Technically Human: Episode 5
October 21, 2016
Transcript

[background music]

Katie Cantu: Hi there, I’m Katie Cantu, strategist at Ignite Partnership.

Mike Covert: I’m Mike Covert, founder of Ignite Partnership.

Katie: You‘re listening to “Technically Human,” where marketing experts talk about how to find the soul in technology products and services. What really makes humans tick when it comes to tech? Join us on our cultural expedition to find out.

Katie: This week on Technically Human, we're talking about the value of mobile at retail. Actually, first we're going to talk about what that catchphrase—“mobile at retail”—even means. We know that the way consumers shop brick‑and‑mortar stores is constantly changing.

Mike: And super powerful, Katie. We all have this device, a very powerful device, in our pockets—it’s ubiquitous now. As we're shopping, how do we take advantage of that mobile opportunity?

Katie: Exactly. That's what we're going to find out today with the help of our special guest, Andrew Levi. Andrew is the CEO and founder of Blue Calypso.

Andrew, we're super excited to have you here today. You want to go ahead and introduce yourself to our listeners?

Andrew Levi: Yeah. Thanks, Katie. Our technology platform at Blue Calypso is designed to connect brands and retailers with consumers when they walk through the front door of a brick‑and‑mortar retail location.

Our technology really has the ability to de‑anonymize that shopper and create a direct relationship between the brand and the retailer that sets both the brand and retailer up for out‑of‑store communication with the shopper, creating more loyalty, more advocacy, and enabling both brands and retailers to drive the two things in retail that are most important—bigger basket size and more store visits.

Katie: Perfect.

Mike: It sounds simple. The way you describe it, Andrew, it sounds like this is something that is readily available, has a strong benefit. But what I find when you say this—and I'm using air quotes here for those that can't see me. Actually, none of you can see me, but…“What is mobile at retail?”

From a marketing standpoint, I'm sitting in a lot of client meetings, reading a lot of chatter…It sounds like soup of the day. I'm just curious, Katie and Andrew, what does that mean to you?

Katie: We hear this all the time, and we talk about it all the time with our clients. From a strategy perspective, we've seen the shift that takes place in retail over the years, and we've heard the naysayers proclaiming every year, “Retail is dead. Retail is dying.”

It's not dying. It's just changing. One of the big ways it's changing is that we all have this super powerful mini-computer with us all the time. I think the interesting dynamic there is [that] a lot of retailers see that as a threat. They see that shoppers are going on to their mobile device, and they may be saving something, comparing prices, actually ordering something online, just showrooming, for example, in a Best Buy.

I think there's a unique opportunity there to leverage that device and to create a personal line of communication with the shopper. To me, when we talk about mobile at retail, we're talking about ways that we can, just like you said, Andrew, de‑anonymize the shopper.

How can we make a connection with them, build loyalty, provide something of value in the retail space that's actually going to convert to sales?

Andrew: Those are great points. The reality of today's shopper is [that] they've all become very data driven, thanks to the smooth and ease accessibility that Amazon and other e‑commerce platforms present to anybody sitting at their home, perhaps in their underwear, shopping for a new mobile device, or even something as commoditized as paper towels.

The nice thing about an online experience is [that] it really puts all the data necessary for today's consumer to make a decision, an instantaneous shopping decision, without much further research.

You get product reviews, people that bought this also bought that, a wealth of detailed information about a specific item. You can do price comparisons, and this can all happen within seconds with a big fat button at the bottom of one screen that says “Buy now.”

The opportunity for brick‑and‑mortar retail, which…people think that e‑commerce and online transactions have eclipsed brick‑and‑mortar, and that's far from the truth. Really, the stats show that the percentage of e‑commerce transaction as a percentage of total retail purchasing is still less than probably 20‑25 percent.

It has not eclipsed the physical experience that can happen in store. So what retailers have the unique ability to do is [to] create an experiential path to purchase in store for shoppers that will never happen online. You've got the ability in physical retail to tantalize all five senses.

Some people like to squeeze the grapefruits, and they like to smell the leather of the car that they're going to buy. Those are things that some day we may be able to get via an Internet experience, but today, retail still has that leverage.

Brands and retailers have got to figure out how to embrace this opportunity, not be afraid of it, and most retailers and brands are experimenting, but the opportunity is now, because every single shopper that walks through the front door of any retailer, number one, is anonymous until they're not; and likely they're not anonymous in retail, [if] only at the point of purchase

You walk through the front door, maybe I'm a participant in the retailer's loyalty program, but the retailer doesn't have an opportunity to affect my path to purchase and buying decision until I'm actually at the cash register checking out, which is kind of too late to grow a basket size.

Maybe the loyalty program was leveraged to drive foot traffic, but is the loyalty strategic enough to compress store visits? There's a lot of moving parts to this, but the one common denominator is every shopper that walks through the front door of every retailer has a smartphone in their pocket. They know how to use it.

Mike: All the benefits…you guys are right on, both from a benefit to the retailer [to] the customer experience, and what we're finding is that retail—brick‑and‑mortar—has a role in the decision‑making process.

Amazon is opening brick‑and‑mortar stores, if you want a case in point that it has a role. It just depends on where that role is. My question is—it sounds obvious, and this is what we talk about with clients—if it's so obvious that we need to utilize this mobile landscape, this mobile opportunity, to enhance the shopping experience, why don't we see as much mass traction as I would expect to at this point? It feels like it's more talk than action, but I'm curious your perspectives on that.

Andrew: I believe retailers look at experimenting and considering deployment of a mobile‑driven solution as a risk. I think the risk is not doing it right now. There are a lot of technologies that can overcome the intercept, the at‑front‑door activation, and the engagement in store. There's a lot of really neat stuff out in the market right now.

I do think it is still early stage in the adoption curve, and therefore, what I'm seeing retailers gravitate to is something they can wrap their head around as a consumer, and that's building a mobile app.

The problem with retailers building a mobile app…The good thing is that they're trying something. They're experimenting…

[crosstalk]

Mike: Most of the major retailers have some—or have experimented with some sort of app, cross channels, right?

Andrew: That's right, and I applaud retailers for doing some experimentation, but by this point, with some exceptions, retailers are learning quickly that we as consumers don't want to have a mobile app for every retailer that we shop at.

Katie: Yeah, it’s overwhelming.

Andrew: Overwhelming. They end up in the app graveyard. It was a nice test. It can be a very expensive test, depending upon what the initiative is, but in my opinion, that's a bad strategy long‑term for retailers, because it's not sustainable, and it creates too much confusion. Therefore, the adoption is not going to happen.

It's an investment that the retailer makes. It's not one‑and‑done. It's one, and you're starting, and you've got a lifetime of continued evolution and development. But I like to see them doing something.

If they are successful in deploying a mobile app for the retail location, it sets them up for potentially deploying beacons. Beacons are very cool. I love the hyper-local sensitivity that a beacon can deliver to the consumer when they're in store and impact the purchase, particularly at the front door.

You know they're at the front door. You know they're walking in. You know they're leaving, or departmentally, or even around specific displays and possibly some of the experiential things that we've talked about—driving people to experience different things, [like] food sampling or test drives in cars.

There's a lot of neat application there, but…no app, no beacon. If the retailer can't get the adoption of their mobile app, then the chances that a beacon strategy is going to work for them is pretty low, if not zero.

