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2008: The Year of Mobile Messaging

BY Deena Amato-mccoy

Mark my words: 2008 will be the year of mobile communications. Sure, it’s a bold prediction. But if retailers can integrate their data-warehouse platforms and consumers’ mobile devices to continue the shopping experience beyond checkout, I expect mobile messages to hit a new level this year.

Approximately 84% of the U.S. population was expected to have a mobile phone by the end of 2007. And this penetration could surpass 100% in 2013, according to a study from SNL Kagan, a division of SNL Financial, a research firm in the financial marketplace.

As more consumers sport cell phones and mobile devices, retailers have a ripe opportunity to step up text message-based promotions. There have already been early attempts, and some have even seen positive results.

For example, Broadway Marketplace’s loyalty program is linked directly to shoppers’ mobile phones. By identifying individual customers via their cell-phone number, the Boston-based grocer delivers personalized rewards directly to members’ cell phones. (The project, which was developed by Watertown, Mass.-based MobileLime, now Modiv Media, earned the 6th Annual Global Retail Achievement Award for Best in Store Innovation in 2006.)

Chicago-based Potash Bros., a two-store supermarket retailer, runs a similar program. Hardees Food Systems, St. Louis, also uses electronic messages to spur sales. Hardees’ diners opt in to receive coupons via e-mail or text message that can be stored on their cell phones or PDAs. To redeem the discounts, guests simply show the electronic coupons to cashiers during checkout.

While text messages are garnering attention from retailers and consumers alike, current programs have only skimmed the surface of mobile marketing.

If retailers really want to use mobile technologies to enhance direct-marketing efforts, they need to unleash the power of customer purchase-behavior data—both during the delivery of the promotion and at the time of redemption.

Retailers have long tapped their robust data repositories to learn about customer preferences and to create relevant marketing messages. Now it is time to take the next step: analyze redemption data to follow up with shoppers.

For example, as shoppers redeem the electronic coupon at point of sale, the retailer needs to add the details of the checkout and coupon-redemption experiences to the consumer’s shopping-history profile. By analyzing this information, chains can determine how to follow up with the customer. This could be through a message that contains a URL for an exit survey or a discount thanking them for their latest purchase.

Regardless of the message, the key is to continue the dialogue—and relationship—with the shopper. Only a rich—and updated—data warehouse will help retailers keep the conversation flowing in a relevant, timely manner.

Clearly, mobile communications hold plenty of potential. But I urge retailers to be cautious: Shoppers have no time for spam. And irrelevant or conflicting messages will be viewed as just that.

The retail industry is undoubtedly ready to make a move beyond mass promotional messages, and mobile devices are making this transition an easy one. However, staying focused on the customer is the name of the game.

So here is one more prediction: Those chains that tap customer intelligence to deliver messages—and follow up with shoppers—clearly will have the upper hand in going mobile.

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Lampert, the Eli Manning of retail?

BY CSA STAFF

HOFFMAN ESTATES, Ill. The New York Giants triumph over the highly favored New England Patriots in the Super Bowl earlier this month, has become an example of coming from the bottom to win it all. Sears Holdings chairman Edward Lampert is one of the latest to use the Giants win, even going as far to compare himself, and the leaders of his company, to quarterback Eli Manning.

The Giants analogy, and Eli Manning comparison, is applied mainly to the company’s Kmart division. In a letter to investors, posted on the Sears Holdings investor relations Web site, Lampert said during Kmart’s bankruptcy in 2002, the unit was “like an undrafted free agent who nobody thought had a chance to play in the big leagues.” Lampert went on to say, “Like Eli Manning, we know what it’s like to be underestimated and questioned, but we intend to keep working on our game to achieve our full potential.”

Sears Holdings reported net income of $426 million, or $3.17 per diluted share, for the fourth quarter ended Feb. 2, compared with net income of $811 million, or $5.27 per diluted share, for the fourth quarter ended Feb. 3, 2007. For the fiscal year ended Feb. 2, 2008, net income was $826 million, or $5.70 per diluted share compared with net income of $1.5 billion, or $9.58 per diluted share, for the fiscal year ended Feb. 3, 2007.

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Circuit City investor seeks to replace board

BY CSA STAFF

RICHMOND, Va. Circuit City Stores today acknowledged that it has received two proposals from shareholder Wattles Capital Management regarding its board of directors. Wattles holds approximately 6.5% of the outstanding shares of the company’s common stock.

Circuit City reported that Wattles proposed the idea of replacing the company’s Circuit City 12-member board of directors with its own nominees. Circuit City said its board of directors will review carefully the shareholder’s proposals and the qualifications of the nominees in accordance with its fiduciary duties, mindful that the proposal would give the shareholder absolute control of the entire board, which would be disproportionate to its relative ownership of the company’s shares.

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