The location based services leader Foursquare has teamed up with American Express to offer Groupon-like discounts to users who check-in at participating retailers, such as $10 for the price of $5. In effect, the hope is that this type of real-life connectivity will draw more interest from retailers looking to increase customer engagement and encourage trips to their locations by leveraging LBS.
Early feedback on the benefits and functionality appears very positive, particularly from consumers. The potential applications for this type of LBS-payment duality are virtually limitless, and could be particularly interesting for grocery retailers looking to drive increases in customer traffic and encourage consumers to explore new areas of their store. Imagine a grocer who offered a similar promotion where shoppers could earn $5 in their personalized digital wallet, to be spent anytime they chose, for checking in at their location and then scanning the barcode of a certain product or group of products. With Accelitec software much of this is possible today, and could be a very powerful way for brands and retailers to cooperate in the launches of new products, while simultaneously rewarding their customers and driving loyalty to the brands and retailers alike.
Big news this week as Starbucks coffee drinkers can now use their smartphones as a payment method at nearly 6,800 of the Seattle-based coffee shops nationwide. The app allows users to attach Starbucks giftcards to a user’s Blackberry or iPhone and then scan a barcode on their phone at the point of sale, and can also be charged with value via PayPal or any major credit cards. The message coming out of Starbucks HQ seems to be that they’ve opted for a barcode-based payment system today, but are planning to take this technology in some pretty interesting directions, such as Near Field Communication (NFC) in the future. Starbucks also has the ability to add value to its customers reward cards for taking surveys, and will now presumably be able to complete this entire process of presenting a survey offer, accepting customer responses, adding value to the customer loyalty app and accepting payment all on a single smartphone. The functionality being utilized for this rewards app is very similar to the Digital Wallet software available from companies like Google and Accelitec, and the fact that Starbucks has now taken the lead should serve as sign to other brands and retailers that now is the ideal time to be targeting customer loyalty by creating and launching rewards applications for smartphones.
Facebook has released a beta version of a new form of messaging to a select few of its 500 million users that has important implications for the digital communication methods of retailers. The new platform allows easy filtering of Facebook messages, SMS, MMS, and emails within a personalized “social inbox” tied directly to each user’s Facebook friends. This platform puts a new premium on the delivery of promotional messages that are relevant, timely, and valued, and those retailers who miss the boat will risk losing the communication channel with their users. The traditional methods of mass-messaging to any email address or phone number on record will no longer be effective; the time is now for retailers to start using point-of-sale software capable of collecting and synthesizing data about their customer preferences and segmentation.
Looking for ways to increase their penetration in Location Based Services (LBS), Facebook announced yesterday that they’ve added an application called Deals to their platform. Currently only 4% of online adult Americans use LBS applications to let their friends know where they are throughout the day. As an incentive, Facebook has teamed with 21 businesses (so far) to offer deals to users who check-in to certain locations around their cities; Gap is offering a free pair of blue jeans to the first 10,000 people who check-in at a Gap location on November 5, 2010; Macy’s is giving shoppers 20% off for checking in; REI, Starbucks and 24 Hour Fitness are all offering to donate money to various charities for every check-in at their locations. These rewards are clearly more pragmatic and meaningful than the badges and titles that users on Gowalla and Foursquare have competed for up to now, and should provide greater incentive for the general public to at least start considering the use of LBS. Ultimately, Facebook needs to remove as many barriers-to-use of this LBS functionality as possible; the most powerful delivery method of these rewards will be the user simply collecting and storing their credits in a digital wallet, as opposed to “proving” that they’ve checked in to a store clerk before they can claim their discount at the point of sale. The user could then simply check-in at various locations and the store would instantly recognize their account and provide discounts automatically. What do you think about Location Based Services? Do you use them currently? Would you check-in for a free pair of Gap blue jeans?
This past May, 7-Eleven launched a social media campaign called The 7-Eleven Road Trip Rally, which featured 2 teams racing across the United States for 3 weeks to the Indy 500. They were only allowed to make pit stops at 7-Elevens, and the webisodes all featured challenges that highlighted the brands and goods sold at their stores nationwide. 7-Eleven hired Blip.tv to essentially put together the entire project, and they in turn outsourced the creative content and production of the short films to Happy Little Guillotine Films. Viewers were able to watch up to 5 new webisodes per week, as well as track the teams in real-time on their trips across the country.
By combining reality TV content with social media, 7-Eleven and their partner brands were able to post entertaining videos with their products and services cleverly layered into the content. The next step in the process of engaging viewers with this creative new form of advertisement is making the reality-based webisodes more interactive for everyone watching at home; allow everyone to vote for their favorite team on Facebook and give the winning team extra money to spend during their pit stops; poll viewers on Twitter to decide what they want the next challenge to be; enable everyone watching to “recommend” products for the racers to try at their next stop and reward the people at home with free products/promotional offers from those brands. This hybrid platform of social media and reality TV has virtually limitless potential for brands and retailers interested in product placement – the only question is who will take the next step?