Mike: What about from the customer standpoint or the consumer standpoint, Katie? I think Andrew is talking about a real hesitancy when it comes to the right experience and the right investment to test the mobile opportunity.

Are you seeing, in what you see out there, that consumers are as willing to test experiences using their mobile device though apps or beacons or whatnot? What might be hesitating their adoption [of] or their participation in it?

Katie: Andrew made a good point when it comes to adoption rate, and specifically when we look at shoppers and what they're willing to participate in, one of the things that we're seeing a lot is [that] there's this fine line, right? We've come to a point where shoppers expect personalization.

They're living in an Amazon world, they're living in a world where reviews are at their fingertips. It's irritating when a brand that you purchase from frequently doesn't know you or understand you…

But on the other hand, right across the fence there, it gets creepy. I don't want to give up too much of my personal information, I am being tracked, they know exactly what I want. You've heard these stories of people saying, “Oh, my gosh. Target knew I was pregnant before I did and I was getting diaper coupons in the mail.”

[laughter]

Katie: People still have...there's a sense that they want to hold on to their identity. I think a lot of us have probably given up. [laughs] I know I've just said, “I'd rather have a personalized experience at this point. I don't have anything to hide.”

But I think what we're seeing with shoppers, specifically in a retail environment, [is that] it's one thing online to be tracked. It's one thing to be at home and for a website to make recommendations; it's another to be in a public environment.

In a retail space, there's a sense of fear, right? You're not alone. For somebody to be watching you or to be tracking you…

Mike: A little different than when you're in your underwear on your couch, right?

Katie: Exactly. It's a...

Andrew: Hopefully it's a little different.

Katie: Yeah.

[laughter]

Katie: It's alarming, because you don't feel as much that you're in a safe space or you have as much control over your environment, I think.

Mike: I think that's a really good point, just melding those two experiences. The other thing that I hear, and have experience [with] as a shopper and not just a marketer, is a lot of this information—even offers, reviews—they're available to me on that device without me having to give up my identification.

What experiences, including those, are going to encourage me to trade that off? Then, the retailers don't get good experiences where they have an app or using a beacon or some other more universal technology that you obviously know a lot about, Andrew. What will encourage me to pull the trigger and engage as Mike, not an anonymous shopper?

Andrew: There's really no simple answer for that. Every person is going to have a different tipping point in the value proposition of surrendering their anonymity to a brand or a retailer. It's going to be personal as to what moves the needle. It's also going to be real specific to the brand.

I think it's obviously important that brands experiment and spend a lot of time thinking about the psychology of what does it take to get somebody that has some level of brand affinity to de‑anonymize themselves and become part of the tribe. The easy answer is, it's discounts, coupons, deals, offers.

People like VIP experience and if they feel like not participating is going to keep them outside the velvet rope, then there is some incentive to cross over, because the other side of the velvet rope is going to be a much better experience than watching from the outside, watching from the stands.

That chasm‑crossing event is personal and very specific to the brand, but I don't believe it's always about discounts. I think it's getting access to something, some piece of content, some product, getting a first look at the 2017 new car if you're a car aficionado.

There are things [that], as data is assimilated and becomes an indicator of me and my DNA and the things that are important to me, the things that I like, the things that I don't like…brands and retailers can anticipate and be more predictive and much more targeted in putting things in front of me that are valuable and will cause me to engage.

The constant barrage of noise that a lot of the people that are trying to leverage mobile use to try and change behaviors with people will actually repel the consumer from the brand and from engaging, and it will cause him to check out.

Mike: Do you also agree with the VIP experience getting beyond the low‑hanging fruit that we hear in these conversations—“Put a discount at it,” “Throw a coupon on it or an extra point.” What else have you seen, Katie, that elevates the experience, not elevates the transaction?

Katie: Absolutely. I 100 percent agree with that, and I think this is usually the case. As we see a new tactic and a new approach and a new trend, the cycle repeats itself of the way that we approach marketing.

You could look back 10-15 years ago and look at a couponing strategy and see that a lot of brands were relying heavily on that, but eventually, they progressed to a more experience‑based way of marketing and fostering relationships. I think that's the same thing we're going to see with mobile at retail. There are several brands that are already doing that well.

Andrew talked a minute ago about a lot of retailers [having] created an app that's proprietary to them, and while there are a lot of problems with that, it's overwhelming to have so many apps and, like Andrew said, they end up in the app graveyard and you delete them. But I do think it's been an entry point for some brands who really understand their customers' journey.

We've talked about a couple of those before. The ones that come to mind are Starbucks, Target's Cartwheel app. Even though that is a standalone app, they've really done a good job of engaging the shopper throughout the store and, while that's discount‑based, there's a lot of added value to shopping lists helping you guide your way through the store, creating loyalty programs, access to first listens on a Taylor Swift exclusive album.

They've really transitioned away from the couponing strategy that so many brands relied on in the late '90s.

Mike: Target, I believe—and it's been a while since I've really gone deep into their strategy specifically across the board—but there's a treasure hunter component to that shopper and they like the discovery. In that case, discounting as a way in makes a lot of sense, as long as it's not exclusive to that and there's a reason to remain engaged.

Also, another thing to keep in mind, and this is probably as much from the retailer perspective and understanding the customer journey, but also the frequency of visit, and how often would you expect someone to engage.

Target, my guess, has a pretty frequent visitor, compared to other specialty retail stores that are more specifically focused on, say, technology products. I don't know that to be true, but the use or occasions, just by range of product they carry, is a little broader.

You can anticipate tapping into a Cartwheel a little more often, which also allows you to vary up the content, utilize cross‑sell, and really make it a part of the retail strategy to get around the store.

Katie: Right. If you look at Target's just overall strategy right now, and the way they've built their brand in the past five years, even if you look to their above-the line-campaigns, they're really centered. They've built brand around “a Target run,” and the adventure, and going to Target to discover new things.

You're right. It's a perfect fit. The lesson for other brands and retailers is, they used a coupon as a carrot to get somebody into the door, but then they built upon that experience to keep someone coming back.

We're still in a phase right now where we see a coupon here and there for a brand, somebody issues an offer over a beacon, but it's not enough to build a relationship to get somebody to keep coming back. Are you seeing that at all, Andrew?

Andrew: Actually, I have seen some of these legacy loyalty programs, that use recurring, predictable discounts as, really, a way of eroding margins, not necessarily building brand loyalty. There are pharmacies and big‑box retailers that, predictably, every 30 days there's a 30 percent discount that's delivered out to the people that are a part of the loyalty program.

What happens is people come to understand the cadence of those discounts, and they'll accumulate their purchases on a shopping list. You know when they go? Only when they get the 30 percent discount.

All you end up doing is actually creating a behavior in your shopping community that is very cannibalistic to the gross margins of your brand. The loyalty program is actually destructive to the business.

Mike: A more strategic use of those carrots to change behavior, you're absolutely right. You bring up the notion of some different axes to pull on to incent behavior that a traditional couponing strategy wouldn't be able to do. Meaning, wherever you got it—an email, mail—on Tuesday, you know it expires on Sunday…I call this “the Bed, Bath & Beyond effect.”

Katie: Exactly, that's just what I was thinking. Yeah.

Andrew: Exactly. Literally, that's where my example comes from.

