The location based services leader Foursquare has teamed up with American Express to offer Groupon-like discounts to users who check-in at participating retailers, such as $10 for the price of $5. In effect, the hope is that this type of real-life connectivity will draw more interest from retailers looking to increase customer engagement and encourage trips to their locations by leveraging LBS.
Early feedback on the benefits and functionality appears very positive, particularly from consumers. The potential applications for this type of LBS-payment duality are virtually limitless, and could be particularly interesting for grocery retailers looking to drive increases in customer traffic and encourage consumers to explore new areas of their store. Imagine a grocer who offered a similar promotion where shoppers could earn $5 in their personalized digital wallet, to be spent anytime they chose, for checking in at their location and then scanning the barcode of a certain product or group of products. With Accelitec software much of this is possible today, and could be a very powerful way for brands and retailers to cooperate in the launches of new products, while simultaneously rewarding their customers and driving loyalty to the brands and retailers alike.
Nielsen reported today that the Google Android operating system is now controlling 29% of the US Market, with Apple and Research in Motion (RIM) sharing second place with 27% apiece. For many analysts, this news comes as no surprise given that unlike the iPhone, the Droid is available on myriad devices and networks, and consumers have been moving away from RIM’s Blackberry for several quarters running.
The piece of news that does qualify as somewhat unexpected is Microsoft’s Windows Mobile and Windows Phone 7 falling to 10% of the US Market. This result comes on the heels of their $400m investment in the launch of their new mobile efforts. Their market share in the previous three quarters stood at 18%, 15%, and 14% respectively, and this figure raises some serious questions about their ability to compete in the smartphone space. The folks in Redmond also recently announced a partnership with Nokia, as well as the launch of Bing mobile, now with the ability to aggregate location-specific deals for users. The question is will these recent efforts from Microsoft deliver any meaningful results in the way of smartphone market traction? Or is this quickly becoming a classic case of throwing good money after bad?
Big news this week as Starbucks coffee drinkers can now use their smartphones as a payment method at nearly 6,800 of the Seattle-based coffee shops nationwide. The app allows users to attach Starbucks giftcards to a user’s Blackberry or iPhone and then scan a barcode on their phone at the point of sale, and can also be charged with value via PayPal or any major credit cards. The message coming out of Starbucks HQ seems to be that they’ve opted for a barcode-based payment system today, but are planning to take this technology in some pretty interesting directions, such as Near Field Communication (NFC) in the future. Starbucks also has the ability to add value to its customers reward cards for taking surveys, and will now presumably be able to complete this entire process of presenting a survey offer, accepting customer responses, adding value to the customer loyalty app and accepting payment all on a single smartphone. The functionality being utilized for this rewards app is very similar to the Digital Wallet software available from companies like Google and Accelitec, and the fact that Starbucks has now taken the lead should serve as sign to other brands and retailers that now is the ideal time to be targeting customer loyalty by creating and launching rewards applications for smartphones.
This weeks sign of the times has to be the news that eBay saw their sales via mobile devices rise from $600mm to over $2b in 2010. The apps, which are available for the iPhone, Android, Blackberry and Windows Phone 7 operating systems, have been downloaded by over 30 million people in more than 190 countries. Interestingly, the UK has been the fastest Eurpoean adopter of eBay’s mobile app, and combined with Germany they “generated nearly one third of all eBay’s mobile sales in 2010“. According to eBay, every minute there are 94 bids made for various products and 13 items of clothing/shoes/accessories are purchased. This really highlights the growing trend for consumers to do their shopping online and should resonate loud and clear with traditional, brick and mortar retailers.
The message being sent by the market is very clear – develop an online/mobile presence so that our shopping experiences are as fast and painless as possible, or we’ll buy from someone else who can. We’re already seeing the response to this trend from macro retailers like Target, Safeway and BestBuy with their expanding presences on Facebook, mobile applications, and location based services like Shopkick and Foursquare. For the mid-size and smaller retailers who are losing the tech-race, the time is now to start implementing solutions like the Accelitec software suite if they hope to close this growing gap and ultimately start winning back a percentage of these sales lost to online retailers.