With social media now “fast becoming more popular than e-mail on mobile devices and more convenient for news consumption than the daily paper”, companies and organizations across all industries are competing for social media market share, whether they’re aware of it or not. Brands and Retailers are now able to post hi-resolution images on their pages, which can be very useful for a company looking to engage consumers; Travelocity has already taken advantage of the opportunity and appears to be getting very good feedback from its “Fans”.
Consumer Review/Event Groups and Live Chat Forums are also now possible on Facebook, thanks to the site’s “New Groups” feature. This functionality is practically begging to be leveraged by companies looking to survey, communicate and/or engage their fans. Facebook Questions also falls into this category as a way for companies to talk with consumers at a very base, one-to-one level.
The Golden State Warriors NBA team are a perfect case study in how to turn pedestrian email campaigns into powerful, social media events. Kyle Spencer, the team’s Marketing Director, sent out emails offering fans free tickets to preseason games if they’d log into their Facebook accounts and simply “Like” the team. In total, they sent out 2 emails and increased their visibility in social media by 20% (15k additional Facebook followers). These are some truly impressive results for a minimal capital outlay; with the enhancements being made to the site recently, the only thing standing between a company’s social media marketing efforts and success is its own creativity.
Last weekend Bi-Lo sent out a College Football-themed text message promotion to 6,000 shoppers in Columbia, SC, prompting them with ways to throw a great tailgate or house party before the big University of South Carolina vs. University of Alabama game. Incredibly, these text messages were opened by 38% of the recipients, all of whom had opted into the mailing list, without offering any coupons or material discounts in their stores. It would be very interesting to look at what the great response in people reading the texts translated to in terms of promotion-related sales dollars, but the number of people who read the message highlights the power of relevant and timely interaction; when retailers can provide their customers with useful information, exactly when they need it, those customers are exponentially more likely to listen and react.
According to a recent study by Deloitte, consumers across the country have changed their buying habits and are now more focused on “cutting spending and saving money” than on shopping as a hobby or loyalty to their favorite brands. This trend has led several major corporations like AT&T and ING Direct to acknowledge the paradigm shift and implement new campaigns based around Customer Experience Management (CEM). One example of a CEM initiative at AT&T is customer service reps now answering calls with the phrase “How can I make you feel like a valued customer today?”, while ING Direct has “opened seven cafes around the country” where their financial brokers will whip up double-shot mochas and cappuccinos while servicing your portfolio; all of this is an attempt by companies to connect with their customers at a more meaningful, personal level. As these CEM programs evolve, it will be very interesting to see how consumer purchase histories and individual profiles are integrated into the process of personalized connections between shopper and brand.
Dunkin Donuts has run marketing campaigns on Facebook in the past by asking their “fans” to design the perfect donut for a chance to win $12,000. This time the Quincy, Massachusetts-based company is seeking the “Ultimate DD Coffee Fan” by offering prizes to Facebook users who put together the best videos explaining why they love Dunkin Donuts coffee more than anyone else. The Grand Prize includes a trip for two to Costa Rica and 60 months of free donuts, with 10 First Prizes of 12 months of free donuts also on the table. The categories they’ve chosen to evaluate the submitted videos by are “Passion for the Dunkin Donuts Brand”, “Overall Video Appeal” and “Originality/Creativity”. This contest is just one piece of the overall efforts that Dunkin Donuts has put into their Facebook marketing campaign as they attempt to catch up to their “Ultimate Coffee-Grinding Rival” in social media; there are currently just over 2 million people who have “liked” Dunkin Donuts, compared to over 14 million for Starbucks. The fact that these promotions are becoming more widespread and a larger part of marketing for major companies is further confirmation that social media has evolved into one of the most powerful tools in a customer relationship management strategy.
Target, Whole Foods, Trader Joe’s and Walmart have all officially entered the arena of Social Networks in an attempt to boost their market share, and there’s still plenty of room for growth. With Walmart over 1.6 million Facebook followers, and Target with almost 1.8 million, the race is on to see who will be the Retail-King of social media. These large chains are fully underway in social media to gain exposure and build customer relationships, but mid-size and smaller grocers are strangely proving much slower to implement the technology.
Clearly there are some market-leaders when it comes to technology adoption outside of the major chains – Newport Avenue Market in Bend, Oregon and Granite Falls IGA Market in Washington state are two great examples – but the segment as a whole appears to be lagging behind their larger competitors. In an industry where smaller retailers are unable to compete with the big-boys on price or product selection, building and maintaining customer relationships should be priority number one; the vast majority of small and mid-size grocers are missing a great opportunity to connect with their customers through social media.