Katie: It's like, “I'm not going to go to Bed, Bath & Beyond if I don't have the coupon.”

Andrew: 30 percent discount!

Mike: What's killer is then they just give you one at the register.

Katie: I know. I know.

Andrew: Yeah.

Mike: It pains me every time that happens for them.

Andrew: Let's be clear, that is coupon fraud, and it has been rampant in retail forever. Mobile can fix coupon fraud overnight, if people will adopt.

Katie: Right.

Andrew: There are economic value points to deploying a more mobile‑centric strategy for these retailers that will have an immediate effect on their bottom line.

Mike: What are some of those other ways? Let's take discounting. That seems to be the more universally accepted reward, or some sort of purchase incentive.

Katie: Or at least the entryway in to adoption.

Mike: Yeah. How can mobile allow retailers to use, what is their already accepted tactic, more strategically?

Andrew: Easy. If everybody gets the 30 percent discount, that's a lazy loyalty program. The beauty of mobile, and big data, is that that loyalty can be highly tailored to me. I'm not horizontally offering 30 percent off, I can drive behaviors to create a bigger basket size, and more frequency of visit, that's not horizontal and 30 percent off if you come in by Sunday.

Then there's the, again, predictive nature of, “Every month I'm going to get my 30‑percent‑off coupon.”

These are fairly complex loyalty programs to put in place, that are all data driven. But in today's world of technology, they're not rocket science any more. There are great loyalty solution providers and technology platforms that can easily replace the legacy platforms that are virtually as easy to customize and tailor. They've got a lot of artificial intelligence and predictive analytics built into them that can make sure that the rewards for you are going move your behavior, but they're not the same rewards that are going to move behaviors for all shoppers.

Mike: Katie gets something different than me, because we obviously shop differently.

Andrew: That's right. It doesn't have to be a 30 percent discount for everybody.

Mike: Another interesting deployment that makes me excited [is], if anyone's had a marketing opportunity to build a lagging market. It means, nationally, things seem to be going very well, and there are some anomalies out there in key markets, that really need to get beefed up.

It seems to me, mobile would allow us to more specifically target by location and deploy in a more controlled way than some of the other mediums would, if we knew who you are.

Andrew: Absolutely. The other thing that mobile gives you the ability to do is understand geographically relevant circumstances. Things like weather. Weather can drive different incentives.

If I sell umbrellas, and it's pouring outside, the immediate knee‑jerk reaction is to discount umbrellas. Well, the reality is [that] you should probably raise the prices.

Katie: Right. Supply and demand.

Mike: Cancel that 30 percent. [laughs]

Andrew: Yeah. Why discount if it's raining outside, when you don't have to? All you're doing is you're giving away margin that you don't have to.

Mike: For instance, if a product is selling well in one area, why give it a universal discount to cover off on the areas that it's not selling as well. Instead, you can deploy the same incentive or investment towards a complementary product that they may not have otherwise have considered.

That is a more strategic way to look at different ways of applying that incentive, depending on where you are and who you are. As you said before, seasonal factors, time factors, et cetera. Doesn't that sound hard to control?

Don't you find retailers saying, “Who is going to control all those factors and have all these different incentives out there at different times? “ Is that a hard thing to sell in?

Andrew: It's not trivial to administrate a program like that, but it's not rocket science either.

One of the things mobile gives a retailer insight [into] is potentially how far away a store shopper lives from one of their physical locations. When you can extrapolate their drive distance, and then understand more about that shopper, some basic demographics, how many kids do they have, household income, you can then extrapolate that and segment that to understand what their neighbors, basically, look like—people associate with people of like minds.

Then, potentially, apply other tried-and-true marketing techniques, things like direct mail, even door hangers, which seem a little faux pas to talk about in a high tech conversation like this. Some of these old, proven techniques are not quite as noisy as they used to be, and therefore, you can get a better conversion rate on some things that, historically, might have been abandoned.

Mike: You bring up a really important point there, that, generally speaking, if you've listened to this podcast before you know that we believe in the world of omnichannel, and that no singular tactic solves all. It's a journey. There are a lot of inputs along the way.

Is that something that we bear the burden of, Katie, as marketing strategists, to show how mobile can also enhance other efforts? It's not “Do less of this to support that,” it's exponential.

Katie: Absolutely. This is similar to what we talked about before, which is, any time a new trend comes out or every time we evolve as an industry, we'll see a lot of excitement. Something is typically positioned as, “This is going to fix all of our problems. This tactic is really going to change the way we market.” It is going to, but it can't stand on its own.

We've seen that, probably about 10 years ago, as we got into online advertising. A lot of people said, “This is it: Banner ads. They're targeted. Forget billboards. We're never going to talk to people that way again, because now we know exactly where they are, what they're doing, what kind of websites they're on.”

It just doesn't work that way, because every single shopper, every customer still has an entire path to purchase. They have this entire journey that we have to consider. Each of those parts plays a crucial role in that decision. When we're just deploying mobile at retail strategy we're not capturing them, in the first place, to get them there.

To Andrew's point, the ability to put a door hanger out, or do something else is a good way to drive them into the store in the first place.

Mike: The other thing that excites me about thinking about the potential and the underutilization of such a ubiquitous tool. If we can do it right, if we can add value to the customer, if we can convince the retailer that this is something that's a part of an overall strategy is what tools does that then uncover?

I read something the other day, that mobile, and near-location, or beacon technology may revolutionize what we use out‑of‑home for…for instance—heck, maybe even door hangers. I haven't read that article yet, but it might be out there.

[laughter]

Mike: That's what so neat about this. It's like we saw with AR, augmented reality. You combine your mobile device in a world of packaging, and you can create an experience that packaging was never intended to do, making it that much stronger. That gets my marketing pants on fire.

Andrew: You got to find a balance in not being too aggressive with some of this mobile technology, and certainly not abusing somebody's trust and willing to offer up their anonymity for value.

Katie: Right.

Andrew: There's a point where empowering the consumer to get the information that they want at the right moment in time is the absolutely the best scenario. It doesn't push the boundaries, people don't get uncomfortable about engaging. They're actually getting value on their terms, but you're leveraging mobile while in store to de‑anonymize that shopper.

Katie: We've talked a lot about the pros and the cons of this technology. Andrew, I'm curious what your advice would be for some of our listeners who are working for a brand and are looking to implement this.

There are a lot of challenges—specifically, there are a lot of stakeholders involved, which is what makes this different than some of the tactics that we talk about. You can go do a media buy and put up a billboard on your own, but when you're dealing with messaging at retail, there are several stakeholders in the game, right? What are some of your tips for helping a brand create this experience and get buy-in from a retailer as well as the shopper?

Andrew: Yeah, great question, Katie. The challenge that every business, every retailer, and every brand has got is [that] they're all going to be different. Big box sells differently and has got a different target market than home improvement and grocery than specialty retail, than entertainment.

There are a lot of sectors in retail that all have different knobs and different foot traffic and different target customers and different profiles…this is very nebulous. You have to start with a partner that understands all of the tactics that can be used.

If you skip the strategy step, all you're doing is playing with toys, and beacons are cool, NFC is cool, commercialized use of shortcodes are great. Everybody knows how to text message, there's no technological barriers to adoption. I'm not a huge fan—nor is anybody—of QR, [but] in some circumstances, QR makes some sense.

