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OPINION

We spend a lot of time thinking about the mobile shopper and the world she lives in. Here are some thoughts...

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HUG A SHOWROOMER TODAY

As featured by the IMRG, 17th April

BY PHIL GAULT
2013/04/17
When it comes to retail marketing, you’d be hard pressed to find a hotter topic than ‘showrooming’ right now. In one sense, this is a bit odd. You could argue that the behaviour’s existed for as long as there’s been brand and retail competition. Certainly Dixons.co.uk were on to it way back in 2009 with their famous ‘Now buy it at…’ poster campaign.

So why the current focus? Well, in a word: smartphones. They’ve made showrooming vastly more prevalent (and visible). Their growth has turned a fact of life into a significant business issue.

No Passing Fad


A recent survey by JiWire found that 94% of smartphone-empowered shoppers use their device in-store; 60% of whom are comparing prices. Not surprising, then, that 80% of US retailers think showrooming depresses their sales by 5% or more (source: Edgell Network). Nor that Amazon and eBay are reporting stellar growth in mobile revenues.

This adds up to disruption on a massive scale. But turn round the telescope, and it also represents a huge, possibly unparalleled opportunity for physical retail.

Accentuate The Positive


People want to showroom – so lean into the behaviour in ways that enhance bricks and mortar’s intrinsic advantages of being Sensory, Social, Spontaneous and Service-led. Use the phenomenon to amplify your brand proposition. Exploit it to satisfy your shoppers’ appetite for richer, more interactive experiences.

By ‘hugging’ a showroomer, you’ll create the opportunity to identify customers when they enter your store. Combine that with the latest solutions like Sponge’s Shopper Marketing Platform, and there’s potential to deliver individually relevant content to people whilst they’re in the act of shopping.

Why Wi-Fi Matters


Of course, to start making all this happen, you need the right infrastructure – and Wi-Fi is a key component.

According to JiWire, the availability of free Wi-Fi is becoming a driver for shoppers: three quarters claim it exerts some influence on their store choice. So its provision is simultaneously important to your service proposition and (for the reasons detailed above) a core building-block for in-store mobile marketing.

To understand how brands are responding to these twin opportunities, and to explore what sort of user experience they offer, we conducted mystery shopper visits to 117 retailers in and around Oxford Street.

The findings surprised us.

Opportunities Missed


Just 28 of the retailers offered free Wi-Fi – and far fewer clearly communicated its availability. This seems negligent; you can hardly expect shoppers to thank you for something of which they’re unaware.

Even more significant was Missed Opportunity #2. Whilst half of those offering Wi-Fi took the opportunity to collect data, the sort of value exchange required to ensure high quality was noticeably absent; nor did we find any evidence of brands exploiting the channel to deliver compelling, contextually relevant content.

There seems to be a story behind the story here. Most current contracts appear skewed to the benefit of the Wi-Fi provider, certainly in terms of the user intelligence collected.

As retailers seek to capitalise more fully on the potential of Mobile Shopper Marketing in-store, we can expect to see a step-change in these commercial relationships.

As featured by the IMRG on the 17th April. Read Article

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WE'RE EXHIBITING

Come and see Shopper Marketing in action

BY PHIL GAULT
2013/03/04
We’re exhibiting at Retail Week Live and Retail Business Technology Expo this month.

Day by day, Mobile’s influence is growing across every part of the shopper journey. Whilst this is causing many to predict the final death of the High Street, we believe it actually represents a massive opportunity for retailers of all types.

We’re developing a highly innovative Shopper Marketing solution to help retailers (and FMCG brands) capitalise on this potential, which we’ll be demo-ing at Retail Business Technology Expo on 12th – 13th March and at Retail Week Live on 13th – 14th March.

We’ll also be showcasing a range of technologies that can create effective connections between your brand and your customer; and that do so in ways that can help amplify the High Street’s intrinsic advantages of being Sensory, Social and Service-led.

If you’re going to either event, do come and say hello. If you’re not, please email bill.maclachlan@spongegroup.com and we’ll set up a private viewing.
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RE-INVENTING LOYALTY SCHEMES

For the smart-phone empowered shopper

BY PHIL GAULT
2013/02/25
There is continuing debate as to whether Technology changes human needs. But what is clear is how fundamentally it impacts our attitudes, behaviours, expectations and how we interact with the world around us. Mobile is a particularly powerful example.

