Shopping with a mobile device helps remind us why iPhones and Android-powered devices are termed smartphones. Loaded with digital receipting capabilities, location-based features and social media outlets, the smartphone is the perfect tool to help customers engage with retailers and restaurants at the point-of-sale. Such advances in technology make the life of the marketing executive easier while at the same time posing endless opportunities to differentiate from competitors. In such customer-centric lines of business, retail and dining are ripe for a marketing and loyalty makeover.
Mobile reinvents customer loyalty to businesses through its ability to make the buying experience easier. Retailers that implement a fluid mobile strategy in their stores have the potential to create loyalty that commits a consumer to their store instead of their competitor’s for lasting periods of time. Switching costs to the customer increase as they build loyalty credits at the technology-enabled retailer and become accustomed to the ease of mobile. Take the payments pioneer, Starbucks: the coffee company has created a competitive advantage in an easier payment process (via its proprietary app and Square Wallet) that has undoubtedly stolen customers from Caribou and other coffee shops – not to mention the ‘cool’ factor of paying with one’s phone.
The benefits go both ways; consumers are just as receptive to this kind of promotion as they rack up loyalty points and coupons that might otherwise had to have been retrieved via mail or newspaper. After making a purchase at Sports Authority, you might notice a section at the bottom of your digital receipt showing the incremental points earned on your purchase as well as your current point balance in the store’s loyalty program. Let’s face it: the coupons and points stored on your smartphone are significantly more likely to be exercised than the two-foot long paper receipt you get now.
As a frequent Starwood hotel guest, I find value in knowing how many points I earned immediately after a stay so that I can readily budget these SPG credits for upcoming trips. The same would hold true for points at retail outlets. Displaying a customer’s point balance on a digital receipt from Kroger serves as a reminder of their financial commitment to the store that should not go without some sort of reward down the road. What grocery shopper wants their loyalty spread across four different supermarkets? Transparency into loyalty points allows customers to identify the most rewarding outlets and stay commited to them.
Equally important to rewarding customers for their loyalty is acting on their feedback. Without an effective medium for collecting and responding to real-time feedback in today’s shopping’s world, post-purchase feedback is a huge area of opportunity for both the consumer and merchant. By simply providing customers with a ‘Tell us about your shopping experience’ text box attached to the digital receipt, stores can learn what they did right or wrong, rather than having to dig through thousands of social media posts. Depending on management’s level of commitment to customer service, some stores may go as far as staffing personnel to reply to unhappy customers directly through the mobile app.
Of course, before newer retailers pour efforts into incorporating customer feedback, they must first get them in the store. Location-based promotional offers help sales teams get in customers’ faces without saying a word to them. A notification popping up on a smartphone user’s screen letting them know of a 15% discount on cold cuts at a new sub shop might steer the individual away from the Jimmy John’s he was heading toward. Better yet, built-in social media channels installed on most smartphones serve as advertising vehicles to a consumer’s friends when that same individual checks in at the sub shop on Foursquare or Facebook.
The use of smartphones in retail and dining brings deals closer to the consumer and promotional wins closer to the merchant. Additionally, customers get a chance to express their opinions on the shopping experience and retailers have the opportunity to improve it. However, most consumers would like to avoid carrying a dozen different loyalty apps on their smartphone. The trick will be getting retailers to buy into a single mobile wallet, rather than deploying their own proprietary apps the way Starbucks and K-Mart have done. For now, something is better than nothing.