play along by giving up their mobile numbers in the first place. I heard yesterday about a company that can send text messages to any phone within a 100 meter radius–interesting to try that with customers who are already in the store and see how many converge on the aisle where the sale is. And whether they then agree to receive more messages. Watch out for stampeding shoppers.
My guess is that the 10% who liked getting text messages from Wal-Mart were most likely children who don’t mind being annoyed. Thinking back 30 years, it reminds me of businesses that would advertise over CB radios. It’s kind of a cute thing that started with adults, soon became annoying, and then became a cute form of communication for children.
Actually, Ryan, no one–to my knowledge–has said anything about this being a runaway success. Indeed, the “lessons learned” heading was to indicate that it had rough spots but that it was a learning experience.
The Europeans and tech-savvy Asians have already mastered this. Surely Wal-Mart could learn something from their peers at Asda and get this right.
The key to success in Europe has been opt-in services that include a limit to number of messages and a filter so that the content is specific and directed.
As with everything else, Google will eventually take over and deliver the right message(s) to the right consumer(s).
Interesting thoughts. To Ryan’s point, he wonders why he hasn’t heard about it until now. I can’t speak to that, but we heard about it extensively in December, reported on it back then and saw the Web promos for it. Indeed, here’s a screen capture: Secret In-Store Specials.
As for the merits, the advantage offered to consumers–for free–seems compelling enough. The perception that they will learn of a sale on something they care about in an easy way. If there’s a chance to save some cash on something you want, many thought, why not let Wal-Mart text me? If it gets to be annoying, I can always unsubscribe.
Also, this was during the holiday rush, so a heads up on short duration sales was considered quite attractive.
The concern I have is less about consumers getting fed up (they will), but about Wal-Mart not making this compelling enough. To make it truly work, make this the ONLY way select items are marketed, giving the mobile user a true advantage.
But given that anyone with a cellphone can join, it should be an incentive to collect a lot of cellphone numbers. At that stage, yes, Wal-Mart would need to be very conservative about using the data.
Would they restrain themselves?
Texting is an obvious “new media” way for retailers and marketers to reach their target customers. As with email blasts, however, companies need to ensure that consumers can opt out so that texts don’t become just another form of spam. There are also far-reaching consequences if marketers can partner with cellular carriers to “sponsor” usage to consumers willing to receive texts. The ability to carry paid advertising turns the phone into another ISP like Yahoo or Google…stay tuned over the next few years to see how this trend evolves.
At only 10% “take rate” on the offer, do the math. In order to get “hundreds of thousands” of participants for the text test, Wal-Mart may have used their massive database of millions of shoppers from their web site. Given these are Wal-Mart loyal shoppers already, one could assume that the willingness to participate in a text message program that was designed to save the shoppers some cash would be higher than 10%.
Without knowing where the base of consumers came from, it’s hard to predict if 10% willingness to participate is a predictable average. If anyone is doing real research in this area, please publish, as this is an area of interest across the entire CPG industry!
Not surprising that people were willing to test the concept. The problem is–as with anything–it will get used way too much too quickly and wind up turning off far more consumers than it attracts. If a retailer could only use this type of approach to their top 2 – 3% of consumers then it might work but finding the top 2 – 3% is the problem and in the end will be the downfall.
Retailer text messaging will be most effective for loss leaders. So the retailers will have to measure the cherry-picking skills of their text message recipients. Will the shoppers buy some profitable items on the same trip, or will text messaging just become another way to lose money?
First of all, I want a better source. If hundreds of thousands of people were doing anything, we would have heard about it before now. Or did Wal-Mart swear “hundreds of thousands” of people to secrecy and, if so, can we get them to join the CIA? That said, are people willing to try almost anything new? Yup! Some people are. Will it stick? We don’t know enough to even begin answering that question.
I’m somewhat skeptical how the anonymously reported results from test were arrived at. It’s not easy to believe that hundreds of thousands of consumers actually welcomed the text advertising unless the incentive was unusual or even misinterpreted or misunderstood by the recipient. Let’s wait and see.
Generally in the US consumers are willing to give up information in return for something of value. So what were the respondents offered? Was there any particular age group responding? Will these people be as responsive to intrusions if the don’t get something they value? Lots of questions remain before using these results to implement a program. There will be a lot more experimentation I am sure and I’ll be interested in seeing the results.
The long-term effectiveness of a marketing campaign like this one is all about content, regardless of the medium and the technology. A fair number of people are willing to receive texts from Wal-Mart, that-s fine–it doesn’t cost them anything and there’s a chance for something of value. To prevent a quick opt-out by these shoppers, Wal-Mart or any other retailer will need to keep the messaging fresh and customized, as much as possible.
Probably more important, they need to avoid land mines like offering snow shoes to customers in Florida (unless that shopper previously purchased skis). Also, timing is important here. Sure, they can experiment with sending orange juice promos mid-afternoon, but like other marketing efforts they have to figure out when the shopper will be most receptive.