CKE Restaurants, which owns Carl’s Jr and Hardee’s, has an iPhone/Android app that allows people to check-in at their local fast food locations to be rewarded with a chance to win free stuff. The interface is very clean and at first glance the prizes appear to be pretty substantial, including anything from a dollar off your next soda to free burgers. The Wheel of Awesome, which is also available on both companies’ Facebook pages, is able to ramp up the rewards that an individual is eligible to win based on their frequency of application usage. Once a coupon has been awarded, the winner has 7 days to redeem it by showing their “winning ticket” at the point of sale. This is a great example of a way for restaurants/retailers/grocers to reward their customers through location based services, leverage the functionality of social media, and ultimately increase brand awareness and customer loyalty by applying a simple and fun ‘game-layer’ to what would otherwise be ordinary, everyday coupons.
It was announced this week that Google acquired Zetawire, a Toronto-based mobile payments-focused startup, in August. This is important and revealing news for anyone trying to understand the long-term mobile strategy for the Silicon Valley search engine behemoth. It’s widely known that the latest version of the Google Android mobile OS, known as 2.3 or “Gingerbread”, has been designed to include the functionality of a digital wallet for users to store value; Zetawire is a natural augmentation to the digital wallet because they bring vital pieces like NFC (Near Field Communication) and payments transactions into the fold. There isn’t a great deal of information available on the startup in question, but we do know that they had several very important patents around mobile banking, identity management and credit card/mobile coupon transaction processing - all of which points directly to the idea that Google is attempting to turn smartphones running on their OS into virtual, digital wallets. With Google now officially stepping into the mobile payments and LBS space, retailers need to keep an eye on ways to enhance their business by incentivizing and engaging customers in/around their stores via Android smartphones.
Safeway launched a pilot customer loyalty program this week at 300 of its Vons grocery stores in Southern California, combining location based services from Foursquare and special offers from PepsiCo. The results of this trial will have very important implications for the customer loyalty programs of retailers everywhere; if these three companies can prove out this “check-in” loyalty model, then we should expect to see many others like it across all types of retail.
The most glaring omission from this pilot program is the lack of a digital wallet tied to individual customer loyalty accounts, which would allow for the check-in reward to be processed and realized without requiring the shopper to do anything beyond simply checking in via Foursquare. Ultimately it seems that LBS and customer loyalty programs are a natural fit, but this most recent model is still a few steps away from realizing its full potential.
Last weekend Bi-Lo sent out a College Football-themed text message promotion to 6,000 shoppers in Columbia, SC, prompting them with ways to throw a great tailgate or house party before the big University of South Carolina vs. University of Alabama game. Incredibly, these text messages were opened by 38% of the recipients, all of whom had opted into the mailing list, without offering any coupons or material discounts in their stores. It would be very interesting to look at what the great response in people reading the texts translated to in terms of promotion-related sales dollars, but the number of people who read the message highlights the power of relevant and timely interaction; when retailers can provide their customers with useful information, exactly when they need it, those customers are exponentially more likely to listen and react.
iPhone owners with $.99 can now consolidate all of their loyalty, membership and insurance cards in one place – their smartphones. Scanaroo is available in the iTunes Store and lets users shed the majority of the plastic cards in their wallets and on their keychains with the goal of making life easier and simpler. The next step is aggregating purchasing history data and then allowing complimentary companies to reward customers simultaneously via social media; a member of Gold’s Gym buys a double cheeseburger at McDonalds and gets a Facebook message addressed from their personal trainer offering them a month of free membership if they sign up for a new pilates class; a family rents a movie on Netflix and are instantly offered a special on 2 large pizzas and a 2 liter soda from their local Little Caesars.
Meijer has now joined the ranks of Android Application developers with its release of “Find It”. Functionality includes a map of the store layout, locations of various sale items, promotion details and even the ability to locate your car in the parking lot once you’ve finished shopping. The technology in and of itself is really not pushing the envelope in the mobile space, but this type of functionality is fairly cutting edge for the grocery industry. What remains to be seen is whether they can not only draw their customers to use the app, but more importantly keep them using it on subsequent visits to the store with the right blend of relevant, timely rewards and useful information.