By Sonali Shah

As the 2009 holiday season draws near, retailers are focusing on how to meet sales targets and drive traffic, in spite of the continuing recession.

The mobile channel can help do both – increase revenue and engage customers – and mobile messaging will play a key role in most mobile campaigns.

Last year, large retailers such as Sears and Walmart successfully used mobile to reach customers.

This year, we expect more retailers to join the mobile bandwagon.

Soup-to-nuts benefits
But what are the benefits of mobile messaging for retailers and how can they leverage that channel for success?

Mobile messaging can play an important role in each phase of the commerce lifecycle – from product discovery and purchase to customer care and satisfaction.

Consumers can discover items via an SMS short code, an SMS or MMS advertisement, or an SMS providing a link to a mobile Web page or application.

Walmart was particularly successful with SMS advertising last holiday season. Customers registered by entering their mobile phone number on the Walmart wired Web site and then received alerts of online and in-store bargains.

The cost of SMS campaigns for retailers and the positive impact of such campaigns on sales make them a cost-effective marketing tool.

The Yankee Group estimates that mobile coupons can deliver redemption rates of 10 percent versus 1.2 percent for paper-based coupons.

In fact, some of our clients have seen 40 percent redemption rates.

Near-real-time effect
Another benefit of SMS campaigns is that they can be sent out without much advance planning and may be customized.

For example, if a retailer with an existing SMS alerts program discovers on a Wednesday that it has too many striped red and green jeans in inventory, it can send out an alert on Thursday offering the jeans for a 25 percent discount.

As opposed to print or TV ads, SMS ads help manage inventory in near real-time.

Now, once consumers have found an item they would like to buy, they can click on an SMS message to call the retailer or to be connected to a mobile-optimized Web site.

Then, once the item has been bought, consumers can request SMS notifications of when the items have been shipped or delivered.

For items that are out of stock, such as the latest Wii game, an SMS message can be sent immediately when the product becomes available.

SMS can also be used to schedule delivery times.

Not only do all of these uses of SMS help to improve customer satisfaction and loyalty, but they also can help to lower internal customer care calls.

The average cost of a call to a customer care agent is $5 and to an IVR system is 40 cents. In comparison, SMS costs approximately 1 cent to 2 cents per message.

So as this year’s holiday season approaches, here are some recommendations for those retailers who would like to incorporate mobile messaging in their marketing campaigns and customer support initiatives.

Make it relevant
The mobile device is personal, so marketers need to ensure that the information delivered to the consumer’s mobile phone is equally personalized. This way, consumers will feel that there is an understandable reason to interact with a particular brand.

When consumers opt in to a messaging campaign, the retailer should do due diligence and ask them to select which products in particular they are interested in receiving information on and how often they would like that information.

A lot of consumers in the past have expressed frustration or even ended the relationship with a vendor because of either message overload or receipt of irrelevant information. It is better to send fewer messages, but make them relevant to the consumer’s needs.

Integrate mobile in marketing mix
Mobile messaging is just one part of the overall marketing mix, and it is most effective when it is not used alone.

The retailer should make sure to integrate mobile messaging with print, television, the Internet, mobile Web and other mobile applications.

Kraft Foods mastered this earlier in the year when it launched a new instant coffee product – Jacobs 3in1/2in1 – in Germany.

The foods company used print and TV ads to promote short codes and keywords. Consumers who responded to the short code received a WAP push link to the mobile sampling portal, where they were invited to enter their information to receive a sample product.

The campaign not only resulted in nearly 500,000 samples being placed directly within the target market. It also had the added benefit of reducing wasted samples – a problem often incurred when samples are given out too freely in stores.

At the same time, this campaign also allowed Kraft to gather data for customer relationship marketing purposes.

Make it easy
SMS has become the easiest form of mobile marketing because it is has been widely adopted by the majority of the U.S. population and is available on nearly all phones.

Today 76 percent of all mobile phone subscribers worldwide use SMS text messaging, and more than half of American mobile phone subscribers are active users of SMS.

There is also a much smaller percentage which regularly uses the mobile Web or mobile applications.

So, if a retailer wants consumers to click to a link delivered via SMS, the retailer should make sure that this link works and that the landing page is optimized for the consumer’s device. Actions should involve as few clicks as possible and should be secure.

If consumers find their experience easy and effective, they will be more likely to opt-in and favorably respond to mobile advertisements in the future.

Overall, SMS can be a powerful ally for marketers this holiday season.

As the cost of SMS continues to fall and more consumers become open to receiving value-added mobile interactions, brands should add SMS to the marketing mix.

However, every channel has specific rules for engagement and, as long as marketers follow the key best-practice tips, they will reap significant results. Happy SMS marketing this holiday season.

Sonali Shah is director of corporate development and strategy at VeriSign Messaging and Mobile Media, Mountain View, CA. Reach her at [email protected].