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Location-based SMS offers trigger 37pc of consumers to buy

By
April 5, 2013

A SMS pilot program in the Easton Town Center in Columbus, OH, points to location and SMS as being catalysts to driving in-store traffic.

Alliance Data Retail Services ran the test campaign between Black Friday and New Year’s Eve at the shopping center. The pilot asked consumers who had a loyalty card at six local retailers – including Express, The Limited and Pier 1 – to opt-in to a location-based SMS messages.

“The results validate the advice that we are giving to our clients – our strategy is that consumers want to receive these personalized, timely and relevant offers from brands via their mobile devices,” said Jim Walz, director of digital solutions at Alliance Data Retail Services, Columbus, OH.

How it worked
Alliance Data Retail Services sent out 20,500 email invitations to consumers who had a store-branded credit card to one of six retailers in the Easton Town Center. The email had a 53 percent open rate.

The email encouraged consumers to opt-in to the location-based SMS program for a chance at winning a $5,000 shopping spree. In total, 519 consumers participated in the campaign.

Alliance Data Retail Services then geo-fenced the area around the Easton Town Center so that when a participant was nearby the mall, they would be pinged with an SMS message that encouraged them to use their branded loyalty card at the retailer for a chance at winning the shopping spree.


A mock-up of the SMS messages sent to shoppers

Roughly 750 location-triggered SMS messages were sent from Black Friday to New Year’s Eve at the shopping center.

In addition to the 37 percent of opted-in consumers who made a purchase as a result of receiving a location-triggered SMS messgae, 95 transactions were made after the geofenced messages were sent.

The opted-in mobile consumers also spent more than the average shopper, according to Alliance Data Retail Services.

For example, the results looked specifically at the sales from soft goods retailers – such as apparel – and the differences in shopping behavior from cardmembers in the pilot and the average retail cardmember.

Opted-in cardmembers in the pilot averaged a 24 percent higher sales per transaction than the amount that an average cardmember spends.

The shoppers in the pilot program also spent 4.9 percent more on Black Friday with their loyalty cards than Alliance Data Retail Services had expected.

From Nov. 23 – Dec. 31, mobile shoppers in the pilot program spent more than 2.5 percent more than the company forecasted.

“Most text campaigns are being used for coupons, but we believe if done right, you can collect relevant information to build a database for down the road,” Mr. Walz said.

Follow-up message
Alliance Data Retail Services then surveyed some of the consumers in the pilot after the campaign ended on how mobile impacted their shopping experience.

Thirty-nine percent of the survey’s participants said that the SMS messages influenced their purchase decision, and 37 percent said that it influenced them to visit a brand.

The post-campaign survey also found that consumers were likely to opt-in to similar SMS-based programs. In fact, 68 percent of shoppers in the pilot indicated that they were likely to sign up for future location-based SMS programs.

When it comes to privacy and mobile, 60 percent were not concerned with security or privacy.

Additionally, 84 percent were comfortable with using their phone to communicate with retailers.

“We all recognize that text message campaigns are powerful – what made this resonate is that we combined this with location, the timing of that location and the knowledge involved in sending a personalized message,” Mr. Walz said.

“I think what makes mobile unique is that you can address the person on a one-to-one level,” he said.

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York

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