Retail
Tag-Along Marketing
As of August, only 4 percent of American adults who used the Internet also used location-based services, which allow people to “check in” to physical locations via their cellphones to earn coupons or keep up with friends, the Pew Research Center’s Internet and American Life Project reported last week. And only 1 percent of Internet users are on such services on any given day, an indication that those who do use the services still have not integrated them into their daily lives.
On any given day, 1 percent of adult Americans use a service that allows them to share their location, according to the report. Four percent of adult Internet users use location-based services at all, down from 5 percent of Internet users who said they used such services in May. Only 6 percent of people who use social networking sites also used location-based services.
People using location-based services fit the profile of any early adopter of new technologies, said Kathryn Zickuhr, the author of the report.
Men were twice as likely as women to use location-based services, and people between 18 and 29 years old were more than twice as likely to use them as any other adult age group. The Pew report did not include data on teenagers.
Ten percent of Hispanics reported using location-based services, compared with 5 percent of blacks and 3 percent of whites.
Ms. Zickuhr said she was surprised at how companies building location into their business plans seemed to be far ahead of people using such services in their day-to-day lives.
Still, companies like Foursquare and Gowalla, two of the leaders in the location-based services market, have had no trouble raising money from investors. Advertisers are on track to spend $1.8 billion on location-based marketing in 2015, according to ABI Research, a technology market research firm.
And last week, Facebook announced that it would allow retailers to offer coupons and special deals through its own location-based service, Places, which it introduced in August.
How did businesses get so far ahead of consumers on this idea? And will consumers ever catch up?
In order to answer this question, it helps to understand how technology companies make money by providing free services. When a customer buys a toothbrush from a drugstore, she pays with cash; when the same customer creates a social-networking profile on Facebook, the currency she uses is her personal data.
Specific user data is valuable to advertisers because it allows them to target their marketing efforts more effectively. With social networking, hundreds of millions of people are willing to provide access to that data in exchange for a service they find useful, even while many express concerns about their privacy.
“Many people are in a more ‘transactional’ frame of mind” when it comes to their personal information, said Lee Rainie, the director of the Internet and American Life Project. “They will share information if they think they can get something of value for it.”
Data about a person’s physical location would be immensely valuable to marketers and retailers, say analysts. But sharing information about where you are can seem creepy or, worse, dangerous, as the Web site Please Rob Me showed earlier this year when it demonstrated how easy it would be for potential thieves to use social networks to find homes whose occupants were away.
Meanwhile, the upside of the transaction is unclear to many people, said Melissa Parrish, an analyst at Forrester Research. None of the efforts so far have reached the “sweet spot of coolness and utility” that will get people to share their data, she said.
Josh Williams, a founder of Gowalla, agreed, describing the way that location-based services are pitched as “nerdy and often off-putting.”
Mr. Williams said Facebook’s efforts would show people an upside to location via special offers on shopping through its Deals program. His company and others are working on less tangible benefits, like providing an opportunity to connect with friends in the physical world. He acknowledged that the companies still had to show people the point of all this.
“As an industry, it behooves ourselves to look for more human ways to explain what we’re doing,” he said.
Millennial Media: 82M Users On The Mobile Web, Finance Vertical Grows 800%
Millennial Media has published its S.M.A.R.T report for the month of September, detailing stats from Q3 as seen from its unique audience reach of 73.5M users — or roughly 8 out of 10 mobile Web users.
Starting with general stats, Millennial reports the US mobile Web increased by approximately 3% since its last report, growing from 80M in August to over 82M in September. Other quick stats include 12% of advertisers on Millennial’s network used rich media elements in their campaigns during Q3 — up significantly from the start of the year — showing advertisers are broadening their strategy as smartphones and more capable devices continue to proliferate.
With October being Breast Cancer Awareness month, advertisers are focusing on how to reach women. As such, this month’s report details findings from InsightExpress’ Q2 2010 Digital Consumer Portrait, which focused on moms and how they engage with mobile. The findings show 32% of moms own a smartphone in 2010, a surprisingly high number if you ask me, which is up significantly from the 20% reported in 2009 — a 60% increase year-over-year. Thirty-two percent of moms also said they use the mobile Web at least once per week in 2010, compared to just 20% in 2009 — again, a 60% increase.
In terms of the verticals represented on Millennial’s network, several continue to see substantial increases. Six advertising verticals saw triple-digit year-over-year growth, and surprisingly, the verticals that have experienced this tremendous growth were all in the Top 10 AdvertisingVertical Ranking in Q3 2009 as well. For example, entertainment claimed the number one spot in Q3, showing growth of 315% year-over-year. The finance vertical has seen explosive growth as well, posting a whopping 800% growth year-over-year, while retail and restaurants showed an impressive growth rate of 745% as well. In all, nearly all verticals being represented via mobile advertising have grown significantly, with no signs of slowing down any time soon.
As usual, much more information, data points and visual representations are available in the actual report, which can be downloaded here.
