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Posted Date: 9/23/2009

MOBILE DIGITAL MARKETING - RIDE THE WAVE, AVOID THE WIPEOUT

contributed by Sinan Gurman, Principal, Retail & Consumer Goods Practice  & Joydeep K. Haldar, Principal and Client Engagement Manager for Retail CPG & Logistics Business Unit , Infosys.

The term "Digital Marketing" has emerged ever since the popularity of the internet. It includes a wide variety of topics, tools and technologies such as blogging, e-mail marketing, micro blogging, social networking, viral marketing, search engine optimization, pay per click, pay per impression, video marketing, user generated content and the list goes on and on.

However, the recent proliferation of smarter and faster mobile phones has crystallized and solidified mobile as the "channel" that will take center-stage for most applications of digital marketing. It is truly poised as emerging from the shadows of the ".com" and becoming a "force majeure." Mobile advertising has grown 45 percent in 20081 compared to 11 percent growth in on-line advertising2 and mobile is expected to grow significantly faster than the web while traditional marketing channels such as TV, radio and print are either flattening or diminishing1&2.

In a world dominated by online and mobile device usage, the mobile channel is very unique as it is a personal medium that allows for a very intimate relationship with the customer. It is closer to the point of sale than any other digital channel, especially for the apparel industry where customers prefer to "touch, feel and try on" before making a purchase. And it has the ability to offer an unmatched convenience to today's customer who wants it here, wants it now and wants to share. There is a big opportunity, especially for apparel retailers, for offering more value and convenience to shoppers and therefore driving digital loyalty.

Digital Loyalty - Give me WHAT I want, WHEN I want, WHERE I want it and make it more CONVENIENT!

Digital marketing is moving toward a pull avatar for retailers, whereas push campaigns have certain fragility issues regarding privacy. Building an "emotional" connect with the customer is amongst the top three strategic goals for most fashion/apparel retailers. Fundamental to the success for a pull-based campaign is to cater to an individual's need and to call customers for action to opt-in. Or even for double opt-in. As we call customers to opt-in to a mobile service, functionalities that capture the moment of desire to own something and offering a convenient way to purchase it provide great advantages.

For example, have you ever heard a song and want to have it but didn't know who sings it? With the push of a button, one of the most popular free iPhone applications, "Shazam," listens to the song and finds the artist and track name. It also provides a link to buy the song in iTunes or to watch related videos on YouTube with your iPhone. What if we had an application that enabled customers to purchase a dress or a shoe that they liked while watching the "Oscars" award ceremony on YouTube? Would it be more effective than a SMS text message simply promoting the same product?

Mobile Marketing 2.0 - making it happen

SMS, WAP, MMS, mobile-friendly websites and mobile applications are some of the most commonly used mobile marketing tactics and technologies, each of them with different purposes and use. Mobile friendly websites can effectively engage customers but lack the quality and richness that may be necessary for certain interactions. Mobile applications on the other hand have the advantage in terms of the rich media, speed and engagement levels with customers. Although we acknowledge the need to utilize simpler approaches (SMS, WAP, etc.), depending on the use and desired engagement level with shoppers, due to its advantages, we would like to highlight some critical strategic factors for digital marketing campaigns deployed through mobile applications.

Branded applications vs. Syndicated (Generic) applications: Retailers need to consider the decision of creating their own branded mobile services vs. creating a unique digital brand image as part of generic mobile services. This is a strategic decision with multiple critical implications.



