InternetRetailer.com - 160 Characters or Less

InternetRetailer.com - 160 Characters or Less

160 Characters or Less
When it comes to getting as close as possible to customers, tiny text messages hit the bull’s-eye
By Bill Siwicki
E-commerce without the Internet: That may have sounded like an absurdity to many retailers in 2007, but in 2008 it became a reality—one giant leap for m-commerce.

Amazon.com Inc. was the Neil Armstrong of text message retailing when last spring it introduced TextBuyIt. QVC Inc. followed in the fall with QVC Text Ordering. The key: Purchasing merchandise through text messaging does not require a mobile web site or even mobile Internet access because text messages flow through wireless voice connections.

So, for example, a consumer is relaxing on her couch watching a QVC program. The hosts are showcasing a product she decides is for her. She already has an account with default payment and shipping information and has registered her mobile number with the retailer. She texts ONAIR to QVC’s short code—an abbreviated phone number used in text messaging. Within seconds she receives a reply text message asking her to confirm her order, which she does with a second text message. QVC sends a final text message confirming her order and informing her of an estimated delivery date. That’s it.

The use of text messages by retailers is growing. Some retailers, such as Moosejaw Mountaineering, were sending marketing text messages as far back as 2004. Last year, though, there was a bumper crop of texting efforts.

Amazon.com and QVC offer text message purchasing. Some other retailers have experimented with advertising short codes on TV and in magazines to enable consumers to receive free samples of merchandise. Most retailers using texts today, though, do so to market products or offer promotions, as well as establish perhaps the closest connection possible with customers, since most consumers are almost never without their mobile phones.

And most consumers are now texting—it’s no longer the province of frenetic teens. 77% of the 259 million U.S. mobile phone users subscribe to or purchase text message capability, research firm Nielsen Mobile reports.

In fact, text messaging has become so pervasive that U.S. mobile subscribers now send and receive more text messages in a month than they do phone calls–an average of 357 per month in Q2 compared with 204 phone calls, Nielsen Mobile reports.

What’s more, many text messagers like to shop on the web. 20%, or 51.8 million, spend more than $1,000 online annually versus 17% of all mobile phone users, Scarborough Research reports.

Buying sans the web

The big news in texting last year came when Amazon.com introduced TextBuyIt.

Amazon.com customers who have accounts with default shipping and payment information via the e-commerce site can find a product they’re looking for and complete a purchase using TextBuyIt.

A customer sends a text message to the short code AMAZON (262966) with the name of a product, search term or UPC bar code number, or ISBN code for books, and within seconds Amazon.com replies with a list of products that match the search, along with prices.

To buy an item, a customer replies to the text message by entering only the single-digit number next to an item. The customer then receives a brief phone call from Amazon.com with the final details of the order, then confirms or cancels the purchase.

When a customer purchases something for the first time using TextBuyIt, Amazon will ask for an e-mail address and the shipping ZIP code on the Amazon.com account. With this information, Amazon.com uses the customer’s default settings for payment method, shipping address and shipping speed to complete the first purchase and future purchases from the same phone.

“You do not have to transact personal or financial information using the phone–that breaks down a common online barrier,” says Vidya Drego, senior analyst at Forrester Research Inc.

QVC decided to make purchasing items shown on its television shows simpler and faster by launching QVC Text Ordering, which relies on sending brief phrases to the retailer’s short code. The program enables shoppers to bypass getting off the couch and going to a computer or making a phone call and talking with an agent.

“Once registered with the service, our customers can purchase an item in just two text messages,” says Bob Myers, senior vice president of platforms and broadcast technology at QVC, which is using m-commerce technology from QWASI Inc.

To register for QVC Text Ordering, a customer texts JOIN and her QVC customer number or e-mail address on file to QVC’s short code, QVCGO (78246). The customer then receives a text message back from QVC asking her to verify the account, which includes her default shipping and payment information. After verification, QVC sends the customer a final text message, informing her she now is set to place orders.

To make a purchase, the customer texts a product number to QVCGO. QVC sends a text message back with the item number and price and a request to verify the purchase. After the customer verifies the purchase, the retailer sends her a final text message confirming the order and providing an estimated delivery date.

The customer also can text TSV to the short code to purchase “Today’s Special Value,” and ONAIR to buy what currently is on TV. Additionally, QVC is taking text message m-commerce beyond purchasing. A customer can add items to her e-commerce site-based wish list by texting WISH and an item number or WISH and TSV or ONAIR to the short code.

Amazon.com and QVC are far ahead of the pack in using text messages in m-commerce. Most of the action centers on using texts in marketing campaigns.

In October, apparel and accessories retailer Karmaloop.com launched its first mobile marketing campaign, an exclusive for customers who opted in as the retailer in April began collecting mobile phone numbers during checkout. Customers proved eager to receive mobile messages: more than 100,000 volunteered mobile phone numbers between April and November.

All text messages are limited to 160 characters, including spaces. The October Karmaloop.com message was simple: “Karmaloop.com. Get 20% OFF! Enter code: MLUCKY. 3-day exclusive! Off regular + sale items only!”

The retailer racked up $89,000 in sales. It paid its m-commerce technology provider CardinalCommerce Corp. $3,800 to manage the campaign. The campaign achieved a 4% conversion rate and a $220 average order value. What’s more, only 2% of customers opted out of receiving future text messages, a considerable success versus what mobile experts say typically is between 5% and 10%.

“I was a little nervous at first, thinking customers probably didn’t really know what they signed up for, but text messaging has definitely proven to add big numbers to both the top line and bottom line,” says chief operating officer Anand Shah. “The No. 1 factor that tipped the scale in favor of text messaging was our niche demographic: They are early adopters and influencers, not just in apparel but in other walks of life. They live and breathe mobile.”

