DR Gets Smart About Mobile1 Jan, 2011 By: Nicole Urso Reed Response
Multi-channel advertising becomes a real life, sci-fi adventure thanks to the explosion of smartphones, with Apple, Android and Blackberry leading the way.
“One of my favorite trends from the survey comes from a question we literally added at the last minute,” Ellen Davis, an NRF vice president and spokesperson, stated in the report. “Knowing that retailers were ramping up their mobile apps and Web sites — and understanding that iPhones and Droids are all the rage — we wanted to get a sense of how mobile devices would impact holiday shopping this year. So we asked people with smartphones if they planned to use their devices to research or make holiday purchases from a retailer.”
The consumer survey paralleled NRF forecasts. A quarter of respondents with smartphones said they would shop, research products, and hunt for bargains with their mobile devices. That number skewed higher (nearly 45 percent) among 18- to 34-year-olds.
Shop.org, the NRF’s digital division, investigated Cyber Monday trends in the U.S. and found that 106.9 million people planned to shop on Cyber Monday, up from about 96.5 million in 2009. The majority of shoppers said they would use their home computer (89.5 percent, or 96 million people). However, more than 7 million people (6.9 percent) planned to use a mobile device, nearly double the estimated 4 million who shopped mobile in 2009 (3.8 percent).
Comparison shopping was especially important in 2010 as holiday spending slowly recovered and judicious shoppers searched for discounts. According to the NRF, 61.7 percent of shoppers said that the economy would impact their spending — more than 54 percent looked for sales and used coupons, and 30 percent did comparison shopping online.
A variety of mobile coupons and smartphone applications or "apps" incentivized shoppers to visit brick-and-mortar retailers. By having their smartphones on hand, they could "kick the tires" in the store and make purchases by phone. Price Check, Amazon’s latest app, uses the iPhone’s camera to scan barcodes, check prices and return product inventory on its own site and others. Shopkick, another free app, rewards shoppers with gift cards and other perks just for visiting retailers in person and scanning product bar codes.
The Evolution of ‘As Seen on TV’
Comparison shopping may seem counterintuitive to the energy and impulse of direct response, but the industry is integrating mobile technology in various ways to complement existing campaigns.
Internet analyst and former managing director at Morgan Stanley, Mary Meeker delivered a “State of the Web” presentation at the Web 2.0 Summit in November 2010 demonstrating that mobile users are growing 11 times faster than desktop Internet users and will outpace them by 2015.
Brad Feldman, president and developer of the As Seen On TV Official App, available for free in the iTunes App Store and also for Android phones, believes that all signs point to mobile apps as being the next frontier of direct response shopping.
“What we’re seeing is that the preferred way to engage with your mobile device is through apps,” says Feldman, who is based in South Pasadena, Calif. “So if you have smartphones growing really fast, and mobile commerce growing really fast, and the preferred way to use mobile is apps, then the question becomes, ‘How do you, as a small company — a DRTV company — take advantage of this platform?’”
DR marketers merchandise their products on the app for free and pay a service fee for each transaction. Back-end logistics and order fulfillment stays the same. For further integration, marketers can embed the As Seen On TV Official App icon within an existing commercial along with a keyword, such as the name of the product. Consumers log into the app, find the product and click to call or click to buy, or they can use the app to browse product categories and discover deals.
The app launched in October, coinciding with the Electronic Retailing Association’s annual conference. BJ Fazeli, president of Irvine, Calif.-based BJ Global Direct, was the first marketer to help actualize Feldman’s vision. He put several of his products behind the mobile storefront because, as he explains, after marketing his products on TV, online and in the movies, the only screen missing was the smartphone.
“We didn’t want to just make an app for ourselves,” says Fazeli. “We wanted to make sure that this is a platform for the industry. There are a couple of other people that have already done their individual app, but it’s not the same when it’s the industry ‘mall’ on the smartphone. So every marketer can tap into the same technology, and by promoting this one site, we can get a lot more market willingness and more and more people can start going to the same portal and pick out the products that they want.”
There are more than 70 products merchandised on the app, and there is an obvious demand for more — most consumers in the iTunes App Store commenting on the app say they want more products, and that the one they wanted wasn’t there. Feldman and Fazeli were guarded about the actual number of products sold, saying that it is too early and that they are still in the testing phase. However, Feldman says that inventory is building quickly.
“The beauty of this app is, on the front end, it’s just one entry door, but on the back end it goes to different fulfillment and works with all different backend logistics,” says Fazeli. He compares it to Amazon, the retail giant heavily invested in mobile commerce.
Novelty or Necessity?
It’s unlikely to have a conversation about the future of mobile without citing the success of Amazon and eBay. On last year’s first-quarter earnings call, eBay CEO John Donahoe forecasted that users would buy $1.5 billion of merchandise via the eBay app in 2010, almost triple the volume of 2009.
The adoption of smartphone usage and the growth of mobile commerce led by these mobile retailers are undeniable. However, not everyone is convinced that traditional direct response marketers should hurry up, act now and integrate mobile.
Ken Osborn, president and CEO of Bridgeport, Conn.-based Liquid Focus Direct, tested direct response marketing on mobile devices but found that it didn’t pay out for a direct sale. Although he is optimistic about the advent of mobile, he’s not convinced that the industry is ripe for it just yet.
“If you’re doing lead-gen, go for it,” says Osborn. “If you’re doing traditional DR, then I don’t see it applying much. How are people going to click over and buy from a cell phone, at least with today’s technologies and the rudimentary delivery styles the Web pages of mobile phones permit? How many phones don’t allow for Flash? Heck, you can’t even see Flash on an iPad yet. We’re just not there yet.”
Adobe Flash is a platform that enables Web sites to integrate rich media, such as animation and interactive features. Apple’s products do not support the technology, which has frustrated users who cannot view content from their favorite Web sites on an iPhone or iPad. This is a point of contention between Adobe and Apple CEO Steve Jobs who argues that Web developers are moving toward HTML5, a new and improved platform that will be better for rich media and interactivity.