All of those are just methods of activation, of customer intercept to get them where the real value is, and that's an engagement. An engagement can create conversion and create loyalty and can create redemptions, in whatever the objectives are, based on the value and strength of the content.

If brands and retailers decide that they want to tinker with mobile and they're enamored with mobile, and without really spending the time with somebody that understands whether a mobile app makes sense or doesn't, all of the activation possibilities that might work for them to create and deliver the right results absent a session and in some time really thinking it through with people that have a big picture as well as a tactical understanding is a bad idea.

Mike: My guess, just based off of the discussion about and some of the questions we've received just working with clients…but also hearing about the app graveyard. Both here and in the media, my guess is [that] we would have to also help them get over the fact that maybe experiment number one didn't go as planned and it doesn't mean the tactic is flawed…perhaps we should rethink the approach.

Andrew: Exactly right. There are methods for getting a solid adoption of the mobile app if the mobile app has value for the consumer. There are a couple of phases with the mobile app.

You want adoption, but what's more important than that is [that] you want reuse. If you can drive—through incentives—the download and adoption, and somebody going through the process of trying to figure out how your app works and where the nuggets of value exist, [and] what happens when you update it?

Now you've got a reintroduction and they've got a relearning process, so there's a bilateral investment that's made when a consumer downloads a retailer or a brand's mobile app that should be long term. A lot of times what happens is a brand or a retailer can get very focused on incentivizing the download, and they don't realize that they have to remind those consumers of a value proposition to continue to use the app so that it becomes habitual and it creates long‑term value.

Katie: I can't tell you how many times I have downloaded an app just to get a one‑time coupon. I see the POP in store and think, “Yeah, I want to save 10 percent right now.” Download it, delete it two days later, because there's nothing to keep me coming back.

Mike: In the past, and I'm generalizing here, which is what we marketers do...we're in the business of judgment and generalization. I'm just kidding, Strategist Katie. Sorry, but generally speaking…retailers:

There is some information about shopping, and it's typically held by retailers, oftentimes as a currency for work with brands. Have you seen a good collaboration between both brand and retailer, and if you don't want to answer it that way, then perhaps: How would you describe the right mix between ownership, involvement, and execution, knowing they have to work together?

Andrew: I believe that the next-generation solution that solves this in‑store retail mobile shopper opportunity, the evolution, has got to be something where there's an equal balance between brands, retailers, and consumers. If the value proposition for any one of the three of those entities is off, then it's the proverbial “three‑legged stool,” and it's going to tip over.

If it's too heavily focused on the consumer and there's not enough value in it for the retailer or the brands, the experience is going to be content limited for the consumer and they will check out. If it doesn't bring value to the retailers, then it's not going to drive the store visits and bigger basket size that a retailer needs to survive.

Historically, the most disenfranchised entity of the three is the brands who sell their products in retail. They get limited visibility as to whether their in‑store marketing dollars actually work and affect consumer behaviors.

For instance, when you're talking about a shopping journey in store, the expectation from a brand is that they've got a merchandised endcap, they've got in‑aisle displays, they've got some in‑store tactics to try to interrupt somebody in their shopping journey to catch their attention. But does the brand ever really know if those displays move behavior?

Maybe 30 days in arrears, if they've got an aggressive in‑store display strategy that they can look at [the] last 30 days’ trended sales and they can see a lift. Even that can be historically too late to adjust an in‑store strategy when it's actually happening, before the dollars are already burned.

There are some really interesting tactics that are not that complex that really involve putting some call to action on in‑store display that both retailers and brands can do today to help them de‑anonymize their shoppers, connect with them, and actually drive a better understanding of whether the in‑store display marketing moves the behaviors of an in‑store shopper.

Mike: In your experience, what do retailers expect from brands in this collaboration? Are there any assumptive roles that they would play in going into creating a mobile experience together and vice versa?

Andrew: That's a great question. I don't think that the expectation from brands by retailers is any different in a mobile experience than it has been, historically, for a non-mobile‑driven experience. They're looking, frankly, for somebody to pay for the media and the outreach and the engagement and the marketing strategy to connect with consumers.

That model doesn’t change. The beauty of mobile is [that] it can facilitate the endless shelf experience. Stores and retailers have only got a very small percentage of eyeball, mid‑aisle, endcap-type premium shelf space.

But if you introduce a mobile experience, you can put the right content from the right brands in front of the consumers based on historical buying decisions, and you can't do that with endcaps. When you marry a mobile strategy plus an in‑store display experience, it can connect with consumers and you get retailers and brands to participate equally.

The value proposition rises the tide for both boats. It's good for the retailers because they got more virtual shelf space to sell. It's good for the brands because they now know specifically that their investment in in‑store marketing dollars are moving behaviors in the consumers and creating sales at the cash register.

Katie: I think the opportunity is huge for brands because, as you've mentioned, historically the onus is on a brand to pay for the endcap, to use their marketing dollars for that. The benefits for the retailer are bigger than ever with a mobile experience. They stand to gain so much more from a brand investing in an experience like that.

We're going to see in the next few years—and we're already seeing it from some brands—that those that adopt this technology really have a leg up on making an impact at some of these big box retailers, and having more opportunities in customer face time than they typically would with a different type of tactic.

Andrew: I think it's important to embrace the psychological reality that consumers have affinity for brands. In some circumstances, there is great affinity for a retailer that may also manufacture some of their own products, but as a consumer, I want to repurchase things that I've had a life experience with. If I can get those through the convenience of a retailer that has inventory and product selection and good pricing and so on, the three entities work well together.

Mike: The app graveyard—we brought it up several times now—why is it so crowded, and how have we—or how have brands and retailers participated in a situation that has created so much frustration, potentially, in what is obviously a great opportunity in mobile?

Andrew: I think that there's been a lot of interest in the possibilities of evolving a retail shopping experience, and many of these brands and retailers have experimented with things like beacons and WiFi gating and geofencing, and some things of that nature. There's been a lot of experimentation with retailers building mobile apps.

This internal initiative of self‑medicating this problem is really the reason that there is so much app graveyard carnage, and the reason that brands' and retailers' investments in trying to evolve and to deliver an in‑store mobile experience are falling short of expectations.

Katie: Absolutely. That being said, there are experts out there, like Andrew, who do this all day long and consult on how to do this correctly, so if you're listening to this podcast and you have questions or you're interested in this, check out our website at ignitepartnership.com. We partner with Andrew and Blue Calypso regularly. We'd happy to have that conversation.

Andrew, thank you so much for being on Technically Human today.

Andrew: Thank you for having me! This has been a lot of fun.

[background music]

Katie: Excellent. As always, we'd love to hear your perspective, we'd love to hear what you're doing with mobile activation at retail. Feel free to tweet us online, shoot us an email, and we will see you next time.

Mike: Ignite Partnership is the marketing agency for technology companies that want to understand and capitalize on complex buyer journeys. Ignite has brought life to tech since 2009. To find out more, visit ignitepartnership.com.

 

Why Mobile at Retail Matters


Technically Human: Episode 5
October 21, 2016

On this episode of the “Technically Human” podcast, we’re talking about why mobile at retail matters. Shoppers aren’t going to give up their smartphones, and savvy retailers and brands know that empowering mobile at retail can lead to increased in-store traffic and engagement. Even better, leveraging mobile technology can open a two-way street of communication between retailers and consumers, leading to the kind of personalized in-store experiences that consumers crave.