By removing the friction of time and place, smartphones give us an unprecedented level of control. Having perfect information and social connectivity at our fingertips 24/7 represents an enormous shift in the balance of power; and inevitably, this is altering the nature of the relationship we have with brands. Not only are we increasingly demanding in terms of product and service quality, we are looking for new kinds of utility and value. In particular, we are gravitating towards brands that help us get more out of our resources; especially resources like money, attention and location that are generally scarce and therefore highly prized.

Which brings us to the topic of Loyalty Schemes.

Consumer appetite for such schemes is high: two-thirds of UK shoppers now belong to three or more programmes. This is hardly surprising: who doesn’t want something for (apparently) nothing, especially in this economy? And companies are keen to meet the demand, recognising that Loyalty Schemes can help maximise share-of-wallet and, just as importantly, provide insight into how customers shop across channels.

Most brands would say that their programme is commercially effective. So why should they re-invent it?

Sponge’s view is that the more Loyalty Schemes proliferate, the more shoppers see them as simply ‘entitlements’. This is partly due to familiarity, and partly because the standard Collector model has become commoditised: I receive one asset (points) in exchange for another (money). There’s a predictability and a proportionality about this that feels flat, uninvolving and out of step with the dynamic individuality of people’s digital behaviours.

Smartphones are driving much of that behaviour; and it follows that Loyalty Schemes should become mobile-first if they are to satisfy shoppers’ radically heightened expectations. In other words, brands need to fight fire with fire.

For maximum effect, we believe programmes should be re-invented around three key principles, all focused on delivering Customer Empowerment:

Recognise shoppers prior to purchase

For marketers, mobile has two exceptional advantages. First, a mobile number is a highly accurate and durable identifier: unlike an email address, there’s every probability that we’ll keep the number we get in our early teens for life. Second, it makes location an exploitable part of the mix. Combined, these two things create the opportunity for personalised communication based on geography; for instance, when someone is close to or has just entered a store.

Of course, not every shopper will be prepared to give you access to such information. But many will (perhaps especially existing loyalists), so long as you get the value exchange right and demonstrably use the data to the customer’s advantage. IPSOS Mori and The Logic Group have found that 42% of us want to receive offers whilst in the act of shopping, not afterwards. If you can satisfy this need, you’ll unlock a rich stream of high quality data that can be put to immediate use.

Provide contextually relevant content

Being treated as an individual is inherently empowering; but the magic comes when personalisation is used to deliver an enhanced level of service.

Having secured permission to access a customer via their mobile number, we can begin to accumulate insight and intelligence around that number: their purchasing history, their loyalty status, the frequency of their social activity, and so on. By combining that data with other contextual factors – stock availability, current offers, new ranges, or even the weather – brands can deliver content of optimum value to individual shoppers. And mobile allows that communication to happen at exactly the right time and place.

Create entertaining experiences

‘Surprise and delight’ is a phrase that’s become cheapened by over-use. But it’s still one of the surest ways of engendering the sort of passionate loyalty to which all brands should aspire.

Another of Mobile’s great strengths is its ability to connect the physical and the digital. It’s therefore the ideal medium to amplify the sensory benefits of shopping, especially on the High Street. By allowing people to discover, participate in and share content, Mobile can help create entertaining experiences that will leave shoppers feeling privileged, empowered and significantly more predisposed towards loyalty.

The above isn’t simply crystal ball-gazing. Whilst we’re not aware of any brand that’s executing brilliantly across all three of these principles, a number (especially in the USA) are making significant headway. Manifesting the zeal of the true convert, BestBuy now encourages customers to scan codes to receive discounts, special warranties and deals on ‘open box’ inventory – all delivered at the local store level. Then there’s the Neiman Marcus Service app, which allows shoppers to build 1:1 relationships with their favourite sales associate via email, IM and face-to-face; a commitment to Empowerment which has recently been extended by offering members of their InCircle loyalty scheme the chance to choose the days on which they’d like to receive double points.

Attracting and retaining profitably loyalty customers is fundamental to any brand’s success, and Loyalty Schemes have a clear and significant role to play. But like every other marketing tool, they need to evolve; particularly when people’s expectations are changing so fast. By re-inventing their programmes around mobile-first principles, and by unlocking the channel’s unique ability to empower customers, there is significant opportunity for brands to maximise differentiation, cut-through and response.

This article first appeared on Adobe’s CMO.com on 25th February 2012
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MOBILE ADVERTISING

Why is it such a hot topic?

BY ALEX MEISL
2013/02/19
Last year, Alex was interviewed at the London 2012 European Leaders ‘Hot Topics Events’ about why mobile advertising is a hot topic.

As mentioned, the London 2012 website had over 430 million visitors and 4.7 billion page impressions, 60% of which were via a mobile which is a meaningful statistic for brands and mobile advertising.