  • Convenience to Digital Shopper: For example, in the case of digital offers and coupons that can be clipped into a digital wallet and electronically redeemed at the POS through a loyalty card, syndicated services provide a greater convenience vs. consumers having to work with 10 different applications from 10 different retailers. One-stop applications that consolidate mobile services across brands and retailers have the advantage of providing more convenience to digital shoppers. 
  • Market Reach: Syndicated applications also have the advantage over branded applications in terms of reaching out to larger consumer markets. This is simply due to utilization of more distribution channels including all participating retailers' and brands' marketing channels as well as their own channels.
  • 1:1 Marketing: Most generic mobile marketing applications today do not have capabilities to target consumers based on demographics, shopping history or geography. For example, Cellfire, which is a mobile coupon service, offers same coupons to all shoppers located anywhere in the United States. Several large retailers, on the other hand, are developing their own branded applications for enabling more targeted 1:1 marketing.
  • Total Cost of Ownership & Time to Market: Every marketer has a "cool" idea to take into the digital world but time-to-market and cost of entry can be overwhelming. Generic applications have a significant advantage over branded applications in terms of lower cost and faster time-to-market; however, out-of-the-box functionality of generic applications may not fit the requirements in many cases.
  • Custom Widget and Functionality Development: Ability to create unique functionality based on each retailer's go-to-market strategy and business model is crucial but most generic mobile applications do not support this capability.
  • Intellectual Property (IP) & Customer Data Privacy: The way retailers cluster their consumers and unique marketing strategies targeted to these segments or "personas" are important pieces of a retailers' intellectual property and therefore it is extremely confidential. While internally developed (branded) applications ensure the protection of strategic assets, generic application providers need to find out creative ways of addressing this issue.
  • Large Integration Capability: Mobile marketing strategy should be in sync with overall digital and traditional marketing strategies and events and the efficient management of this process requires mobile applications to be integrated in larger CRM systems. However, most application providers lack large integration capabilities.
  • Shopper Loyalty: Several factors mentioned above, such as convenience, 1:1 marketing and custom functionalities (widgets) are key drivers to create shopper loyalty and no branded or generic application provides the best approach across these areas for creating shopper loyalty. Branded applications can drive more loyalty, however lack the larger market reach as mentioned above.
In order to utilize the advantages of both branded and generic approaches and to avoid the shortcomings of both, we suggest a hybrid approach, in which a generic application with certain out-of-the-box functionality can be customized for retailers' needs and integrated into larger CRM programs. This approach reduces the total cost of ownership and time to market, generates direct ad revenue for retailers while protecting retailers' IP and customer data privacy. It can also be branded based on shopper loyalty preferences and through sponsored widgets, while taking advantage of the high market reach potential of a generic mobile service.

Digital and physical stores converge with use of mobile phones. Measuring the effectiveness of digital marketing programs in the physical world through automated analytics and insights is a key capability for continuous learning and improvement of future programs. What if we can measure the impact of digital programs in the physical world? What if we can get closer to understanding every unique customer's experience with our products each time and every time?

What if we have a personal fashion concierge recommending the coolest fashions and looks, with the knowledge of one's personal digital closet, wish and shopping lists and preferences? What if we can also influence, cross-sell, up-sell and increase basket size and share of wallet with a mobile coupon and a convenient electronic redemption service at the POS? And what if we can also offer a social environment to share all these with friends and family wherever you may be? Would you then be able to ride on top of the Digital Mobile Marketing wave? We believe you would!

About the authors:

Sinan Gurman is a Principal at Infosys Retail & Consumer Goods practice. He has been working with large Retail and CPG companies in Sales & Marketing solutions around Digital/Mobile Marketing, Shopper Marketing & Insights, Category Management, Trade Promotions, Consumer Insights and Sales Strategy and holds multiple patent applications across these areas. He can be reached at Sinan_Gurman@Infosys.com. 

Joydeep Haldar is a Principal, Client Engagement Manager at Retail CPG & Logistics unit at Infosys. He currently manages Infosys's relationship with one of the largest apparel retailers. He is actively involved in developing strategy and solutions for mobile marketing and also has experience in developing eCommerce and Multi-Channel strategies. He can be reached at Joydeep_Haldar@Infosys.com

Sources:

1: Media Brands, Magna, Mobile Advertising Forecast, May 2009

2: eMarketer, Geoff Ramsey, CEO, 7 Predictions for 2009, January 2009
 

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