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.
Facebook has released a beta version of a new form of messaging to a select few of its 500 million users that has important implications for the digital communication methods of retailers. The new platform allows easy filtering of Facebook messages, SMS, MMS, and emails within a personalized “social inbox” tied directly to each user’s Facebook friends. This platform puts a new premium on the delivery of promotional messages that are relevant, timely, and valued, and those retailers who miss the boat will risk losing the communication channel with their users. The traditional methods of mass-messaging to any email address or phone number on record will no longer be effective; the time is now for retailers to start using point-of-sale software capable of collecting and synthesizing data about their customer preferences and segmentation.
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.
According to a recent study by Deloitte, consumers across the country have changed their buying habits and are now more focused on “cutting spending and saving money” than on shopping as a hobby or loyalty to their favorite brands. This trend has led several major corporations like AT&T and ING Direct to acknowledge the paradigm shift and implement new campaigns based around Customer Experience Management (CEM). One example of a CEM initiative at AT&T is customer service reps now answering calls with the phrase “How can I make you feel like a valued customer today?”, while ING Direct has “opened seven cafes around the country” where their financial brokers will whip up double-shot mochas and cappuccinos while servicing your portfolio; all of this is an attempt by companies to connect with their customers at a more meaningful, personal level. As these CEM programs evolve, it will be very interesting to see how consumer purchase histories and individual profiles are integrated into the process of personalized connections between shopper and brand.
Dunkin Donuts has run marketing campaigns on Facebook in the past by asking their “fans” to design the perfect donut for a chance to win $12,000. This time the Quincy, Massachusetts-based company is seeking the “Ultimate DD Coffee Fan” by offering prizes to Facebook users who put together the best videos explaining why they love Dunkin Donuts coffee more than anyone else. The Grand Prize includes a trip for two to Costa Rica and 60 months of free donuts, with 10 First Prizes of 12 months of free donuts also on the table. The categories they’ve chosen to evaluate the submitted videos by are “Passion for the Dunkin Donuts Brand”, “Overall Video Appeal” and “Originality/Creativity”. This contest is just one piece of the overall efforts that Dunkin Donuts has put into their Facebook marketing campaign as they attempt to catch up to their “Ultimate Coffee-Grinding Rival” in social media; there are currently just over 2 million people who have “liked” Dunkin Donuts, compared to over 14 million for Starbucks. The fact that these promotions are becoming more widespread and a larger part of marketing for major companies is further confirmation that social media has evolved into one of the most powerful tools in a customer relationship management strategy.
The latest iPad-inspired trend? A number of restaurants, including Bone’s in Atlanta have now started to publish their wine lists on the popular Apple gadget. This not only allows diners to scroll through the available selection, but more importantly to read reviews and ratings of the various options as well. Some owners are reporting as high as 11% increases in wine purchases per diner, with no other plausible explanation than the technology shift itself. The tech company behind this new trend, Incentient, also has developed solutions for spectators at stadiums to order food, track stats and buy tickets for upcoming events, and cruise lines or hotels wanting to improve customer service by automating check out, scheduling wake up calls or ordering room service at the touch of a screen. This appears to be a great start for the young Long Island company, but some are already voicing concerns that these iPads could become a distraction to the experiences they’re attempting to enhance. One way to potentially reduce the distraction would be to marry the iPad app with a customer loyalty system specific to each restaurant. This would mean that when you log into the application at the table, it immediately knows what types of wine you’ve selected in the past, what you thought of them, and what you might like to try this time around based on the meal you’re planning to pair it with.
With the economy continuing to cast a cloud on consumers, the number of shoppers basing store and brand selection decisions on price is increasing.
Accordingly, for those retailers who cannot compete on price it is increasingly important to identify new ways to engage with their customer base. It’s unrealistic to expect that operating the business the same way and using the same tools will impact the growing number of price-sensitive shoppers. Personalized marketing is certainly one way to connect with customers, but delivering personalized messaging along with targeted value is a more powerful combination.
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.
Starbucks has tried a variety of media plays in the past (magazines, music) as brand extensions, with varying success. This digital program is a horse of a different stripe, however, and appears to be a platform that will keep the brand in a position to leverage new technology to drive loyalty benefits. It makes their stored value card initiative look positively, well, old-school.
“Imagine a Starbucks patron is reading a review in the free version of the New York Times about a Chardonnay and suddenly their iPhone buzzes. A text coupon arrives in your mobile inbox and you are offered $5 off a wine purchase of $20 or more from a local wine purveyor. The coupon has a timed code and expires in 3 days, nudging you to act. The era of the hyper-relevant advertisement is upon us. And that example is just scratching the surface.”
This is part of a larger, quickly emerging trend of location-based, personalized, opt-in promotions and marketing. A key development appears to that this does not stitch together commodity services like Foursquare, but is retailer-branded and unique to the experience at Starbucks. That has enormous differentiation benefits.
Although it is retailer-specific, the hypothetical contemplates an affiliate program that may – or may not – dilute the underlying purpose of getting people to and keeping them in a Starbucks, but in any case adds a level of operational complexity we won’t likely see in the near future.
We look forward to checking it out – at one of the dozens of Starbucks within shouting distance.
Best Buy announced today that it plans to implement Shopkick technology in about one quarter of its total stores by October 1, 2010. Shopkick, Inc. is a location-based software development company that allows retailers to reward customers with discounts, points and special offers for entering their stores, and also for walking to different departments within the store. This is a major development for Best Buy who have seen their stock price fall by 16% this year and are looking for a way to begin building greater traction among shoppers on tight budgets.
The first release of Best Buy’s Shopkick app will be available only to iPhones, with a Droid version due out later, in 257 of its total 1,010 locations. Clearly the success of this program will depend on customers’ willingness to participate in the “scavenger hunt” that Best Buy and Shopkick have devised, so the depth and breadth of the rewards and special offers should ultimately determine the outcome. Overall, very exciting new technology from Shopkick with virtually limitless potential for driving customer behavior and interaction!