Transformers - Colloquy

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14 C O L L O Q U Y / Volume 18, Issue 1, 2010 Transformation Checks In Hilton Worldwide has introduced a range of banner-specific smartphone apps, which enable users to check in and out remotely, set preferences, check HHonors points totals, and so on. serve as a way to redeem points based on an existing account balance. As an instant program update channel: Loyalty programs can efficiently connect members to updated program information, program news, and “close to” reward announcements. As a high-impact communications vehicle: Opportunities exist for consumers to create communi - cations preferences; receive location-specific services; and obtain on-demand access to loyalty program information on-the-go. As a delivery channel for rewards and recognition benefits: Some marketers have already begun delivering actual rewards benefits via mobile, whether through apps, 2D barcodes, coupons or member-only games, events or content. Waiting for the critics’ reviews As encouraging as smartphone development has been, however, there’s still a long way to go in terms of consumers taking full advantage of the available technology. Experts agree that despite encouraging growth, North America remains in the early days of smartphone adoption and consumer interest. After all, according to recent Forrester research from the fourth quarter of 2009, about 17% of cell phone subscribers own smartphones, though predictions exist for that number to rise to 25% next year. For the time being, the remaining users are sticking to simpler, typically very inexpensive, traditional cell phones—known in the mobile industry as “feature” phones. “Most U.S. consumers are still not yet interested in taking advantage of phone technology,” says Van Baker, Research Vice President at Gartner Research. “For the average person, it’s not something that’s part of their daily life.” The opposite is true, however, in other parts of the world: For example, Asia offers faster speeds on their mobile devices and more advancements. “It’s probably because they don’t have some of the carrier and handset issues we have here, plus they have more uniformity,” says Maria Mandel. “There are more opportunities in their overall structure to access the internet and video content, and it's more affordable there to get a mobile device than a landline or a computer.” Europe, too, has a culture more centered around leveraging the mobile phone. “They’re used to paying for things using the phone, for instance,” says Baker. “It's also a cultural issue—in Europe, people tend to walk a lot more in city centers, so it’s not practical to be running around with a laptop.” In the U.S., one challenge is overcoming smartphone data usage limitations faced by carriers offering popular unlimited data plans: For example, AT&T famously stopped selling iPhones in New York City for several days over the 2009 holiday season—it claimed its unlimited data plans had led to just 3% of smartphone users consuming 40% of its data traffic and compromising its networks. In addition, while mobile web browsing is booming and consumers are becoming more comfortable with completing shopping transactions on their mobile devices—one recent survey showed that 37% of smartphone owners purchased merchandise using their devices in 2009—poor site functionality, such as extended page-loading time, can be a turnoff, particularly as expectations for ease of mobile browsing rise. Recent Forrester data shows that customer willingness to wait for a page load before abandoning a site cuts off at two seconds or less (down from four seconds just a few years ago)—and page load speeds for mobile retail sites range from 2.18 seconds to six seconds at worst. For now, with most Americans still holding onto their traditional “feature” phones, marketing through “push” messaging—using SMS and MMS texts—is still where marketers will see their most mass-market success, Mandel says. “From a North American perspective, the
primary marketing opportunity is within messaging,” she says. “That’s where you’re going to reach your broadest audience. Messaging is a great way to give a time-sensitive or location-based alert.” But looking ahead, particularly with the favorable youthful, high-income demographics of smartphone users, most marketers are getting into the smartphone game in some way, typically by developing a branded app or creating mobile websites with various functions relating to commerce, entertainment or financial services. The idea is to increase customer loyalty by giving customers what they want, when they want it and how they want it—and mobile offers an enticing way to do just that. “It’s been phenomenal to watch the growth and change in terms of consumer expectations about what they can do on their mobile phone and the ability to do things immediately when they are top of mind,” says Arah Erickson, Vice President and Head of Wells Fargo Retail Mobile Banking, which boasts a popular mobile website as well as an iPhone app. The mobile site is designed specifically to make it easy and quick to get things done on your mobile device with fewer clicks, while its iPhone app also offers users the ability to find an ATM or branch based on your mobile device's current location. “Smartphones offer a really exciting opportunity for us—there’s no question that their use will just continue to grow. Also, we’ve recently expanded our text banking service to all of our customers, even those who have yet to enroll in online banking.” For executives at Hilton Hotels, the fast-growing popularity of its mobile site led the company to jump into the app universe, launching seven brand-specific versions that boosted their loyalty offerings, says Chuck Sullivan, Senior Vice President of Global Online Services at Hilton Hotels. The apps enable guests to check in and check out, order room service, take advantage of concierge offerings, and check their HHonors loyalty point level. “The feedback has been so positive,” Sullivan says. “These are things that are truly valued by guests.” As the smartphone market matures, countless vendors, agencies, applications, platforms and technologies fight for leadership and influence—not to mention a halfdozen operating systems as well as a slew of telecom providers and handset manufacturers. The landscape is confusing and complex, but loyalty marketers should certainly sit up and pay close attention to the following five here-to-stay trends that may influence decisionmaking: 1. Apps are still where it’s at. With more than 100,000 apps available in the iPhone App Store and thousands more offered on Google’s Android platform and on RIM’s BlackBerry, it’s clear that apps are still front and center when it comes to tantalizing smartphone owners. After all, they’re inexpensive—still typically in the 99-cent realm—and offer both useful and fun functions (ukulele app, anyone?). What’s not to love? For loyalty marketers, apps clearly offer a simple, straightforward way to connect with consumers using a specific, relatively measurable goal. However, app creation and deployment have also become highly competitive, requiring development, maintenance, updates and approvals—and the iPhone App Store is littered with apps that have failed to find a loyal audience. So brands should think carefully about entering the app fray, says Nielsen's Rocha. “It all depends on what demographic you appeal to and what your brand statement is.” At Wells Fargo, making sure an iPhone app offered something useful and convenient—in its case, finding a local branch or ATM—was key for its busy customers. “The location sensitivity of our app—if you’re looking for a branch—is one of the things that's unique about mobile in terms of creating additional convenience and immediacy,” says Arah Erickson. The idea is to increase customer loyalty by giving customers what they want, when they want it and how they want it—and mobile offers an enticing way to do just that. Experts predict that the apps of today will eventually transform into highly-personalized, location-based versions in which the consumer, on an opt-in basis, provides more information so the application can be more relevant – obviously a key factor in getting loyalty marketers to invest. “The application could know what kind of merchandise you want to buy, which restaurants you like to dine at, or which friends you like to have lunch with, and provide you with relevant information,” says Gartner's Baker. “Then, as the apps get more intelligent, they’ll get more proactive and make the consumer aware of all the resources available in the local area they’re in.” 2. Mobile commerce will awaken. Today’s customer wants to shop when, where and how he/she wants—and making that happen is a key ingredient in increasing customer loyalty in the retail space. So it’s no surprise that more than 100 of today’s top retailers currently have mobile commerce websites, including Toys ’R’ Us, Sears, American Eagle, Victoria's Secret and Best Buy. For now, however, experts say today's consumers are using their mobile devices mostly as a shopping tool rather than a buying tool—researching prices, comparing models and reading reviews. www.colloquy.com 15
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