Best Buy names top six trends in mobile marketing, commerce
By Dan Butcher
March 3, 2010
Customer experience on Best Buy's mobile site is strong
SAN FRANCISCO - Executives from retail giant Best Buy and ecommerce software-as-a-service provider ATG discussed six major trends in mobile marketing and commerce during a panel at Mobile Boot Camp, cohosted by the National Retail Federation and Mobile Commerce Daily.
The six trends include increased smartphone sales and usage; dramatic increase in mobile Web usage; mobile commerce adoption grows; mobile search becomes essential; multichannel marketing mix expands; and market fragmentation continues.
“These are six key trends in mobile, and we’ll discuss how retailers and marketers can meet the opportunities and challenges ahead as technology continues to empower consumers,” said Tracy Benson, senior director of interactive marketing and emerging media at Best Buy, Minneapolis, MN. “We’re one of the largest sellers of smartphones, so we have the benefit of seeing who’s buying the phone, which helps us understand how they’re using it and the adoption rates.
“Smartphones over the last 17 or 18 months have just exploded—in fact, eight times faster than the development of the Web on the PC—and it’s only going to increase and continue to grow,” she said. “If one out of five consumers are using smartphones, and that will be one out of every two in the next few years, that is comparable to the number of mobile devices we’re selling.
“Smartphones have really accelerated so fast because we’re seeing the connectivity to the Internet, which makes it a smart device, access to news, email, productivity, chat—communication and entertainment.”
ATG's Kelly O'Neill and Best Buy's Tracy Benson
Ms. Benson, who shared a panel with ATG director of product marketing Kelly O'Neill and Mobile Commerce Daily editor Mickey Alam Khan, estimated that there are 500 million mobile subscribers, and approximately 54 million in U.S. who are using the mobile Internet.
“Develop your mobile platform for the heaviest users and learn more from them based on the way they use and adopt the device,” Ms. Benson said. “Our customers overindex in almost all categories of technographic usage, so how do you prioritize?
“We decided to take down smartphones first—we launched an iPhone app first based on its user interface, and we just released an Android app a couple of weeks ago,” she said. “The usage of BlackBerry apps is relatively low even though the penetration of RIM devices is higher.”
Best Buy reveals strategy
In addition to its smartphone applications, Best Buy has a mobile commerce Web site.
In addition to driving sales, the retailers mobile platforms were designed to meet existing customers’ needs and assist with customer relationship management.
Customer acquisition via mobile marketing is also a priority going forward, but Best Buy felt that its first priority had to be launching a mobile Web site and native applications based on its core tech-savvy demographic.
“We’ve upped our analytics and tracking and tied it into our other channels, and we’re attracting a percentage of new customers, but the majority are existing customers with multichannel usage who are interacting with the brand in a new way,” Ms. Benson said. “To catch new customers, there are ways to dial up mobile media and advertising, but that aspect is in beta period.
“We want to solve our customers’ problems through mobile platforms that connect physical and digital properties,” she said. “We want to solve existing customers’ needs first before attracting new customers.”
Through its “Text or Dial” initiative, Best Buy is providing mobile access to product details and customer product ratings.
Best Buy distributes a call-to-action offering product information on demand in weekly print ads, in-store signage and free-standing inserts.
The call-to-action reads: “Simply text the 7-digit SKU number to 332211 to get product information sent directly to your phone or dial 1-877-591-2756.”
“By combining a simple call-to-action, an intuitive user experience and a wealth of product information, this service is accessible to and useful for everyone from the most advanced to the most basic of mobile users,” Ms. Benson said.
Twelpforce is a customer-service initiative where Best Buy employees out in the field use Twitter to instantly communicate and answer customers’ questions about any product.
Down the line, Best Buy plans to have mobile bar codes on all products in store, which consumers can scan to get product information such as reviews and ratings.
“QR code is a simpler solution—with text you have to punch in the number and wait for a response,” Ms. Benson said. “A QR code makes it faster—you scan it with your camera phone and it delivers the code right to you.
“While it is not mainstream today, we believe that consumers will find it useful and adoption will get there,” she said.
Mobile interaction leads to mobile commerce
Best Buy’s strategy is based on its belief that mobile affects every customer interaction, from learning, asking, sharing and browsing to actually buying.
Best Buy’s mobile strategy is to add value for consumers, become part of the portable network, win locally and bridge online and offline worlds.
The retailer sees mobile as the new portable store, and its three mobile platforms—mobile Web site, iPhone application and Android application—are all commerce-enabled.
Best Buy claims that its mobile traffic is increasing and actual conversion via mobile devices is strengthening.
While 3 percent of Best Buy’s online traffic is coming from mobile, the conversion rate is 25 percent higher on mobile than on its wired Web site.
Many customers are using its mobile platforms for research, around 30 percent, with 18 percent checking inventory using their handset.
Twenty-eight percent of consumers visiting the mobile platform are using it to make a purchase, and in-store pickup is a key value proposition.
“We are seeing consumers convert on the mobile Web site, and you’d think the items they’re converting on would be grab-and-go items such as entertainment products, which they are, but they’re also buying computers using their handsets, which is funny and ironic,” Ms. Benson said.
“Our strategy is to tie commerce to everything we do—commerce should be the hybrid engine that allows for the conversion,” she said.
Sixty percent are accessing Best Buy’s mobile platforms from home, 14 percent while in store.
“We also see customers accessing us via the mobile Web when they’re at home and they have a PC right there, which tells you something,” Ms. Benson said. “It’s easy convenient just pull it out of your pocket and you get the information you want immediately.
“Where are all the places I need to make my brand accessible?” she said. “Today the mobile device is the key opportunity, because it’s a ubiquitous platform bringing the functionality and content of the Internet together.
“It’s the one consistent communication vehicle that’s highly personal, highly relevant and always on 24/7, so our mindset is this is the thing that can keep us connected to our customer, although we have to be thoughtful and respectful about what we do with it so we don’t turn them off.”
Where to start
So where should a brand start?
The No. 1 priority should be to optimize the mobile browser experience—for retailers, mobile commerce enabled by a mobile Web site.
The leading ecommerce platforms support mobile browsers, and have focused on providing robust personalization and search.
Secondly, optimize the device experience when warranted. Brands should build specific applications for the smartphones their customers use, leveraging the unique attributes of each device to optimize the experience and the investment.
Brands should leverage their ecommerce platform to integrate the experiences and streamline the management of their various digital properties.
“It’s not just about development of mobile sites and apps, it’s about the ongoing management you have to provide,” ATG's Ms. O’Neill said. “You have to continue to deliver the experience your customer expects—there’s no difference on the small screen, the customer expects the same type of shopping experience they’re used to on the wired Web.
“If you do it properly, you’ll start to see you’re moving purchases along,” she said. “These days purchases are more considered—people are doing more research and connecting via various channels.
“Looking at the value of a cross-channel shopper, data is saying they are four times more valuable, with higher household incomes—they spend more money, and the more channels you can engage your customers in, the more valuable that customer will be for your bottom line.”
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