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CETW: Mobile marketing expert talks anti-showrooming strategies

Survey data reveals an across-the-board increase in all showrooming behaviors.

November 7, 2013 by James Bickers

Jack Philbin, chairman of the Mobile Marketing Association, began his Wednesday morning Customer Engagement Technology World session with alarming results from the second annual survey on consumer behavior conducted by the marketing consultancy Vibes, which he co-founded and is currently serving as its CEO.

In a presentation called "Combat Showrooming with Personalization," Philbin began by noting that this year's survey showed "an across-the-board increase in all showrooming behaviors" over the previous year.

"There's really no stopping showrooming at this point," he said.

Of the consumers who were surveyed, 44 percent did showrooming either every time they shopped, most of the time or often. "You're approaching almost half of the people who admit to showroom-type behavior," he said.

Most of the people who are using their smartphones in-store to find better deals elsewhere are between the ages of 25-34, aligning with the stereotype that it is mostly young people who engage in the behavior, but nearly 20 percent are between the ages of 35-44. Almost half are parents, showrooming with children in tow.

As for where the business is going, most of it is going where you would expect: 30 percent of people purchased an item from Amazon after getting information on it in-store; 14 percent bought it from another competitor.

Overall, there was an increase in price comparison shopping or buying a product from a competitor of 156 percent.

But on the bright side, there was a drastic increase in shoppers who made an in-store purchase as a result of using their smart phone: The number of shoppers who made an unplanned purchase because of information they received in-store after scanning a QR code or texting to a provided number increased from 14 percent to 40 percent.

For the remainder of his session, Philbin emphasized an "if you can't beat 'em, join 'em" spirit. He gave as example Best Buy, which changed its social media presence to self-identify as "Your Ultimate Holiday Showroom," a move which he called a "kind of retail judo."

He then gave two other tools to join 'em, and take advantage of the fact that shoppers are using smartphones in-store, and that fact simply isn't going to change.

Personalization

Philbin noted that most retailers are falling down when it comes to personalizing their mobile messaging to consumers: 89 percent of consumers said they would sign up for mobile messages if they knew they were going to be personalized in some way, but only 18 percent said they frequently saw personalization from their brands. "This is a big disconnect between consumer desire and what's actually in the market," he said.

The important aspects of personalization: 60 percent want to see messages about their preferences (their size, favorite brands, favorite categories), 20 percent said timeliness was important to them, 13 percent said location was important (that they receive it when they're in store). And that old email marketing chestnut of making sure your messages greet recipients by name? Turns out only 8 percent care whether you address them by name or not.

The important types of personalization: 79 percent say incentives or coupons entice them to subscribe to a retailer's communications, 46 percent want product information and updates, and 45 percent want exclusive content.

Mobile wallet marketing

Philbin said that mobile wallet marketing is "probably the most important area that retailers specifically could invest in right now," giving the example of Starbucks, which reports that 10 percent of North American transactions are coming from the mobile phone.

But when people talk about mobile wallets, they focus too much on the transaction and not enough on the other benefits, he said. When Apple launched Passbook in September of 2012, it wasn't all about the transaction. It was also about things like managing point balances, time-sensitive offers and location-aware alerts.

Only one-in-three customers have used the non-payment side of mobile wallets like Passbook or Google Wallet, which launched in September of this year. And only 48 percent of consumers are even aware of the non-payment side of mobile wallets, which Philbin touted as a strong alternative to native apps.

"I'm certainly not going to have 50 retailer apps on my phone, but I might have that many Passbook offers. It doesn't take up any room.

"Mobile wallet is really about the leather, not the plastic," he said, "the convenience, not the payment."

As an example he pointed to Build-a-Bear, which gives custom offers through Passbook that know the purchase history of the customer — for instance, on the bear's "birthday," the purchaser receives an offer in their Passbook inviting them to come back for a celebratory discount.

And if that customer walks within a 100-meter radius around the Build-a-Bear store at Chicago's Navy Pier, they get a prompt that the store is nearby — delivered to the phone like an appointment reminder.

(Photo by Jason Howie.)