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Mobile Wallets Are a Win-Win

Report shows that digital wallets are gaining popularity––as long as consumers see immediate benefits 

 

In the world of retail, the consumer wants to be first––and they respond best to marketing when there’s something in it for them.

 

At least, these are the findings of the 2016 Mobile Consumer Report compiled by Vibes, a mobile marketing firm. The study showed that consumers deliberately search for marketing campaigns that include some sort of immediate benefit, from easy-to-use coupons to customer loyalty programs.

 

The study also showed a general trend toward more consumers utilizing mobile wallets, such as Android Pay and Apple Wallet. With convenience at the heart, this technology makes coupons and loyalty programs an upfront benefit––and in some cases, they’re the reason consumers are using mobile wallets at all.

 

Here are some key findings from the study:

 

1. More than 80 percent of smartphone users surveyed rank mobile coupons as more convenient than the printout counterparts that must be physically taken into the store.

 

2. Almost 60 percent of consumers reported that their opinion of a brand would shift more positively if they received digital coupons and offers that they could save in their smartphones.

 

3. Approximately half of those surveyed said that when they click on a digital ad, they’d rather land on a mobile coupon page than the brand’s homepage, a transactional page or the retailer’s app download page.

 

4. A full 94 percent of mobile wallet users report they like saving personalized offers and coupons.

 

5. Just over 30 percent of smartphone users use a mobile wallet.

 

6. Just under 60 percent of those surveyed said they’d like to have text alerts delivered when updates on their orders are available.

 

7. Almost 80 percent of smartphone users say they’d view a retailer more positively and they’d increase their brand loyalty if they were to receive surprise rewards, exclusive content and mobile “happy birthday” messaging.

 

Jack Philbin, CEO and co-founder of Vibes, says the primary shift here isn’t in the customer-perceived value of coupons and loyalty programs, but rather how these benefits are delivered. The immediate nature of mobile delivery is a game-changer, he said, and provides big benefits to both consumers (convenience) and retailers (brand awareness and loyalty), making this form of digital consumption a win for both sides.

How Target is Making Changes––and Making Strides

From groceries to inventory, the brand’s work is paying off, its CEO says

 

In a market where customers care about a customized experience from start to finish, mega-power retailer Target is proving they know what they’re doing. According to CEO Brian Cornell, traffic to the brand has been increasing for five straight quarters, and 2015 signaled a new dedication to the customer experience. It seems 2016 will work to further that progress, from taking a new look at loyalty programs to driving home more personalized assortments.

 

For Target executives, guaranteeing a positive customer experience starts on the ground: ensuring that inventory is stocked both in stores and online, which begins with working toward a sustainable supply chain system. To that end, the brand plans to put $1.8 billion this year into supply network and technology upgrades, followed by an additional $2.5 billion in 2017, according to a report by ABC News.

 

The work seems to be working. Target’s out-of-stock stats were 40 percent lower in 2015 over 2014, said Cornell. Additionally, Arthur Valdez, previously with Amazon, joined the Target team as EVP and chief supply chain and logistics officer. Several other high-level staffing changes have taken place since Cornell assumed the reigns in 2014. The brand’s Canadian operations were also shut down.

 

A renewed emphasis has been set on Target’s grocery business, the goal being to increase customer perception that the food is fresh and varied. This effort has led to grocery sales growing faster than the brand’s overall business during the last six months of 2015. The work will continue as Target teams up with IDEO and MIT Media Lab to come up with new ways to address the grocery sector.

 

Growth is a key element in Target’s current dialogue, as well. Two new brands will debut this year, based on customer feedback regarding products that support style, parenting and wellness. The Finnish brand Marimekko also partnered with Target for a limited-time assortment of approximately 200 items for an average price below $50.

 

The changes in assortment also mean that some offerings will be going away across all categories––primarily those that don’t sell well.

 

Ultimately, Cornell feels the decisive steps the brand is taking are making a difference.

 

“Guests are telling us with their feet and their clicks that we’re focusing on the right things,” he said in an interview featured on Target’s corporate site. “Our efforts around the fundamentals are improving operational performance and delivering the right foundation for future growth. And we’re just getting started.”

Five Quick Ways to Increase Profit

money hands

In a time where retailers are not only competing with their online counterparts, but also with each other, there’s always room for improvement.

The focus these days is creating a shopping environment that best tailors to your consumer, with the objective of strengthening customer loyalty.

Many use different techniques to accomplish this goal, but most commonly they incorporate some type of shopper marketing program. And while this practice grows in popularity, the question lingers of which techniques are the best for increasing profit.

Recently, POPAI collected data from nearly 8,500 shopping marketing programs to uncover the best practices for improving the program and increasing ROI. We’ve taken a look at their findings and narrowed it down, providing you with five ways to help your business to become more profitable:

Fund your best customers – Know the return rate from each of your customers, channels, and/or brands, you can make small allocation changes that increase profits.

Reach shoppers throughout the path to purchase – Here’s at FHC, we’re firm believers in customer engagement. It’s important to use multiple tactics, both in and outside of the store, to reach your customers. In fact, programs that use just one pre-store tactic or only in-store elements have below average ROI.

Know the tactics that work best for your brands – High-equity brands can perform better in shopper marketing than price-sensitive brands; generally, equity tactics on value brands aren’t effective.

Be relevant in timing, concept, and creative – Understand the current situation of your consumer, and use it as a foundation for your promotions. For example, pre-store tactics involving discounts are more effective while shoppers are planning on a trip. Get into the mindset of your consumer, what is it that they need at this time?

Simulate results and know what to expect – Don’t sell yourself short, but don’t expect the world either. Know that you’re the one driving the ship.

Photo by 401 (k) – via Flickr

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