Mobile Users Prefer Mobile Web not Apps
Even though mobile apps seem to get all the attention these days, consumer sentiment towards the debate between apps vs. the mobile Web show preference for the latter, in a big way.
eMarketer came out with data yesterday detailing a poll by Keynote Systems for Adobe that shows overwhelming consumer preference for mobile browsers to access virtually all mobile content. Games, music and social media were the only categories in which users would rather use a downloaded app than browse the mobile Web.
The retail category in particular shows an overwhelming preference for mobile Web access across nearly all mobile shopping tasks mentioned. Whether it was researching product and price info or sharing that information socially, mobile users would rather fire up a browser than a dedicated app. Interestingly, When the Adobe survey asked about a preference for using regular or mobile-optimized websites on their mobile device, they preferred regular sites in both the consumer products-shopping and media-entertainment categories.
According to the report, this preference suggests “a low awareness of optimized experiences for the mobile web,” but users could also be frustrated with the limited functionality many mobile-optimized sites provide. These results fall in line with most marketers in the retail space who say mobile apps don’t make sense for brand retailers. For example, during his keynote at the Mobile Shopping Summit in New York recently, a Kenneth Cole executive said that — especially with the rise of HTML5 — his company’s focus is on the mobile Web going forward.
“Looking at the mobile sites of mass merchants, look-up sites and brand retailers, they are all using different design templates and tactics to get their message across,” said Tom Davis, vice president of ecommerce at Kenneth Cole Productions. “This year we put our toe in the water, but we expect sales driven by mobile devices to be bigger than some of our bricks-and-mortar stores.
New Data on Mobile Marketing Alerts
Today Placecast announced the release of their second wave of research conducted by Harris Interactive that dives deeper into consumer receptivity to opt-in mobile marketing and the potential impact for retailers. Overall, consumer receptivity to opt-in mobile marketing is growing, as is its ability to increase intent to visit stores. One-third of Americans who currently have signed up for mobile marketing alerts indicate that such services impact their decision to go into stores and 27% report that mobile programs have impacted their decision to buy products in physical retail locations. (Please click here to request more information covered in this study).
During the summer of 2009, we conducted the first survey on location-based mobile marketing and advertising, which forms the baseline for this research. Since that first survey, we have seen that overall consumer interest in such programs increased with ‘somewhat interested’ consumers growing by 2 percent to 28% of all cell phone owners. As in the first survey, interest is most pronounced among the youngest cell phone owners: 42% of those ages 18–34 are at least somewhat interested. Interest grew 6 points to 40% among women ages 18–34 from the survey conducted in 2009. Interest levels between men and women are now about equal overall.
Consumers vote with their stomachs Groceries (68%), national restaurant chains (64%), and fast-food items (50%) took three of the top four most popular segments for those who are at least somewhat receptive to overall opt-in mobile marketing, with a host of other categories also seeing strong interest.
Women skewed higher than men when it came to interest in offers/promotions for groceries and apparel, while men skewed higher in interest for electronics and sporting goods products:
Texting significantly more valued than app-based services One of the most interesting data points in this study across all cell phone owners is the importance of texting: it is still an overwhelmingly popular activity on mobile vs. other activities. An average of 40% of all cell phone owners say that texting is “extremely” or “very important” to them. Even with the buzz of services like Foursquare and Gowalla, only 7% of men and 3% of women showed the same level of interest in these types of social networks
With check-in services only available on smart phones (which comprise roughly 21% of all mobile phones in the U.S.), reach for marketers through these platforms is still a question. Furthermore, both consumers and marketers see texting as similar mechanisms to email, which has made a substantial impact on purchase behavior— both online and in brick-and-mortar stores. 
Incorporating location—the ability to make messages even more relevant based on where users are and when they are there—is consistently seen as a valuable service by consumers and is easy for marketers to execute at scale.
Methodology This survey was conducted online within the United States by Harris Interactive on behalf of Placecast from May 17–19, 2010 among 2,046 U.S. adults ages 18+, of whom 1,710 own a cell phone and/or a smartphone. For complete survey methodology, including weighting variables, please contact us here.
Retailers Escalate Plans For Mobile Commerce Sites
A survey by Internet Retailer, conducted in August with readers of its IRNewsLink e-newsletter, in conjunction with survey firm Vovici Corp., of 149 chain retailers, web-only merchants, catalog companies and consumer brand manufacturers, finds that today only 8.8% of retail organizations operate a mobile commerce site, but 75.9% of retailers expect to launch a mobile commerce site. Of those, 31.9% expect to be selling through mobile phones in under six months and another 52.6% in less than one year.
Those aggressive plans reflect the high expectations for the mobile channel. The report projects that mobile commerce could generate U.S. sales of $23.4 billion by 2015, up 875% from an estimated $2.4 billion in 2010.