I am the Director of Mobile Services at a company that works with a lot of retailers, grocers & CPGs doing text messaging. While I too am curious how Wal-Mart derived the 10% sign up rate, I have seen both higher and lower rates of adoption.
It was certainly a quick adoption as this all started in November. I believe that there is still some consumer fear out there that if they provide their cell phone number, that all kinds of texts will start coming in.
On the flip side of all of this is, today’s consumers are changing; they are more on-the-go than ever and harder to reach through our old bag of marketing tricks. Text appears to me to appeal to four groups of consumers–not determined by age, as we work with clients who target teens and 20s females to both males & females well into their 40s.
1. Your most dedicated shopper and brand enthusiasts.
2. People that are checking their personal email less and less & have become harder to reach but still want to hear from the sender.
3. People who see the convenience and because it’s all opt in the non-intrusive nature of a well executed mobile program. I’ll alsom lump in the just plain curious into this group as well.
4. For CPGs, the opportunity for a consumer to receive information right in store via text is becoming recognized as a valuable tool & there are things that can be done to increase the amount of information contained in a text message such as IVR.
The age of marketers being concerned about consumers being charged to receive a text message should now be over, they opted in and they all know what texts cost to receive. The overall participation rates of this opt-in medium range from 3% – 70%, totally dependent on how the program is structured, opt-in is offered and who the retailer or brand is and what the program is about.
One thing I noticed about Wal-Mart’s program was I signed up but was never notified at the time of sign up that I would receive 3 or 4 text messages each time they sent them out. That really turned me off and I was honestly shocked when I saw that many come through. I’ve never seen it done that way before and can’t imagine a large portion of the consumers without text messaging built into their phone plan enjoyed spending 40 to 60 cents each round of messages.
How about a web address or WAP page where I can view these products from my phone. Or an IVR line with more info to avoid sending so many texts and having to jam up and abbreviate so many words….
Text is here and it works, I know that for sure. There are obviously a range of best practices out there by different companies, but we have yet to have a client not renew their contract with us–and while they don’t always share their results with us, I still think it must pass the ROI test or else it would get canned.
Open your perceptions up a little and explore text with an open mind…you may be surprised what you find.
BTW–There is a much sharper decline in the willingness of any customer over the age of about 52 to participate but I’ve seen people in their early sixties opt into mobile campaigns that require DOB to be entered at time of opt in. See, it’s not just teens and 20s….
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To clarify my response to Evan’s question–I’m not asking whether or not the program exists–just how many people have actually used it and, of those, how many can be viewed as regular users. If it’s such a runaway success, where is the Wal-Mart press release?
The volunteers also volunteered to play along by giving up their mobile numbers in the first place. I heard yesterday about a company that can send text messages to any phone within a 100 meter radius–interesting to try that with customers who are already in the store and see how many converge on the aisle where the sale is. And whether they then agree to receive more messages. Watch out for stampeding shoppers.
My guess is that the 10% who liked getting text messages from Wal-Mart were most likely children who don’t mind being annoyed. Thinking back 30 years, it reminds me of businesses that would advertise over CB radios. It’s kind of a cute thing that started with adults, soon became annoying, and then became a cute form of communication for children.
Actually, Ryan, no one–to my knowledge–has said anything about this being a runaway success. Indeed, the “lessons learned” heading was to indicate that it had rough spots but that it was a learning experience.
The Europeans and tech-savvy Asians have already mastered this. Surely Wal-Mart could learn something from their peers at Asda and get this right.
The key to success in Europe has been opt-in services that include a limit to number of messages and a filter so that the content is specific and directed.
As with everything else, Google will eventually take over and deliver the right message(s) to the right consumer(s).
Interesting thoughts. To Ryan’s point, he wonders why he hasn’t heard about it until now. I can’t speak to that, but we heard about it extensively in December, reported on it back then and saw the Web promos for it. Indeed, here’s a screen capture: Secret In-Store Specials.
As for the merits, the advantage offered to consumers–for free–seems compelling enough. The perception that they will learn of a sale on something they care about in an easy way. If there’s a chance to save some cash on something you want, many thought, why not let Wal-Mart text me? If it gets to be annoying, I can always unsubscribe.
Also, this was during the holiday rush, so a heads up on short duration sales was considered quite attractive.
The concern I have is less about consumers getting fed up (they will), but about Wal-Mart not making this compelling enough. To make it truly work, make this the ONLY way select items are marketed, giving the mobile user a true advantage.
But given that anyone with a cellphone can join, it should be an incentive to collect a lot of cellphone numbers. At that stage, yes, Wal-Mart would need to be very conservative about using the data.
Would they restrain themselves?
Texting is an obvious “new media” way for retailers and marketers to reach their target customers. As with email blasts, however, companies need to ensure that consumers can opt out so that texts don’t become just another form of spam. There are also far-reaching consequences if marketers can partner with cellular carriers to “sponsor” usage to consumers willing to receive texts. The ability to carry paid advertising turns the phone into another ISP like Yahoo or Google…stay tuned over the next few years to see how this trend evolves.
