Last Wednesday, loyalty shoppers at Ring Bros. Marketplace, a store in South Dennis, Mass., received a text message on their cell phones offering a 10% discount on gift baskets for the holidays if they made their purchase that day via phone, Internet or in the store.
In Indianapolis, a few thousand Meijer shoppers have saved some money by receiving text messages from Meijer alerting them whenever gas prices at Meijer pumps will be rising so that they can fill up at the current price.
And members of Slifter.com are able to use their cell phones to determine the location of a nearby retailer selling the holiday gift they covet — and send the information to the cell phone of a family member who might buy the gift.
These and other examples point to the emergence of the cell phone as a marketing tool that offers retailers a new way to communicate with their shoppers. Food retailers are among the merchants, fast-food restaurants and CPG manufacturers beginning to tap the cell phone's text messaging capability to send consenting shoppers information about promotions and events. But mobile marketing is so new that retailers say they are still figuring out how best to leverage the medium.
In addition, cell phones are being developed that will have the capacity to pay in a contactless fashion similar to contactless credit cards that are held near a reader at the POS. That scenario already exists in Japan.
In a report issued last month, “Assessing Sales Opportunities via Cell Phones,” JupiterResearch, New York, estimated that there are 218 million cell phone owners in the U.S., 96 million (44%) of whom have used SMS (short message service) for text messaging, mostly for interpersonal communications.
Last summer Meijer, Grand Rapids, began testing the mobile medium with consumers in the Indianapolis market. Shoppers who signed up on Meijer.com were sent text messages giving them about two hours' notice when the price of gas at Meijer pumps was slated to increase by at least 5 cents per gallon. The program is managed by SmartReply, Irvine, Calif.
So far, about 2,000 shoppers have signed up for the service. “The system works well, and customers have provided positive feedback,” said Stacie Behler, vice president, corporate communications and public affairs, Meijer. “It's an investment in building communication with our customers in a new medium and building Meijer brand loyalty.”
Meijer sent out 20 text messages during an eight-week period in July and August when gas prices were rising frequently, said Dan Jones, vice president, sales and business development, SmartReply. “The opt-ins for the program grew 16-fold over those eight weeks,” he said. Since then, as the price of gas has stabilized, the frequency of messages and the growth of customer participation have decreased, he said.
Meijer clearly communicated on its website that shoppers opting into the program would bear the cost of the text messages, based on what their cell carrier charged. Shoppers can opt out of the program anytime on the website, though fewer than 1% have done so, Jones said. Meijer pays SmartReply about 10 cents per message delivered per customer.
Meijer is continuing the service “indefinitely” in the Indianapolis market and evaluating whether to offer it in other markets. “We are still evaluating the method and the message to determine if customers want this type of message,” Behler said.
In its study, JupiterResearch found that consumer skepticism about receiving promotional offers is high, with 66% of survey respondents saying that “nothing would motivate me to provide my cell phone number to receive promotional offers.” As a result, the research firm advised retailers to tread carefully in these waters, collecting shoppers' cell phone numbers but carefully testing what information they would find valuable to receive in their phones.
Ring Bros. Marketplace, which sends text messages the night before food/wine tasting events and one-day storewide promotions, is cautious about how it handles the medium, noted Pat Ring, son of the owner and manager of grocery/dairy. “We don't want to abuse [text messaging] so we do it once or twice a month.” Very few shoppers have opted out.
Ring Bros. is one of four independents employing a cell phone marketing plan provided by MobileLime, Watertown, Mass. MobileLime has created a loyalty program, using the shopper's cell phone number as a way of identifying the shopper at the POS instead of the traditional plastic loyalty card.
Every two weeks, Ring Bros. emails its loyalty shoppers a list of 100 automatic POS discounts available through the program. It also launched a rewards program in November, offering $50 back for $1,000 in spending over a one-month period.
Broadway Marketplace, an independent in Cambridge, Mass., serving a college population, has been using MobileLime's program for more than a year. The store has signed up about 4,000 shoppers for the program, which has evolved from offering item discounts at the checkout to a cumulative spending/rewards scenario.
“Mobile marketing is a valuable tool to communicate to shoppers, but we needed to pick the right program,” said Charlie Bougas, the store's owner.