Is your brand making the most of mobile at retail? Tweet us @IgniteIdeasNow and share your experiences. Or if you want to have a conversation about how Ignite can help you leverage mobile in-store, be sure to give us a call!

Transcript

[background music]

Katie Cantu: Hi there, I’m Katie Cantu, strategist at Ignite Partnership.

Mike Covert: I’m Mike Covert, founder of Ignite Partnership.

Katie: You‘re listening to “Technically Human,” where marketing experts talk about how to find the soul in technology products and services. What really makes humans tick when it comes to tech? Join us on our cultural expedition to find out.

Katie: This week on Technically Human, we're talking about the value of mobile at retail. Actually, first we're going to talk about what that catchphrase—“mobile at retail”—even means. We know that the way consumers shop brick‑and‑mortar stores is constantly changing.

Mike: And super powerful, Katie. We all have this device, a very powerful device, in our pockets—it’s ubiquitous now. As we're shopping, how do we take advantage of that mobile opportunity?

Katie: Exactly. That's what we're going to find out today with the help of our special guest, Andrew Levi. Andrew is the CEO and founder of Blue Calypso.

Andrew, we're super excited to have you here today. You want to go ahead and introduce yourself to our listeners?

Andrew Levi: Yeah. Thanks, Katie. Our technology platform at Blue Calypso is designed to connect brands and retailers with consumers when they walk through the front door of a brick‑and‑mortar retail location.

Our technology really has the ability to de‑anonymize that shopper and create a direct relationship between the brand and the retailer that sets both the brand and retailer up for out‑of‑store communication with the shopper, creating more loyalty, more advocacy, and enabling both brands and retailers to drive the two things in retail that are most important—bigger basket size and more store visits.

Katie: Perfect.

Mike: It sounds simple. The way you describe it, Andrew, it sounds like this is something that is readily available, has a strong benefit. But what I find when you say this—and I'm using air quotes here for those that can't see me. Actually, none of you can see me, but…“What is mobile at retail?”

From a marketing standpoint, I'm sitting in a lot of client meetings, reading a lot of chatter…It sounds like soup of the day. I'm just curious, Katie and Andrew, what does that mean to you?

Katie: We hear this all the time, and we talk about it all the time with our clients. From a strategy perspective, we've seen the shift that takes place in retail over the years, and we've heard the naysayers proclaiming every year, “Retail is dead. Retail is dying.”

It's not dying. It's just changing. One of the big ways it's changing is that we all have this super powerful mini-computer with us all the time. I think the interesting dynamic there is [that] a lot of retailers see that as a threat. They see that shoppers are going on to their mobile device, and they may be saving something, comparing prices, actually ordering something online, just showrooming, for example, in a Best Buy.

I think there's a unique opportunity there to leverage that device and to create a personal line of communication with the shopper. To me, when we talk about mobile at retail, we're talking about ways that we can, just like you said, Andrew, de‑anonymize the shopper.

How can we make a connection with them, build loyalty, provide something of value in the retail space that's actually going to convert to sales?

Andrew: Those are great points. The reality of today's shopper is [that] they've all become very data driven, thanks to the smooth and ease accessibility that Amazon and other e‑commerce platforms present to anybody sitting at their home, perhaps in their underwear, shopping for a new mobile device, or even something as commoditized as paper towels.

The nice thing about an online experience is [that] it really puts all the data necessary for today's consumer to make a decision, an instantaneous shopping decision, without much further research.

You get product reviews, people that bought this also bought that, a wealth of detailed information about a specific item. You can do price comparisons, and this can all happen within seconds with a big fat button at the bottom of one screen that says “Buy now.”

The opportunity for brick‑and‑mortar retail, which…people think that e‑commerce and online transactions have eclipsed brick‑and‑mortar, and that's far from the truth. Really, the stats show that the percentage of e‑commerce transaction as a percentage of total retail purchasing is still less than probably 20‑25 percent.

It has not eclipsed the physical experience that can happen in store. So what retailers have the unique ability to do is [to] create an experiential path to purchase in store for shoppers that will never happen online. You've got the ability in physical retail to tantalize all five senses.

Some people like to squeeze the grapefruits, and they like to smell the leather of the car that they're going to buy. Those are things that some day we may be able to get via an Internet experience, but today, retail still has that leverage.

Brands and retailers have got to figure out how to embrace this opportunity, not be afraid of it, and most retailers and brands are experimenting, but the opportunity is now, because every single shopper that walks through the front door of any retailer, number one, is anonymous until they're not; and likely they're not anonymous in retail, [if] only at the point of purchase

You walk through the front door, maybe I'm a participant in the retailer's loyalty program, but the retailer doesn't have an opportunity to affect my path to purchase and buying decision until I'm actually at the cash register checking out, which is kind of too late to grow a basket size.

Maybe the loyalty program was leveraged to drive foot traffic, but is the loyalty strategic enough to compress store visits? There's a lot of moving parts to this, but the one common denominator is every shopper that walks through the front door of every retailer has a smartphone in their pocket. They know how to use it.

Mike: All the benefits…you guys are right on, both from a benefit to the retailer [to] the customer experience, and what we're finding is that retail—brick‑and‑mortar—has a role in the decision‑making process.

Amazon is opening brick‑and‑mortar stores, if you want a case in point that it has a role. It just depends on where that role is. My question is—it sounds obvious, and this is what we talk about with clients—if it's so obvious that we need to utilize this mobile landscape, this mobile opportunity, to enhance the shopping experience, why don't we see as much mass traction as I would expect to at this point? It feels like it's more talk than action, but I'm curious your perspectives on that.

Andrew: I believe retailers look at experimenting and considering deployment of a mobile‑driven solution as a risk. I think the risk is not doing it right now. There are a lot of technologies that can overcome the intercept, the at‑front‑door activation, and the engagement in store. There's a lot of really neat stuff out in the market right now.

I do think it is still early stage in the adoption curve, and therefore, what I'm seeing retailers gravitate to is something they can wrap their head around as a consumer, and that's building a mobile app.

The problem with retailers building a mobile app…The good thing is that they're trying something. They're experimenting…

[crosstalk]

Mike: Most of the major retailers have some—or have experimented with some sort of app, cross channels, right?

Andrew: That's right, and I applaud retailers for doing some experimentation, but by this point, with some exceptions, retailers are learning quickly that we as consumers don't want to have a mobile app for every retailer that we shop at.

Katie: Yeah, it’s overwhelming.

Andrew: Overwhelming. They end up in the app graveyard. It was a nice test. It can be a very expensive test, depending upon what the initiative is, but in my opinion, that's a bad strategy long‑term for retailers, because it's not sustainable, and it creates too much confusion. Therefore, the adoption is not going to happen.

It's an investment that the retailer makes. It's not one‑and‑done. It's one, and you're starting, and you've got a lifetime of continued evolution and development. But I like to see them doing something.

If they are successful in deploying a mobile app for the retail location, it sets them up for potentially deploying beacons. Beacons are very cool. I love the hyper-local sensitivity that a beacon can deliver to the consumer when they're in store and impact the purchase, particularly at the front door.