However, there are some challenges still that need to be addressed in the mobile sphere;

- Defining what a mobile device is – how does tablet fit in?

- How brands, retailers and mobile marketers can find the right context for mobile and advertising?

- Will there be a convergence of platforms in the future?

- How does the future of NFC look after Apple’s release of the NFC-less iPhone5?

Feel free to watch the video or follow us on twitter for more mobile.
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WHY THE SECOND SCREEN

Is actually the first screen

BY JO RABIN
2013/01/31

“Second screen” is a concept that may originally have referred to the idea that the mobile phone provided an interaction channel for the TV or “First Screen” and hence be a response mechanism for advertisers, game shows and more.


With the rise of social media “Second Screen” comes also to cover the increasingly common, or prevalent use case that a family sitting on a couch doesn’t have its attention focused primarily on what is happening on the first screen and is doing unrelated things with the second screen, such as keeping up with friends, watching out for something that might be more interesting and all the things we typically use personal communication devices for. Also we have the idea of multi-screen where we are talking about any combination of TV, phone, tablet, laptop …


The picture of a family sitting on the couch all ostensibly enjoying Downton Abbey but actually engaging in unrelated activities of separately keeping up with friends, gossip and trivia can be seen as either a great and beneficial expansion of the liberation of friendship from the constraints of time and space or a picture of family dysfunction. Your choice. I guess it’s interesting to consider what the motivation for this might be. I can only hazard a guess. Part of it might be that most TV watching is not inspired by a genuine interest, and now serves a secondary purpose in filling in the gaps between other types of entertainment and interaction. The First Screen is in reality the Second Screen.


Another perspective is that according to Google’s characterisation, multi screening has two distinct modes, one of them is companion mode and the other is multi-tasking mode. Most of us use our mobile devices to multi-task, or “find time”. It’s less common to use a mobile device in companion mode or in an ancillary or complementary way to another device. That might reflect a lack of primary interest in the content, but might also reflect that it is really early days for “companion content”. Let’s not forget that it took many years for radio, TV and Web formats to emerge (it’s notable how crude early TV broadcasts look for example), so it seems logical to think that cross-channel or multi-screen companion formats will take a lot longer to emerge, especially since use of mobile as a single channel is still at a relatively early stage.


It will of course be a very interesting journey to see how advertisers and other “companion screeners” develop the formats that I have no doubt will look commonplace in the future.

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CATS

It's pretty much an accepted fact that cats now run the internet

BY MATT MAXWELL
2013/01/29

Whether cats actually invented the internet is still moot – Tim Berners-Lee is still being allowed that honour. But it’s pretty much an accepted fact now that they run it. Most of it, anyway.


Those cat memes that consume so much of your working day are simply Trojan Horses reserving global bandwidth for use by the cat-noscenti, their four-pawed machinations the better to perform.


Now this is a big, important issue with potential ramifications for the world of politics and business that simply cannot be underestimated. And while on the whole this is a fairly benign, fluffy dictatorship bringing pleasure and diversion to millions, history shows that what starts as liberation can turn to oppression faster than a fat cat jumping out of a bubble bath. So here at Sponge we’ve been looking at where some of the chinks might be in the feline network security systems. And we think we’ve found a few:


1. Catcha. Clearly a log-in point for cats needing access to the guts of the machine. What lies behind this fiendishly impenetrable security shield.


2. Despite how they behave, cats are social animals. They need company – if only to watch and judge. Instac.at fulfills this need, generating an unending stream of Instagram cats pics. Meeeooow!


3. If you can’t beat them join them, some might say. (Though anyone beating up pussy cats is no friend to Sponge.) Better to spend some time picking up the basics of the feline coding language, LOLCODE.


4. And showing that the establishment is ready to acknowledge the balance of power has shifted inexorably to furry side, Forbes magazine have honored the 12 most influential cats of 2012. Including Hank the Cat who ran for Senate in Virginia, USA on a pro-feline, jobs-creation ticket. He came third.

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TRADITIONAL MARKETERS

It's time to grasp the nettle

BY SIMON HARRIS
2012/12/21
After working in Promotional Marketing for over 12 years you realise that most FMCG brands are slow moving cautious beasts and with an increasingly tighter set of KPI’s, budgets and ROI culture the brave client seems to be few and far between. I remember working on the very first text and win promotion for Cadbury and that bravery paid off with a 7% response rate, almost unheard of.