Important reminders

While Karmaloop.com offers special promotions for its mobile customers, 1-800-Flowers.com Inc. uses text messages to market in a different fashion, though with the same goal: staying close to customers while increasing sales.

1-800-Flowers.com launched a reminder service that warns customers of impending gift-giving days. Customers can join the service by sending a text message to the retailer’s short code. “We’ll remind you in advance of such things as Mother’s Day and Father’s Day, and then direct you to our m-commerce site using the text message,” explains Vibhav Prasad, senior director of web merchandising.

Vans Inc. uses text messages in a similar way. Its marketing focus is not on offering promotions but on providing a service.

The shoemaker has a devoted following of fans who connect the crazily designed footwear with a variety of affinities, including skateboarding, surfing, snow sports, music and art, all of which it covers in-depth on its web site. It unveiled last year a service where fans can sign up online to receive via text message regular updates on topics and events in these and other areas—along with Vans shoe news.

“We’re notifying customers it’s time for a visit to Vans.com,” says Chris Overholser, a senior communications manager who works in lifestyle marketing at Vans.

Promos in the sky

Showing there are few limits to how text messages can be used in marketing, Meijer Inc. used a wildly different approach for a special promotion.

Near Halloween, Meijer beamed images of the Headless Horseman onto the sides of buildings and in the night sky in three major U.S. cities, telling people below to send a text message saying “He rides” to Meijer’s short code to receive a reply text message containing a special code for $10 off a $74 online purchase and enter to win a $1,000 gift certificate to the mass merchant.

Meijer says the campaign greatly increased brand awareness, and not just through the event itself but also through significant local and national media coverage it attracted.

Meijer worked with mobile marketing vendor SmartReply Inc. on the effort, as well as creative and other firms including BlueWater Technologies, DeVito/Verdi, Harvest Music+Sound Design, Integra, SpringThrough and Storytelling Pictures.

“When it comes to creating a campaign without a media spend you are taking a gamble that your content is compelling enough to spread and become consumed,” a Meijer spokesman says. “We succeeded by creating more traction than initially planned.”

In addition to receiving text messages with special codes that can be entered during checkout on an e-commerce site, coupons to be used in bricks-and-mortar stores as well as online are a popular text message marketing approach.

Last year mobile technology vendor Mobile Dialog Inc. added more retail clients to its roster. Its Text2Store.com site offers coupons via text messages from merchants, including the Internet Retailer Top 500’s CVS Corp., FragranceNet.com, Gaiam Inc., Ice.com Inc. and Walgreen Co. Consumers create an account at Text2Store.com. They redeem text message coupons using promotional codes. In addition to the promotional code, mobile coupons include the address and phone number of the nearest store, as well as a hyperlink to the retailer’s web site.

Texting family and friends

American Eagle Outfitters Inc. also is getting into the text message marketing scene. In November it began building on an already successful texting initiative by gathering mobile phone numbers through e-mail campaigns and in stores, informing customers they could receive special promotions through text messages.

In 30 days it gathered tens of thousands of numbers, which shows the great interest consumers have in texting, says Fred Grover, executive vice president of AEO Direct. The merchant planned to send its first text message marketing offer in mid-December.

But it’s a text effort American Eagle Outfitters launched in October 2007 that sets it apart in the field of mobile retailing. Send To Phone is a feature integrated into the retailer’s e-commerce site that enables shoppers to send via text message product information and a short note to others—for instance, asking a friend for her opinion or giving Grandma a birthday present hint.

The feature is essentially the same as E-mail A Friend. However, American Eagle Outfitters designed Send To Phone to do something e-mail can’t—help shoppers in stores remember exactly what to buy.

A text message comes with product name, description and number, so Grandma can just show the saved text message on her phone to a store associate and say, “Bring me this, please,” and be assured it’s precisely what her grandchild wanted. The same goes for shoppers who see something online and want to send themselves a text as a mobile reminder for their next visit to the mall.

For mobile phone users with web access, the text message also includes a hyperlink to a mobile web page, hosted on AE.com, with a product image and more information. American Eagle Outfitters uses mobile technology vendor Pelago Inc. to facilitate the text messaging.

A twist on text

Rather than taking a text message promotion or coupon approach first, the retailer wanted to put a different twist on text messaging, a spokeswoman says. “We’re a lifestyle brand and we want to be a part of customers’ lives all the time,” she explains. “Giving them a mobile platform where they can interact with the brand results in sales.”

American Eagle Outfitters pays Pelago a monthly fee, and pays “far less,” the company says, per text message than the 10-20 cents wireless carriers typically charge mobile phone users without text message packages. Mobile experts say an individual text message in a mass text program typically costs between 2.5 cents and 5 cents. The retailer says shoppers use Send To Phone on a daily basis. It adds that return on investment for this program is difficult to track because the goal of the program is to drive mobile consumers into stores.

“The majority of people online are gathering information, and we wanted to make it easy for them to do something with it, to create an environment of sharing where people can have fun with mobile technology,” Grover says.

Whether it’s consumers making purchases or sending product information or retailers sending promotions, coupons or other marketing material, text messages have an edge over online buying and e-mail marketing because they enable convenience and speed for customers, who virtually always have their mobile phones with them, says David W. Geipel, co-founder and chief operating officer at QWASI.

“We’re seeing 10% to 20% response rates on mobile marketing campaigns, which dwarfs the response rates of e-mail marketing. There’s no spam filters on text messages, and there’s no overwhelming in-boxes, where people may not open an e-mail for days, or perhaps just delete it,” Geipel says. “Overall, text messaging gives you the most direct and personal relationship you can have with a customer. Text messages cut through the clutter and immediately deliver specific messages to customers anytime, anywhere.”

bill@verticalwebmedia.com