You know they're at the front door. You know they're walking in. You know they're leaving, or departmentally, or even around specific displays and possibly some of the experiential things that we've talked about—driving people to experience different things, [like] food sampling or test drives in cars.

There's a lot of neat application there, but…no app, no beacon. If the retailer can't get the adoption of their mobile app, then the chances that a beacon strategy is going to work for them is pretty low, if not zero.

Mike: What about from the customer standpoint or the consumer standpoint, Katie? I think Andrew is talking about a real hesitancy when it comes to the right experience and the right investment to test the mobile opportunity.

Are you seeing, in what you see out there, that consumers are as willing to test experiences using their mobile device though apps or beacons or whatnot? What might be hesitating their adoption [of] or their participation in it?

Katie: Andrew made a good point when it comes to adoption rate, and specifically when we look at shoppers and what they're willing to participate in, one of the things that we're seeing a lot is [that] there's this fine line, right? We've come to a point where shoppers expect personalization.

They're living in an Amazon world, they're living in a world where reviews are at their fingertips. It's irritating when a brand that you purchase from frequently doesn't know you or understand you…

But on the other hand, right across the fence there, it gets creepy. I don't want to give up too much of my personal information, I am being tracked, they know exactly what I want. You've heard these stories of people saying, “Oh, my gosh. Target knew I was pregnant before I did and I was getting diaper coupons in the mail.”

[laughter]

Katie: People still have...there's a sense that they want to hold on to their identity. I think a lot of us have probably given up. [laughs] I know I've just said, “I'd rather have a personalized experience at this point. I don't have anything to hide.”

But I think what we're seeing with shoppers, specifically in a retail environment, [is that] it's one thing online to be tracked. It's one thing to be at home and for a website to make recommendations; it's another to be in a public environment.

In a retail space, there's a sense of fear, right? You're not alone. For somebody to be watching you or to be tracking you…

Mike: A little different than when you're in your underwear on your couch, right?

Katie: Exactly. It's a...

Andrew: Hopefully it's a little different.

Katie: Yeah.

[laughter]

Katie: It's alarming, because you don't feel as much that you're in a safe space or you have as much control over your environment, I think.

Mike: I think that's a really good point, just melding those two experiences. The other thing that I hear, and have experience [with] as a shopper and not just a marketer, is a lot of this information—even offers, reviews—they're available to me on that device without me having to give up my identification.

What experiences, including those, are going to encourage me to trade that off? Then, the retailers don't get good experiences where they have an app or using a beacon or some other more universal technology that you obviously know a lot about, Andrew. What will encourage me to pull the trigger and engage as Mike, not an anonymous shopper?

Andrew: There's really no simple answer for that. Every person is going to have a different tipping point in the value proposition of surrendering their anonymity to a brand or a retailer. It's going to be personal as to what moves the needle. It's also going to be real specific to the brand.

I think it's obviously important that brands experiment and spend a lot of time thinking about the psychology of what does it take to get somebody that has some level of brand affinity to de‑anonymize themselves and become part of the tribe. The easy answer is, it's discounts, coupons, deals, offers.

People like VIP experience and if they feel like not participating is going to keep them outside the velvet rope, then there is some incentive to cross over, because the other side of the velvet rope is going to be a much better experience than watching from the outside, watching from the stands.

That chasm‑crossing event is personal and very specific to the brand, but I don't believe it's always about discounts. I think it's getting access to something, some piece of content, some product, getting a first look at the 2017 new car if you're a car aficionado.

There are things [that], as data is assimilated and becomes an indicator of me and my DNA and the things that are important to me, the things that I like, the things that I don't like…brands and retailers can anticipate and be more predictive and much more targeted in putting things in front of me that are valuable and will cause me to engage.

The constant barrage of noise that a lot of the people that are trying to leverage mobile use to try and change behaviors with people will actually repel the consumer from the brand and from engaging, and it will cause him to check out.

Mike: Do you also agree with the VIP experience getting beyond the low‑hanging fruit that we hear in these conversations—“Put a discount at it,” “Throw a coupon on it or an extra point.” What else have you seen, Katie, that elevates the experience, not elevates the transaction?

Katie: Absolutely. I 100 percent agree with that, and I think this is usually the case. As we see a new tactic and a new approach and a new trend, the cycle repeats itself of the way that we approach marketing.

You could look back 10-15 years ago and look at a couponing strategy and see that a lot of brands were relying heavily on that, but eventually, they progressed to a more experience‑based way of marketing and fostering relationships. I think that's the same thing we're going to see with mobile at retail. There are several brands that are already doing that well.

Andrew talked a minute ago about a lot of retailers [having] created an app that's proprietary to them, and while there are a lot of problems with that, it's overwhelming to have so many apps and, like Andrew said, they end up in the app graveyard and you delete them. But I do think it's been an entry point for some brands who really understand their customers' journey.

We've talked about a couple of those before. The ones that come to mind are Starbucks, Target's Cartwheel app. Even though that is a standalone app, they've really done a good job of engaging the shopper throughout the store and, while that's discount‑based, there's a lot of added value to shopping lists helping you guide your way through the store, creating loyalty programs, access to first listens on a Taylor Swift exclusive album.

They've really transitioned away from the couponing strategy that so many brands relied on in the late '90s.

Mike: Target, I believe—and it's been a while since I've really gone deep into their strategy specifically across the board—but there's a treasure hunter component to that shopper and they like the discovery. In that case, discounting as a way in makes a lot of sense, as long as it's not exclusive to that and there's a reason to remain engaged.

Also, another thing to keep in mind, and this is probably as much from the retailer perspective and understanding the customer journey, but also the frequency of visit, and how often would you expect someone to engage.

Target, my guess, has a pretty frequent visitor, compared to other specialty retail stores that are more specifically focused on, say, technology products. I don't know that to be true, but the use or occasions, just by range of product they carry, is a little broader.

You can anticipate tapping into a Cartwheel a little more often, which also allows you to vary up the content, utilize cross‑sell, and really make it a part of the retail strategy to get around the store.

Katie: Right. If you look at Target's just overall strategy right now, and the way they've built their brand in the past five years, even if you look to their above-the line-campaigns, they're really centered. They've built brand around “a Target run,” and the adventure, and going to Target to discover new things.

You're right. It's a perfect fit. The lesson for other brands and retailers is, they used a coupon as a carrot to get somebody into the door, but then they built upon that experience to keep someone coming back.

We're still in a phase right now where we see a coupon here and there for a brand, somebody issues an offer over a beacon, but it's not enough to build a relationship to get somebody to keep coming back. Are you seeing that at all, Andrew?

Andrew: Actually, I have seen some of these legacy loyalty programs, that use recurring, predictable discounts as, really, a way of eroding margins, not necessarily building brand loyalty. There are pharmacies and big‑box retailers that, predictably, every 30 days there's a 30 percent discount that's delivered out to the people that are a part of the loyalty program.

What happens is people come to understand the cadence of those discounts, and they'll accumulate their purchases on a shopping list. You know when they go? Only when they get the 30 percent discount.

All you end up doing is actually creating a behavior in your shopping community that is very cannibalistic to the gross margins of your brand. The loyalty program is actually destructive to the business.