Most FMCG marketers are traditionalists and with this mind-set are yet to grasp how best to extract value from the mobile channel. This investment model still holds true:

+ 70% of the content should be low risk, bread and butter marketing
+ 20% should innovate off what works
+ 10% should be high risk ideas that will be tomorrow’s 70% or 20%

To a FMCG marketer mobile is still in the 10% camp, yet there is still a big gap between time spent on mobile and investment in this channel.  Marketing Directors still believe their tenure is viewed on how successful and iconic their TV ads are and its impact on brand health, hence the traditional TV and awareness driving media budget still gets the lion share of investment. Mobile in their eyes is a little fish in a big pond.

For a FMCG brand mobile is still seen as a promotional delivery mechanism whether on-pack or as part of a kit based promotion in pubs, and to be frank this is where it has been most successful thus far. Some brands have ventured into apps, but over 95% of these are a failure. More broadly brands are being misled by technology and not insight, Kit Kat’s use of blippar is one example of this. The best promotions rely on simplicity and having to download an app before you can participate in a promotion always guarantees it won’t be as successful as the idea could have been.

What does remain true is the central principle all agencies work to and mobile is no different:

+ What are the objectives
+ Build an insight and strategy
+ Develop a campaign idea
+ What are the best channels of activating this idea

Mobile is ultimately another channel by which you can connect with your target audience and best express the campaign idea delivering brand advocacy and saliency.

It’s my hope in 2013 that FMCG brands realise that we’re no longer single screen but multi-screen, and mobile is the screen that is always on. Consideration as to role mobile plays in the marketing mix is of increasingly importance and at the moment for many it is a missed opportunity…be brave!
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LOYALTY 2.0

Why it's time to define Loyalty 2.0

BY PHIL GAULT
2012/12/18
If you’ve ever played Buzz-Word Bingo, the game in which you score points by predicting which phrases will crop up in a meeting, you’ll know that “Customer Loyalty” is an absolute banker.

This isn’t surprising given that Loyalty – or more accurately, Profitable Loyalty – is the lifeblood of any business. But what is surprising is how often Companies talk more about what they’re doing rather than focusing on the customer response.

My favourite definition of Loyalty comes from Dr Tony O’Reilly when he was running Heinz. If a shopper couldn’t find one of his products on the shelf, he expected them to drop their basket and go elsewhere. I like this not only for its ambition, but also because it nails two important truths. First: real Loyalty is something active and passionate (which is what distinguishes it from Habit). And second: the acid test of Loyalty is how people react in the moment.

As we accelerate towards a mobile-first world, both of these are going to become ever more important. In the process, as we’ve argued in our recent white paper, some significant cracks will appear in the standard Loyalty Marketing model.

It’s not that current programmes don’t work. They clearly do. But the more they proliferate, the more shoppers come to see them simply as an entitlement. At a time when Mobile is dramatically heightening people’s expectations, such schemes struggle to surprise or delight.

Not only do smartphones give us an unprecedented level of control over the shopping process, they also change our relationship with brands. Increasingly, we expect to be empowered in highly personalised and contextually relevant ways. To keep pace, Loyalty Programmes need to evolve in three particular areas:

+ Whilst spend will always be important, there are other scarce resources which should be rewarded; particularly, in a mobile-first world, a shopper’s location.
+ In addition to points, recognition, information and entertainment should become key parts of the reward structure
+ The emphasis should switch from passive collection to active participation, with communications using mobile best practice to drive immediacy of response.

This shift from Entitlement to Empowerment will be the defining characteristic of Loyalty 2.0. Inevitably, Mobile will be the key driver: partly because of enabling technologies like wifi, NFC and image recognition, but mostly because of the demands of the smartphone-enabled shopper.

This article first appeared in The Guardian’s Loyalty & Rewards supplement on 17th December 2012
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THE MOMADIC SHOPPER

Developing a new approach to understand this new culture

BY MATT MAXWELL
2012/12/11
Being a fish in a barrel probably feels quite secure but it makes you very easy to catch. For advertisers and marketers, having a captive audience with nowhere to hide was like having a machine gun at the Somme. Armies of consumers plodding through the mud towards your barrel. The cordite-scented crackle. Hundreds of rounds a minute spreading a deathly message as the reach and frequency mowed them down like fields of wheat.

Even better, most of the time, the target wasn’t even moving. People lived in houses with addresses.  They had telephones with numbers you could find in a big book. There were 3 channels – and only one showed ads. It was more like flying over Dresden and opening the bomb bay doors.  Happy days.

But it turned out we weren’t as passive as expected.  The adaptability of organisms to adapt to a threat is one of the key definitions of life and that’s exactly what the barrel-fish did.