Mark Beccue, a senior analyst with Allied Business Intelligence Inc., says “If online retailers haven’t developed a sense of urgency about mobile commerce yet, they need to… ”
The report says that:
- 34.5% of merchants have delayed implementing mobile commerce because of other e-commerce priorities
- 30.4% because of limited funding
- 23% lack mobile design, development and programming expertise
Beccue points out, however, that “…getting up and running with mobile commerce can be easier to implement than the commitment to the amount of time and money needed to sustain a major e-commerce site… ”
The survey reveals that only 5.9% of merchants are generating annual mobile sales of over $10 million, while 64.7% of merchants have annual mobile retail sales of $250,000 or less, including 50% under $50,000.
Average ticket and conversion rates are below the average ticket of $197 and conversion rate of 3.5% of merchants listed in the Internet Retailer Top 500 Guide. The survey of 79 web-only merchants, 33 chain retailers, 23 consumer brand manufacturers and 14 catalogers finds that:
- 71% of responding companies had an average ticket of $100 or less, including 29% under $50.
- Conversion rates on mobile commerce sites also are modest-under 1% for 23.3% of merchants reported conversion rates under 1%
- 53.3% are under 2%
Retailers have clear mobile commerce goals in mind, the survey notes:
- 39.1% of companies cite attracting more visitors and shoppers and generating more sales as their main business objectives
- 13.5% want to generate a higher sales conversion
- 12.8% plan to improve marketing and merchandising
- 12.2% want to increase multichannel sales
- 10.1% want to improve customer service
Most merchants are building, or expect to build, their mobile commerce program on only a modest budget. Only 25.8% of merchants taking part in the Internet Retailer survey have an annual mobile commerce budget that’s greater than $200,000. In comparison, 61.3% expect to spend no more than $50,000.
51.5% of all participants in the Internet Retailer survey used an outside vendor first to build and then maintain their mobile commerce sites, and 53.1% hired an outside firm to develop their mobile apps.
The report includes a quotation from Mark Pierce, CEO of MarketLive Inc, suggesting that for retailers with an established e-commerce site, a version optimized for smart phones and the iPad can be launched in as soon as 30 days at a cost of $20,000 to $30,000, while a mobile app can also be developed in about two months, but at a more significant cost of between $50,000 to $150,000.
With many top retailing executives involving themselves in the process, mobile commerce will become more of a strategic priority, especially at bigger companies with established multichannel brands, says
The report concludes with Pierce’s observation that “… Mobile commerce will be a game changer!”
For the complete article from Internet Retailer, please visit here.
Magento Dives Into Mobile Commerce With New White-Label Solution
Magento, a provider of comprehensive open source eCommerce Web solutions, announced today that it’s debuting a new white-label mobile app offering to help customers using its Web platform enter the mobile commerce sector as well.
Magento identified the problem of many Online retailers not wanting to bother with creating their own mobile strategy, which most likely involves costly mobile application development for numerous platforms. Since its customers are already familiar with the Magento platform for their Online store fronts, the white-label solution aims to fill a void and make it easier for retailers to enter the mobile realm.
Launching as Magento Mobile for the iPhone platform, the solution essentially translates an existing e-commerce site into a mobile app that fits each device, complete with a full catalog, product search, a shopping cart, ratings, and reviews. Support for Android and iPad are in the works as well. The retailer has full control over the appearance of the app and even includes full PayPal support for checkouts.
Down the road, Magento plans to add additional functionality such as barcode scanning, private sales, A/B testing, and analytics. Magento charges an $800 set-up fee and then a $700 annual fee for the service, which many retailers will be glad to pay to avoid the headache associated with going it alone, especially when it would involve hooking in a comprehensive back-end like Magento already provides.
M-Commerce features offered by US multichannel retailers
M-Commerce features offered by US multichannel retailers
As more in-store shoppers—especially millennials, who are used to turning to their mobile phone to stay connected anytime, anywhere—become mobile web users, demand for an in-store experience that takes advantage of web capabilities will only grow.
“In developing a mobile commerce program, a retailer should look ahead as well as think broadly,” said Mr. Grau.
“Looking ahead means not getting locked into a platform with a set of technical capabilities that cannot expand to meet new requirements,” he explained. “Thinking broadly involves fitting mobile commerce into a multichannel strategy where channels support one another so that the total effect is greater than the sum of the parts.”
Mobile Marketing Gaining Ground Among Retailers
US retailers are actively pursuing the mobile channel to enhance customer engagement and loyalty: 73% have some type of mobile initiative in place and 20% of are in the process of evaluating the mobile channel, according to a survey from Forbes Insights, in association with Research In Motion (RIM).
Fully one-third of surveyed retail executives describe their early mobile efforts as either widely implemented (10%) or rapidly expanding (24%).
Nearly one-half of retailers (47%) say they want to capture “first-mover advantage” as their customers go mobile, whereas 23% say they are adopting mobile to keep up with their competitors and 20% are taking an incremental approach to the mobile channel.
Below, other findings from the study, Retail’s Mobility Imperative, which surveyed more than 300 executives at top US retailers.
Retailers are now at varying levels of sophistication in their mobile efforts. Fundamental tactics such as mobile ads (35%) and mobile websites (36%) are the most common, while other retailers are moving into more customer service-related applications (33%) and transaction-based tactics, such as mobile coupons (29%).