Mike: A more strategic use of those carrots to change behavior, you're absolutely right. You bring up the notion of some different axes to pull on to incent behavior that a traditional couponing strategy wouldn't be able to do. Meaning, wherever you got it—an email, mail—on Tuesday, you know it expires on Sunday…I call this “the Bed, Bath & Beyond effect.”

Katie: Exactly, that's just what I was thinking. Yeah.

Andrew: Exactly. Literally, that's where my example comes from.

Katie: It's like, “I'm not going to go to Bed, Bath & Beyond if I don't have the coupon.”

Andrew: 30 percent discount!

Mike: What's killer is then they just give you one at the register.

Katie: I know. I know.

Andrew: Yeah.

Mike: It pains me every time that happens for them.

Andrew: Let's be clear, that is coupon fraud, and it has been rampant in retail forever. Mobile can fix coupon fraud overnight, if people will adopt.

Katie: Right.

Andrew: There are economic value points to deploying a more mobile‑centric strategy for these retailers that will have an immediate effect on their bottom line.

Mike: What are some of those other ways? Let's take discounting. That seems to be the more universally accepted reward, or some sort of purchase incentive.

Katie: Or at least the entryway in to adoption.

Mike: Yeah. How can mobile allow retailers to use, what is their already accepted tactic, more strategically?

Andrew: Easy. If everybody gets the 30 percent discount, that's a lazy loyalty program. The beauty of mobile, and big data, is that that loyalty can be highly tailored to me. I'm not horizontally offering 30 percent off, I can drive behaviors to create a bigger basket size, and more frequency of visit, that's not horizontal and 30 percent off if you come in by Sunday.

Then there's the, again, predictive nature of, “Every month I'm going to get my 30‑percent‑off coupon.”

These are fairly complex loyalty programs to put in place, that are all data driven. But in today's world of technology, they're not rocket science any more. There are great loyalty solution providers and technology platforms that can easily replace the legacy platforms that are virtually as easy to customize and tailor. They've got a lot of artificial intelligence and predictive analytics built into them that can make sure that the rewards for you are going move your behavior, but they're not the same rewards that are going to move behaviors for all shoppers.

Mike: Katie gets something different than me, because we obviously shop differently.

Andrew: That's right. It doesn't have to be a 30 percent discount for everybody.

Mike: Another interesting deployment that makes me excited [is], if anyone's had a marketing opportunity to build a lagging market. It means, nationally, things seem to be going very well, and there are some anomalies out there in key markets, that really need to get beefed up.

It seems to me, mobile would allow us to more specifically target by location and deploy in a more controlled way than some of the other mediums would, if we knew who you are.

Andrew: Absolutely. The other thing that mobile gives you the ability to do is understand geographically relevant circumstances. Things like weather. Weather can drive different incentives.

If I sell umbrellas, and it's pouring outside, the immediate knee‑jerk reaction is to discount umbrellas. Well, the reality is [that] you should probably raise the prices.

Katie: Right. Supply and demand.

Mike: Cancel that 30 percent. [laughs]

Andrew: Yeah. Why discount if it's raining outside, when you don't have to? All you're doing is you're giving away margin that you don't have to.

Mike: For instance, if a product is selling well in one area, why give it a universal discount to cover off on the areas that it's not selling as well. Instead, you can deploy the same incentive or investment towards a complementary product that they may not have otherwise have considered.

That is a more strategic way to look at different ways of applying that incentive, depending on where you are and who you are. As you said before, seasonal factors, time factors, et cetera. Doesn't that sound hard to control?

Don't you find retailers saying, “Who is going to control all those factors and have all these different incentives out there at different times? “ Is that a hard thing to sell in?

Andrew: It's not trivial to administrate a program like that, but it's not rocket science either.

One of the things mobile gives a retailer insight [into] is potentially how far away a store shopper lives from one of their physical locations. When you can extrapolate their drive distance, and then understand more about that shopper, some basic demographics, how many kids do they have, household income, you can then extrapolate that and segment that to understand what their neighbors, basically, look like—people associate with people of like minds.

Then, potentially, apply other tried-and-true marketing techniques, things like direct mail, even door hangers, which seem a little faux pas to talk about in a high tech conversation like this. Some of these old, proven techniques are not quite as noisy as they used to be, and therefore, you can get a better conversion rate on some things that, historically, might have been abandoned.

Mike: You bring up a really important point there, that, generally speaking, if you've listened to this podcast before you know that we believe in the world of omnichannel, and that no singular tactic solves all. It's a journey. There are a lot of inputs along the way.

Is that something that we bear the burden of, Katie, as marketing strategists, to show how mobile can also enhance other efforts? It's not “Do less of this to support that,” it's exponential.

Katie: Absolutely. This is similar to what we talked about before, which is, any time a new trend comes out or every time we evolve as an industry, we'll see a lot of excitement. Something is typically positioned as, “This is going to fix all of our problems. This tactic is really going to change the way we market.” It is going to, but it can't stand on its own.

We've seen that, probably about 10 years ago, as we got into online advertising. A lot of people said, “This is it: Banner ads. They're targeted. Forget billboards. We're never going to talk to people that way again, because now we know exactly where they are, what they're doing, what kind of websites they're on.”

It just doesn't work that way, because every single shopper, every customer still has an entire path to purchase. They have this entire journey that we have to consider. Each of those parts plays a crucial role in that decision. When we're just deploying mobile at retail strategy we're not capturing them, in the first place, to get them there.

To Andrew's point, the ability to put a door hanger out, or do something else is a good way to drive them into the store in the first place.

Mike: The other thing that excites me about thinking about the potential and the underutilization of such a ubiquitous tool. If we can do it right, if we can add value to the customer, if we can convince the retailer that this is something that's a part of an overall strategy is what tools does that then uncover?

I read something the other day, that mobile, and near-location, or beacon technology may revolutionize what we use out‑of‑home for…for instance—heck, maybe even door hangers. I haven't read that article yet, but it might be out there.

[laughter]

Mike: That's what so neat about this. It's like we saw with AR, augmented reality. You combine your mobile device in a world of packaging, and you can create an experience that packaging was never intended to do, making it that much stronger. That gets my marketing pants on fire.

Andrew: You got to find a balance in not being too aggressive with some of this mobile technology, and certainly not abusing somebody's trust and willing to offer up their anonymity for value.

Katie: Right.

Andrew: There's a point where empowering the consumer to get the information that they want at the right moment in time is the absolutely the best scenario. It doesn't push the boundaries, people don't get uncomfortable about engaging. They're actually getting value on their terms, but you're leveraging mobile while in store to de‑anonymize that shopper.

Katie: We've talked a lot about the pros and the cons of this technology. Andrew, I'm curious what your advice would be for some of our listeners who are working for a brand and are looking to implement this.

There are a lot of challenges—specifically, there are a lot of stakeholders involved, which is what makes this different than some of the tactics that we talk about. You can go do a media buy and put up a billboard on your own, but when you're dealing with messaging at retail, there are several stakeholders in the game, right? What are some of your tips for helping a brand create this experience and get buy-in from a retailer as well as the shopper?

Andrew: Yeah, great question, Katie. The challenge that every business, every retailer, and every brand has got is [that] they're all going to be different. Big box sells differently and has got a different target market than home improvement and grocery than specialty retail, than entertainment.

There are a lot of sectors in retail that all have different knobs and different foot traffic and different target customers and different profiles…this is very nebulous. You have to start with a partner that understands all of the tactics that can be used.

