In Touch With Retailing

Cell Phone Market: 213 Million Billboards Available for Retailers

By Peter Wolf, Vice President Marketing, Fujitsu Transaction Solutions Inc.

Today, more than 213 million U.S. consumers have a cell phone. This represents more than 69 percent of U.S. households, according to the Cellular Telecommunications and Internet Association (CTIA). Worldwide, the number is more than 2 billion, and each one of these phones has the potential to be your billboard to the consumer. Are you ready to capitalize on this tremendous opportunity?

Marketing through cell phones – “mobile marketing” – consists of a unique and complex mix of technologies, business skills and marketing expertise. It is critical that today’s retailers acknowledge and act upon its potential to profoundly change how they communicate with their customers.

Why is mobile marketing unique and so important? There are a number of characteristics:

• Personal – the cell phone is a very personal device, as unique as the person speaking on it. Just look at the number of ring tones, faceplates, colors, adornment trinkets and carrying cases. People take the devices and make them their own.
• Unique – second only to one’s social security number, the cell phone number is a reliable way to identify each consumer. For example, in the last three years I have lived in three different states. My address has changed, my home phone number has changed, my driver’s license and my physical cell phone handset have changed, but my cell phone number remains the same.
• Immediate – consumers have their cell phones on almost all the time, which enables right-time, right-place, right-content dialogs. And because consumers are in control of their messaging preferences, these communications are not intrusive.
• Consumer Specific – with integration into consumer relationship marketing (CRM) databases, analytical solutions messaging can be data driven and highly relevant to the individual.
• Market Leading – it is not a question of “if,” but “when” mobile marketing is going to become the preferred channel for consumer marketing. According to a recent independent survey of 50 brand name companies, by 2008, 89 percent will use text and multimedia messaging to reach their audience. Innovative and creative retailers will benefit from the newness of the medium, with higher response rates compared to traditional channels.
• Measurable – through the combination of the technology, the uniqueness of the cell phone number and the integration with store systems, the cause and effect of mobile marketing campaigns can be determined with great clarity. In a recent retailer mobile marketing campaign, a 533 percent increase in transactions during a three-hour period can be linked directly to the text messages delivered, read by the consumer and acted upon.

The objectives of mobile marketing campaigns for retailers are straightforward: increase average transactions, drive frequency of visits and improve customer service. Two things are very important to understand: First, mobile marketing does not stand alone; rather, it leverages traditional promotional channels, such as print, email, Web, radio and television. Second, the intimacy of the mobile channel demands that all practitioners adhere to the best practice guidelines of Choice, Control, Customization, Consideration, Constraint and Confidentiality.

To illustrate the power of mobile marketing, consider the following example. An upscale grocery store in the northeast recently hosted a vendor-sponsored tasting event in its wine department. The event was scheduled on a Thursday at 7 p.m. The Monday before the event, the retailer and partners sent email communications to their customers who had opted-in to receive notification of events in the wine department. On Thursday at 2 p.m., they sent a text message reminder to the more than 1000 customers who had opted-in. The message simply reminded the consumer of the event and that all products from this vendor would be 20 percent off that evening only. The results: a 133 percent increase in transactions over similar past events.

This is just one example of how mobile marketing will change the retail landscape. How will you reach those 213 million billboards?