Finding that the security of fixed addresses and contact details had opened the door to a contagion of marketing, we learned to move, to hide our identities in a jungle of dissemblance.  Now, with no landline to anchor me to the grid I’m less a fish in a barrel and more some kind of migrating animal. Less an urbanite, more of a nomad. Moving from landmark to waterhole, from spring pastures to summer meadows. Always moving, self-sufficient and reliant.  A tribal network of fellow travellers moves with me, but never all together, never all at the same time or speed.

So from being the  ‘target audiences’ of old, we’ve become mobile nomads. From being settled and passive we’ve become ‘Momadic’ and active. And we’re much, much harder to hit.

This is significant, because the move from a hunter-gatherer to a settled, agrarian lifestyle was one of the most important paradigm shifts in the history of our species.  It gave rise to city states and the concept of citizenship. It put the Civis in Civilisation. And the way we communicated followed – the one to many approach of publishing and broadcasting. The issuing of edicts to an attentive population. All the principles which traditional advertising still clings to.

But the Momadic citizen is slippery.  For one thing, you never know where they are – or what they’re doing while they’re there. They have so many identities through debit and credit cards and store cards and loyalty cards and email addresses. They change their names. They buy from your competitors while they’re IN YOUR SHOP! They check your website from different devices so you can’t even drop a cookie on them reliably. What’s worse, they listen to their tribal companions more than they listen to you and it doesn’t matter HOW LOUD YOU SHOUT, because they’re skipping over the ads or changing channels, popping up all over the shop like prairie dogs and screwing up all that demographic data it cost you so much to compile.

That’s why we are developing a new approach designed to understand this new culture. We call it MOMADiQ- understanding the habits and behaviours of the mobile nomadic shopper and learning how to move at the same speed as they do.

For brands and businesses this is requires a change of mentality and if Mitt Romney was right and corporations really are like people (or at least organisms of some kind) those that adapt will survive and those that don’t will not.
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THE WORD

From the conference 'circuit'

BY BILL MACLACHLAN
2012/12/10

Since joining Sponge this summer, I have regularly attended marketing and retail conferences, and seen a number of recurring themes across the presentations that I have been to. Interestingly, Sponge are already doing some good work in a lot of these areas. Here are some of the highlights from the conference ‘circuit’ this year;


1.)    Mobile is fast becoming accepted as the glue in multi-channel user engagement. As the device that is with users at all times, mobile is being seen as an essential means to reach shoppers on their journey to purchase. The key is not to see mobile as the last point on their journey, where the transaction happens and can be attributed to mobile as a ‘channel’, but as a stepping stone in their journey on the way to a store or e-commerce desktop site to complete their purchase.


2.)    Mobile and tablet sales are growing fast, and PC volumes are heading one way. Down. A business that is set up to only reach their users via a desktop website is a business of yesteryear. One panel even anticipated that PCs will soon only be used for the ‘heavy lifting’ of professional tasks in a work environment like developing, designing and work in excel – whilst mobiles and tablets will be used by the new generation for their everyday tasks. To quote Steve Jobs “PCs are going to become like trucks. Less people will need them” vs the more nimble mobile or tablet devices that are like the cars we have for general use every day.


3.)    A business that applies a PC first strategy is not in touch with their users. Website use via mobile is steadily increasing and looks set to climb further with the arrival of faster connection speeds via 4G. However, tablet web volumes are increasing around x4 faster, and look set to boom with the arrival of smaller, cheaper tablets from the main players. A business that transfers their PC website user journey to these devices is missing out on so many exciting user experiences. With the fall of the PC and ‘mouse and keyboard’ driven navigation, comes the rise of touch led, image driven navigation that is typical to tablet and mobile devices. And beyond that we already have the gesture led voice recognition navigation already in use in Smart TV from manufacturers like Samsung,  which makes the user experience even more personal.


4.)    In-store Mobile usage is increasing, but most retailers aren’t set up for this. Recently, there seems to a regular release of a new piece of research on ‘show rooming’  (where users research or engage with products in-store via their mobile devices), that makes tough reading for high street retailers. However, most retailers entrust mobile to the e-commerce teams that handle the desktop website, and keep in a silo away from the in-store teams. Breaking down those internal barriers can be key to engaging with customers in-store via mobile and helping to control the user experience, drive efficiencies around faster store browsing, personalised offers, and even ‘till-free’ cloud based payments via mobile using services like PayPal.

What is clear is that device based behaviour is changing which illustrates consumers are ‘voting with their feet’ and this is happening a lot faster than most businesses are equipped to keep pace with.

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