If you skip the strategy step, all you're doing is playing with toys, and beacons are cool, NFC is cool, commercialized use of shortcodes are great. Everybody knows how to text message, there's no technological barriers to adoption. I'm not a huge fan—nor is anybody—of QR, [but] in some circumstances, QR makes some sense.

All of those are just methods of activation, of customer intercept to get them where the real value is, and that's an engagement. An engagement can create conversion and create loyalty and can create redemptions, in whatever the objectives are, based on the value and strength of the content.

If brands and retailers decide that they want to tinker with mobile and they're enamored with mobile, and without really spending the time with somebody that understands whether a mobile app makes sense or doesn't, all of the activation possibilities that might work for them to create and deliver the right results absent a session and in some time really thinking it through with people that have a big picture as well as a tactical understanding is a bad idea.

Mike: My guess, just based off of the discussion about and some of the questions we've received just working with clients…but also hearing about the app graveyard. Both here and in the media, my guess is [that] we would have to also help them get over the fact that maybe experiment number one didn't go as planned and it doesn't mean the tactic is flawed…perhaps we should rethink the approach.

Andrew: Exactly right. There are methods for getting a solid adoption of the mobile app if the mobile app has value for the consumer. There are a couple of phases with the mobile app.

You want adoption, but what's more important than that is [that] you want reuse. If you can drive—through incentives—the download and adoption, and somebody going through the process of trying to figure out how your app works and where the nuggets of value exist, [and] what happens when you update it?

Now you've got a reintroduction and they've got a relearning process, so there's a bilateral investment that's made when a consumer downloads a retailer or a brand's mobile app that should be long term. A lot of times what happens is a brand or a retailer can get very focused on incentivizing the download, and they don't realize that they have to remind those consumers of a value proposition to continue to use the app so that it becomes habitual and it creates long‑term value.

Katie: I can't tell you how many times I have downloaded an app just to get a one‑time coupon. I see the POP in store and think, “Yeah, I want to save 10 percent right now.” Download it, delete it two days later, because there's nothing to keep me coming back.

Mike: In the past, and I'm generalizing here, which is what we marketers do...we're in the business of judgment and generalization. I'm just kidding, Strategist Katie. Sorry, but generally speaking…retailers:

There is some information about shopping, and it's typically held by retailers, oftentimes as a currency for work with brands. Have you seen a good collaboration between both brand and retailer, and if you don't want to answer it that way, then perhaps: How would you describe the right mix between ownership, involvement, and execution, knowing they have to work together?

Andrew: I believe that the next-generation solution that solves this in‑store retail mobile shopper opportunity, the evolution, has got to be something where there's an equal balance between brands, retailers, and consumers. If the value proposition for any one of the three of those entities is off, then it's the proverbial “three‑legged stool,” and it's going to tip over.

If it's too heavily focused on the consumer and there's not enough value in it for the retailer or the brands, the experience is going to be content limited for the consumer and they will check out. If it doesn't bring value to the retailers, then it's not going to drive the store visits and bigger basket size that a retailer needs to survive.

Historically, the most disenfranchised entity of the three is the brands who sell their products in retail. They get limited visibility as to whether their in‑store marketing dollars actually work and affect consumer behaviors.

For instance, when you're talking about a shopping journey in store, the expectation from a brand is that they've got a merchandised endcap, they've got in‑aisle displays, they've got some in‑store tactics to try to interrupt somebody in their shopping journey to catch their attention. But does the brand ever really know if those displays move behavior?

Maybe 30 days in arrears, if they've got an aggressive in‑store display strategy that they can look at [the] last 30 days’ trended sales and they can see a lift. Even that can be historically too late to adjust an in‑store strategy when it's actually happening, before the dollars are already burned.

There are some really interesting tactics that are not that complex that really involve putting some call to action on in‑store display that both retailers and brands can do today to help them de‑anonymize their shoppers, connect with them, and actually drive a better understanding of whether the in‑store display marketing moves the behaviors of an in‑store shopper.

Mike: In your experience, what do retailers expect from brands in this collaboration? Are there any assumptive roles that they would play in going into creating a mobile experience together and vice versa?

Andrew: That's a great question. I don't think that the expectation from brands by retailers is any different in a mobile experience than it has been, historically, for a non-mobile‑driven experience. They're looking, frankly, for somebody to pay for the media and the outreach and the engagement and the marketing strategy to connect with consumers.

That model doesn’t change. The beauty of mobile is [that] it can facilitate the endless shelf experience. Stores and retailers have only got a very small percentage of eyeball, mid‑aisle, endcap-type premium shelf space.

But if you introduce a mobile experience, you can put the right content from the right brands in front of the consumers based on historical buying decisions, and you can't do that with endcaps. When you marry a mobile strategy plus an in‑store display experience, it can connect with consumers and you get retailers and brands to participate equally.

The value proposition rises the tide for both boats. It's good for the retailers because they got more virtual shelf space to sell. It's good for the brands because they now know specifically that their investment in in‑store marketing dollars are moving behaviors in the consumers and creating sales at the cash register.

Katie: I think the opportunity is huge for brands because, as you've mentioned, historically the onus is on a brand to pay for the endcap, to use their marketing dollars for that. The benefits for the retailer are bigger than ever with a mobile experience. They stand to gain so much more from a brand investing in an experience like that.

We're going to see in the next few years—and we're already seeing it from some brands—that those that adopt this technology really have a leg up on making an impact at some of these big box retailers, and having more opportunities in customer face time than they typically would with a different type of tactic.

Andrew: I think it's important to embrace the psychological reality that consumers have affinity for brands. In some circumstances, there is great affinity for a retailer that may also manufacture some of their own products, but as a consumer, I want to repurchase things that I've had a life experience with. If I can get those through the convenience of a retailer that has inventory and product selection and good pricing and so on, the three entities work well together.

Mike: The app graveyard—we brought it up several times now—why is it so crowded, and how have we—or how have brands and retailers participated in a situation that has created so much frustration, potentially, in what is obviously a great opportunity in mobile?

Andrew: I think that there's been a lot of interest in the possibilities of evolving a retail shopping experience, and many of these brands and retailers have experimented with things like beacons and WiFi gating and geofencing, and some things of that nature. There's been a lot of experimentation with retailers building mobile apps.

This internal initiative of self‑medicating this problem is really the reason that there is so much app graveyard carnage, and the reason that brands' and retailers' investments in trying to evolve and to deliver an in‑store mobile experience are falling short of expectations.

Katie: Absolutely. That being said, there are experts out there, like Andrew, who do this all day long and consult on how to do this correctly, so if you're listening to this podcast and you have questions or you're interested in this, check out our website at ignitepartnership.com. We partner with Andrew and Blue Calypso regularly. We'd happy to have that conversation.

Andrew, thank you so much for being on Technically Human today.

Andrew: Thank you for having me! This has been a lot of fun.

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Katie: Excellent. As always, we'd love to hear your perspective, we'd love to hear what you're doing with mobile activation at retail. Feel free to tweet us online, shoot us an email, and we will see you next time.

Mike: Ignite Partnership is the marketing agency for technology companies that want to understand and capitalize on complex buyer journeys. Ignite has brought life to tech since 2009. To find out more, visit ignitepartnership.com.