How publishers can win at mobile commerce

In the never-ending quest by marketers to put the right offer in front of the right consumer at precisely the right time, inner space is becoming the next frontier for mobile commerce – and a major opportunity for newspaper publishers. 

Inner space is the precious geography inside a store, where marketers have their last, best chance to persuade consumers to buy what they are selling. Here’s why inner space is fast becoming the most valuable territory in the do-or-die world of mobile marketing:

With more than half of mobile users equipped with smartphones, a growing number of consumers are using their devices to decide on purchases as they move through stores, checking product features, consulting reviews and, of course, comparing prices.  In a recent survey, Localeze and 15 Miles, a pair of consulting companies, found that nearly a third of smartphone-packing shoppers use their phones at some point in the purchase process. 

Well aware of this behavior, retailers ranging from Safeway to Home Depot have developed smartphone apps and loyalty programs that meticulously track consumers in order to target specific offers to them. This dynamic process depends on what we’ll call the Three Ps:

∷ Profiling.  Combining volunteered, purchased and derived data, marketers are able to determine the age, gender, wealth, credit rating, education, marital status, address and other demographic information about individuals. When customers opt into brand-issued credit cards and/or join loyalty programs, the actionable data is even more granular and abundant. 

∷ Prospecting. Crunching the vast volumes of data they relentlessly compile, marketers are developing ever-more sophisticated data-mining techniques to slice and dice consumer groups into ever-narrower segments.  The segmentation information is used by brands to recruit future customers from among groups of people who happen to look like the customers they already have. 

∷ Personalizing.  Analyzing past and prospective purchases (the latter captured by monitoring real-time clicks), marketers can learn what folks are likely to buy, when they are likely to buy, how to best pitch to them and, in some cases, even the most compelling prices or packages to offer. In the same way airlines sell seats at different prices as flight time approaches, it won’t be long before brands dynamically customize coupons, pricing and other incentives to tweak demand while maximizing profitability. 

For all the digital derring-do invested at separating consumers from their money, the crucial step in closing any deal depends on putting the right offer in front of the consumer at the moment she is poised to buy. 

To date, reaching customers at the point of sale has been the weakest link in mobile marketing, because the global positioning services that can track you in the glorious desolation of Yellowstone Park can’t pinpoint your location when you are in a mall.  

To solve this problem, a growing number of retailers are installing systems that map the interiors of their stores – and every customer’s location within them. An iPhone app knows where you are – and will direct you anywhere you want to go – when you visit the flagship Macy’s in New York.  The same is true at every Walgreen’s, whose app not only encourages you fill out a shopping list but also routes you through the store, conveniently prompting you to buy salsa when you near the Doritos. 

The value of inner space was underscored when Apple recently bought a start-up company that can detect an individual’s movements in enclosed spaces. Meanwhile, Google has accumulated interior maps of more than 10,000 public locations around the world, including some or all of the stores operated by Best Buy, Bloomingdale’s, Home Depot, Ikea, Macy’s, Petsmart, Sears, Sports Authority, Toys R Us and Walmart. 

But, wait, there’s more: The latest-generation Android phones, among other things, detect barometric pressure, so they can tell if you are on the first or fourteenth floor of a building. Meantime, researchers are developing smartphone biosensors that can measure everything from your body temperature to your heart rate, theoretically making it possible for marketers someday to tell when you are literally hot for their products. 

Given the efficiency and generally higher purchase volume associated with mobile commerce, it is fair to assume that marketers will cut back on traditional print and banner advertising as they put ever more resources into building direct relationships with individual customers.  

While many of the big-box retailers have created their own apps, newspapers, working with a growing number of eager technology partners, can participate in the mobile commerce revolution by equipping independent businesses in their communities with optimized mobile sites, in-store mapping, mobile couponing and loyalty programs. 

If newspapers act now to invest in helping local merchants master the art and science of mobile commerce, they can generate significant new recurring revenue streams at the same time they build powerful customer loyalty for themselves. 

© 2013 Editor & Publisher