Ace Hardware finds high-value mobile offers are most popular
A group of independently owned Ace Hardware stores saw an overall redemption rate of 14.45 percent for mobile promotions sent during the third and fourth quarters of 2013.
The most popular promotions were high-value offers that all customers would be interested in. FunMobility found that stores with the highest opt-in rates used a variety of strategies to build their customer loyalty lists, including in-store signage and integrated promotions.
“You can use mobile to extend the journey from any existing multichannel marketing touch point,” said Adam Lavine, CEO of FunMobility, Pleasanton, CA. “Anywhere that you are touching the consumer, you can use mobile to continue to that conversation, whether that is through email, broadcast ad, in-store touch, loyalty program, end-cap signage — all of those place you can integrate mobile to extend the conversation.
“Just get their phone number and then you can take that and continue the conversation with the customer and figure out which customers are really the most likely to act and understand their preference and get them to become loyal to your store,” he said.
The results underscore some of the successful tactics for building a mobile database of opt-in users.
In total, the stores signed up nearly 12,000 customers to opt-in to receive offers via their smartphones.
One store added 900 subscribers in 2.5 months with a single self-serve sign-up kiosk.
Another store grew its loyalty list 600 percent in the second month by instituting sign-up contests among their sales associates.
FunMobility also found that 97 percent of Ace Hardware mobile coupon redemptions are for offers toward large purchases.
Some of the most successful promotions included “$10 off a $50 purchase,” “$15 off $75,” and “20 percent off any single item.”
For St. Patrick’s Day, the Ace Hardware stores sent out a themed-spinner that recipients could tap to spin to see what offers they were eligible for. One-third of the customers who received the spinner engaged with it, and one-third of those came into the store to redeem their offer.
The 14.45 percent overall redemption rate for mobile promotions is an improvement over Web-based and print coupons, whose redemption rates average between 1 percent and 11 percent.
The mobile promotions also helped drive up cart sizes.
In the hardware category, the average transaction is $20, but purchases generated by these offers increased the average cart size to over $89.
Now that these stores have built up an opt-in lists they are able to reach back out to these customers to remarket, generate foot traffic and give customers a reason to make large purchases at an Ace Hardware stores versus a big-box competitor.
“The thing that we are seeing now is the benefits of mobile remarketing, and I mean remarketing by SMS,” Mr. Lavine said. “Once you have the list, we are now experimenting with how to drive customers back into the store and to view the effectiveness of using mobile engagement combined with mobile communication to get them to act on again.
“Most companies might ask for your phone number, they may or may not get it legally, they may or may not send a message and if they send a message, it is almost guaranteed they are not attaching dynamic promotion pages to it,” he said.
Chantal Tode is associate editor on Mobile Commerce Daily, New York