With the economy continuing to cast a cloud on consumers, the number of shoppers basing store and brand selection decisions on price is increasing.
Accordingly, for those retailers who cannot compete on price it is increasingly important to identify new ways to engage with their customer base. It’s unrealistic to expect that operating the business the same way and using the same tools will impact the growing number of price-sensitive shoppers. Personalized marketing is certainly one way to connect with customers, but delivering personalized messaging along with targeted value is a more powerful combination.
Starbucks has tried a variety of media plays in the past (magazines, music) as brand extensions, with varying success. This digital program is a horse of a different stripe, however, and appears to be a platform that will keep the brand in a position to leverage new technology to drive loyalty benefits. It makes their stored value card initiative look positively, well, old-school.
“Imagine a Starbucks patron is reading a review in the free version of the New York Times about a Chardonnay and suddenly their iPhone buzzes. A text coupon arrives in your mobile inbox and you are offered $5 off a wine purchase of $20 or more from a local wine purveyor. The coupon has a timed code and expires in 3 days, nudging you to act. The era of the hyper-relevant advertisement is upon us. And that example is just scratching the surface.”
This is part of a larger, quickly emerging trend of location-based, personalized, opt-in promotions and marketing. A key development appears to that this does not stitch together commodity services like Foursquare, but is retailer-branded and unique to the experience at Starbucks. That has enormous differentiation benefits.
Although it is retailer-specific, the hypothetical contemplates an affiliate program that may – or may not – dilute the underlying purpose of getting people to and keeping them in a Starbucks, but in any case adds a level of operational complexity we won’t likely see in the near future.
We look forward to checking it out – at one of the dozens of Starbucks within shouting distance.
As social media continues to establish itself as the predominant information source for consumers, brands and retailers are finding themselves at the mercy of public opinion and looking for new ways to affect what is being said about them and their products online. This new paradigm of communication has paved the way for a number of innovative corporate campaigns, including “crowdsourced R&D” to monitor and extract new product ideas from online conversations, rapid social marketing response in an attempt to offset negative press surrounding a company and its products, and peer-to-peer unpaid marketing teams that are strategically placed to communicate and influence conversations with other consumers about a specific product or company.
Additionally, according to Altimeter Group’s Ray Wang and Jeremiah Owyang, there are five pillars of building a successful CRM program within the social media space; “the 5 M’s of Social CRM”: Monitoring, Mapping, Management, Middleware, Measurement. Essentially this breaks down into monitoring conversations about you and your products on social media outlets so that social profiles can be mapped out and connected to better understand relationships. From there, data is made actionable for management through effective processes, and middleware is used to connect to the consumers in the social media space. The final piece is to measure the effectiveness and impact of a campaign against a company’s goals and strategic objectives. Corporations are becoming much more intelligent in understanding the influence that organic, peer-to-peer conversations in the social media space can have on their business and have started to adapt their strategies accordingly; definitely something to keep in mind the next time you get a recommendation to try a great new product from a Facebook “friend”.
The seemingly endless growth in third party online services available to retailers to help them drive brand awareness, launch promotions and generate store traffic is a wonderful thing to see. The availability of LBS services, group buying, aggregated electronic coupon sites, mobile shopping lists, social media, etc. has launched some incredibly creative campaigns.
Independent of the issue of how these third party services – many of which are free to use – are monetizing their business, one question raised by this ecosystem is how retailers and brands can really differentiate their business by using these off-the-shelf services. In some cases, like the Old Spice blitz on YouTube last month, a swing for the fence can actually knock the ball out of the park. However, it’s not clear whether that promotion had any impact on sales at all, though it was surely the most entertaining campaign in recent memory – with the traffic to prove it – to many industry observers.
When the creative use of these services can be matched in hours if not minutes by a competitor (witness the Amazon vs. Wal Mart pricing battle of late spring where they engaged in a sort of negative auction to see which could lose more money on the sale of a book), we enter a world of advertising where engineering resources are needed to provide meaningful separation from what the competition can offer.
That state of affairs is not here yet, as marketers test the waters with a growing number – but still small – of early technology adopters from the consumer side. But brands and retailers will be well-served by identifying proprietary technology solutions which give them a leg up on the competition as they use these interesting services more and more.
Bynamite is a start-up company out of San Francisco, and they’re in the business of managing something very personal to all of us; our browsing histories. As Google, Yahoo and Facebook, among others, continue to find ways to monetize information about the things you’re interested in, a debate has emerged over who these revenues should actually belong to. We consumers deserve some form of payment when information about our personal preferences is bought and sold! Or do we? After all, it’s your data…isn’t it? Give us your thoughts!
Now that the total number of active Facebook users has eclipsed 500mm, brands are beginning to pour advertising dollars into the site in an effort to reach more readers on the world’s number one social media website.