At only 10% “take rate” on the offer, do the math. In order to get “hundreds of thousands” of participants for the text test, Wal-Mart may have used their massive database of millions of shoppers from their web site. Given these are Wal-Mart loyal shoppers already, one could assume that the willingness to participate in a text message program that was designed to save the shoppers some cash would be higher than 10%.
Without knowing where the base of consumers came from, it’s hard to predict if 10% willingness to participate is a predictable average. If anyone is doing real research in this area, please publish, as this is an area of interest across the entire CPG industry!
Not surprising that people were willing to test the concept. The problem is–as with anything–it will get used way too much too quickly and wind up turning off far more consumers than it attracts. If a retailer could only use this type of approach to their top 2 – 3% of consumers then it might work but finding the top 2 – 3% is the problem and in the end will be the downfall.
Retailer text messaging will be most effective for loss leaders. So the retailers will have to measure the cherry-picking skills of their text message recipients. Will the shoppers buy some profitable items on the same trip, or will text messaging just become another way to lose money?
First of all, I want a better source. If hundreds of thousands of people were doing anything, we would have heard about it before now. Or did Wal-Mart swear “hundreds of thousands” of people to secrecy and, if so, can we get them to join the CIA? That said, are people willing to try almost anything new? Yup! Some people are. Will it stick? We don’t know enough to even begin answering that question.
I’m somewhat skeptical how the anonymously reported results from test were arrived at. It’s not easy to believe that hundreds of thousands of consumers actually welcomed the text advertising unless the incentive was unusual or even misinterpreted or misunderstood by the recipient. Let’s wait and see.
Generally in the US consumers are willing to give up information in return for something of value. So what were the respondents offered? Was there any particular age group responding? Will these people be as responsive to intrusions if the don’t get something they value? Lots of questions remain before using these results to implement a program. There will be a lot more experimentation I am sure and I’ll be interested in seeing the results.
The long-term effectiveness of a marketing campaign like this one is all about content, regardless of the medium and the technology. A fair number of people are willing to receive texts from Wal-Mart, that-s fine–it doesn’t cost them anything and there’s a chance for something of value. To prevent a quick opt-out by these shoppers, Wal-Mart or any other retailer will need to keep the messaging fresh and customized, as much as possible.
Probably more important, they need to avoid land mines like offering snow shoes to customers in Florida (unless that shopper previously purchased skis). Also, timing is important here. Sure, they can experiment with sending orange juice promos mid-afternoon, but like other marketing efforts they have to figure out when the shopper will be most receptive.
I am the Director of Mobile Services at a company that works with a lot of retailers, grocers & CPGs doing text messaging. While I too am curious how Wal-Mart derived the 10% sign up rate, I have seen both higher and lower rates of adoption.
It was certainly a quick adoption as this all started in November. I believe that there is still some consumer fear out there that if they provide their cell phone number, that all kinds of texts will start coming in.
On the flip side of all of this is, today’s consumers are changing; they are more on-the-go than ever and harder to reach through our old bag of marketing tricks. Text appears to me to appeal to four groups of consumers–not determined by age, as we work with clients who target teens and 20s females to both males & females well into their 40s.
1. Your most dedicated shopper and brand enthusiasts.
2. People that are checking their personal email less and less & have become harder to reach but still want to hear from the sender.
3. People who see the convenience and because it’s all opt in the non-intrusive nature of a well executed mobile program. I’ll alsom lump in the just plain curious into this group as well.
4. For CPGs, the opportunity for a consumer to receive information right in store via text is becoming recognized as a valuable tool & there are things that can be done to increase the amount of information contained in a text message such as IVR.
The age of marketers being concerned about consumers being charged to receive a text message should now be over, they opted in and they all know what texts cost to receive. The overall participation rates of this opt-in medium range from 3% – 70%, totally dependent on how the program is structured, opt-in is offered and who the retailer or brand is and what the program is about.
One thing I noticed about Wal-Mart’s program was I signed up but was never notified at the time of sign up that I would receive 3 or 4 text messages each time they sent them out. That really turned me off and I was honestly shocked when I saw that many come through. I’ve never seen it done that way before and can’t imagine a large portion of the consumers without text messaging built into their phone plan enjoyed spending 40 to 60 cents each round of messages.
How about a web address or WAP page where I can view these products from my phone. Or an IVR line with more info to avoid sending so many texts and having to jam up and abbreviate so many words….
Text is here and it works, I know that for sure. There are obviously a range of best practices out there by different companies, but we have yet to have a client not renew their contract with us–and while they don’t always share their results with us, I still think it must pass the ROI test or else it would get canned.
Open your perceptions up a little and explore text with an open mind…you may be surprised what you find.
BTW–There is a much sharper decline in the willingness of any customer over the age of about 52 to participate but I’ve seen people in their early sixties opt into mobile campaigns that require DOB to be entered at time of opt in. See, it’s not just teens and 20s….