Retailers’ promotional strategies get mobile makeover with bigger lifecycle focus
Retailers typically open the promotional floodgates during the holiday shopping season and, over the past few years, have mostly translated what works on desktop for mobile. However, this year, mobile promotions will do a better job of taking advantage of the unique characteristics and use case of smartphones, from personalized flash sales to post-purchase incentives to share on social media.
“Previously, promotional dollars have been all about getting somebody to buy something,” said Jeff Simpson, director of Deloitte Consulting LLP’s retail practice. “But the retailers that we work have come to the realization that mobile is certainly a commerce channel, but it also has a profound impact on some of the other channels.
“So, rather than applying a promotion to get you to buy something, how can I apply promotion to get the behaviors like sharing, pinning as well transacting,” he said. “That is very different from what we saw 12 months ago. Mobile was still all about how do I get more coupons, how do I get mobile conversion up.
“Now, I am having fewer of those conversations. It is, how do I leverage mobile to drive some of the other things that are happening.”
According to a recent report from Deloitte, consumers who shop across store, mobile and online channels are expected to spend 66 percent more on gifts than those shopping stores only, $592 versus $357.
Additionally, 74 percent say they will be influenced by coupons/promotions.
The findings underscore the importance of promotions delivered on mobile that influence online shopping or drive in-store traffic.
In the early days of mobile, retailers thought in terms of taking whatever promotion they were pushing via direct mail or email and figuring out how best to push it out on consumers’ smartphones.
However, these days, retailers increasingly understand that mobile is more than just a channel.
As a result, they are thinking more in terms of how mobile is influencing the purchase journey and how to use mobile at specific points in the journey to produce a result.
This means there are more promotions that are not so blatantly sales-driven, with the type of offers being delivered looking very different depending on which stage of the purchase journey a shopper is in.
For example, when shoppers are in the inspiration stage and browsing social media sites, retailers can provide a promotion to get shoppers to engage with the brand. Once shoppers are in the transaction stage, this is the time to push out a coupon or free-shipping offer.
One strategy more retailers could adopt this year is to use a promotion post-purchase to incent mobile customers to share the purchase on a social media site or write a review. The incentive at this stage is likely to be different, such as rewarding a customer who is a loyalty member with points, for example.
Another strategy would be to give these customers access to an assortment that has not been make widely available yet.
The post-purchase promotional strategy takes advantage of how consumers are using mobile, with social sharing one of the most popular activities, while helping retailers to continue to promote themselves and hopefully pull in purchases from other consumers.
Previously, retailers would have been thinking more about the next transaction-oriented promotion.
“Now, retailers are thinking, especially in mobile, far more about the lifecycle,” Mr. Simpson said. “Someone just made a purchase from me, their likelihood of buying something in the next two or three days is probably pretty low.
“But I can use the promotional cadence to incent a whole different set of behaviors, things like sharing and telling my friends what kind of a experience they’ve had, is a very different application or promotion and markdown than previously,” he said.
Since a lot of retailers still do not have their backend operations integrated, this type of promotional activity is being done on an adhoc basis rather than in real-time. For example, a retailer might pull out all of the shoppers who made a purchase one day and not send these customers the next day’s scheduled promotional email.
Instead, these customers would receive an email with an offer to share on social.
Another mobile-driven promotional strategy is the flash sale, which a number of retailers jumped on board with last year.
This year, there is likely to be even more flash sales, as they meet the on-the-go, quick-hit shopping style of smartphone shoppers.
The difference this year is likely to be that flash sales will be more personalized.
For example, a department store could create groups of its best shoe customers and cosmetics customers and send each information about flash sales that reflect their past purchases. This is a significantly different experience than lining up in front of a retailer’s doors to take advantage of the 48-inch flat screen television door buster deal on Black Friday.
“Flash sales will again be a big driver this year in many categories,” said Allan Haims, CEO and founder of StepsAway. “Airline promos, exclusive hotel deals and time-sensitive product promotions are set to drive impulse buys and market share.
Driving shoppers into stores is likely to play an important role in mobile promotions this year.
Not only are consumers carrying smartphones with them everywhere, but a growing number are researching purchases online from these devices before making a purchase in store
A recent G/O Digital report found that 45 percent of holiday shoppers plan to use their mobile devices for shopping-related research on Black Friday, Thanksgiving and Cyber Monday. Plus, 54 percent claim those mobile searches would positively influence their in-store purchase decisions during the Thanksgiving holiday weekend.
“The retail landscape is shifting yet again to a place where webrooming – also known as ‘reverse showrooming’ – now sits at a critical intersection of the digital and physical worlds and will bring shoppers into stores this holiday season,” said Jeff Fagel, chief marketing officer of G/O Digital.
“While showrooming is centered on price, webrooming is all about discovery,” he said. “It’s no longer about putting up silos and walls to separate digital and brick-and-mortar experiences.
“Success this holiday season – and beyond – will come down to merging the two through the use of personalized content, real-time mobile marketing and local activation of digital video.”
Chantal Tode is senior editor on Mobile Commerce Daily, New York