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Posts Tagged ‘Wilson Kerr’

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The Other Day I Scanned A Banana (The Good

Yes, that’s right, a single, offline, real banana. Latin name Musa Acuminata. More specifically, I used my smartphone to scan a sticker on the banana. The banana itself had no power supply, or web connection.

I happened to buy this particular banana at a Wal-Mart in Florida (while on a fishing trip) and noticed that the ubiquitous banana “fruit company” sticker contained a mobile quick response (QR code).

I opened the scanner on my iPhone and scanned the code. In doing so, I opened a portal to the internet, a live action window into an online mobile-optimized experience that taught me something new. That engaged me. Cool.

The Del Monte QR Code

Seldom had I considered what company grew and shipped and sold the bananas to the grocery store I bought them from. Did you know that the Del Monte Fresh Produce Company was founded in 1886? (This is the year Apache warrior Geronimo surrendered and the Statue Of Liberty was dedicated). Did you know that Del Monte has 42,095 “likes” on Facebook and that they also sell a fruit called a Pluot? Did you know they own the domain http://www.Fruits.com?

Well, now you do, because I learned this on the Del Monte mobile-formatted  Facebook page that opened when I scanned the QR code.

Where I Landed When I Scanned The Del Monte QR Code

It took me about 5 seconds to scan and engage with the company whose product I was about to eat. It was not hard, it was easy. I would do it again.

The Other Day I Scanned A Banana (The Bad)

Yesterday I got my chance. This time I bought a banana at Wilson Farms in Lexington, MA. It too had a QR code on it’s sticker. When I scanned it with the same iPhone app, my mobile browser opened a standard large-format website for Chiquita Bananas, crammed on my little iPhone screen. Lame.

The QR code sticker said “Scan To Win!”, but I could see no easy way to sign up for anything and I could barely read the website on my small iPhone screen. I pinched a zoomed-in a few times and then shut off the phone.

The Chiquita “Scan To Win” QR Code

A Poor Experience On my iPhone

Unlike the Del Monte banana, the Chiquita QR code scan offered up a poor mobile experience and I was left with the distinct feeling that Chiquita needed a lesson in mobile marketing. Perhaps they will read this and call me.

Action-Enabling Ads…and Products

Some naysayers in the mobile marketing business scoff at QR codes as a gimmick or a passing fad. They talk about how hard it is to open the scanner app and actually complete a scan that opens a mobile browser window. I disagree. In lieu of another option that is this easy and simple, I find them a powerful mobile engagement tool.

In 2011, almost 60% of Twitter and Facebook users said they scanned a QR code. This is a LOT of people. In my opinion, any marketer or brand manager who sees this as merely a passing fad needs to open their eyes. QR codes allow a  low-cost “window to the mobile web” to be attached to anything. Nearly 10% of ads in magazines today feature QR codes that “action enable” a static, lifeless print ad and allow a tracked consumer interaction to occur.

Ninety percent of all QR code scans are done to obtain more information about the products and services advertised. If done right (like the Del Monte banana example) this can result in metrics that can justify an ad spend as ROI. This could be in the form of contest sign-ups, new Facebook “likes”, or even transactions. If done hastily and without thought to the mobile experience being provided (like the Chiquita banana), the result can be a poor customer experience and a squandered chance to engage mobile consumers.

Cha-Ching

Again, done the right way, QR codes are an easy, low cost way to add a mobile “window to the web” to any static ad or physical product, to drive consumer engagement. For print ads, custom mobile landing pages can be generated, to maintain the look and feel of the ad campaign.

If linked to an integrated mobile commerce site that supports deep linking (shameless plug for Unbound Commerce), a QR code can be a call to action that allows a consumer to convert a purchase right then and there. If a little “cha-ching” did not go off in the head of online retailers, it should have.

Low Barrier To Entry

The barrier to entry is so low, that there is little reason marketing depts should NOT be experimenting with QR codes. Smart eCommerce Directors that are launching mobile commerce sites should be telling them to, since they can use QR codes to drive tracked incremental commerce though their mobile commerce site!

The addition of a QR code can transform a static, non-linked print ad, in-store sign, or even a real product (like a banana) into a powerful engine for tracked mobile or social engagement and  commerce. I see QR codes as a viable and exciting new way to infuse tracked links into marketing, so literally anything can come with an integrated mobile call to action.

I had no idea two bananas would show me this, but they did.

Lessons

Certainly, scanning a sticker on a banana is not going to redefine mobile commerce or set the mobile/social marketing world on-fire. It is, however, a lesson regarding how easy it is to engage increasingly-mobile consumers by adding a link, a mobile call to action, that, when applied to other more commercial mobile commerce scenarios has the ability to generate real sales lift, as ROI.

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Wilson Kerr is VP of Business Development and Sales at Unbound Commerce. And yes, he is bananas about mobile commerce and mobile marketing and linking the two together. Contact him today at Wilson@UnboundCommerce.com or via Twitter @WLLK.

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Over the last 4 or 5 years there has been vigorous debate regarding when, exactly, the true potential of mobile will be realized. Mobile mapping, mobile TV, check-ins, mobile payments, push ads, games, QR Codes, NFC, Daily Deals, SMS, virtual mobile currency, pop-up ads, barcode scanning, coupons, and a litany of others have had their moment in the sun, but none have generated commerce upside at a truly transformational level.

Turning Point 2011

Finally, as 2011 came to a close, we saw real, tracked and reported numbers that were far too numerically impressive to be dismissed as a fad or trend. These numbers were tied to Mobile Commerce.

When I say mobile commerce, I do not mean mobile payments, which I define as paying for items at checkout, using your mobile phone. I an referring to online sales converted on mobile websites specifically designed and formatted for this purpose. Example: m.finishline.com

Retailers & Brands Lag Behind, Fueling The Opportunity

For years, online retailers and brands waited, while their customers flocked to web-connected smartphones and, as a result, small screens are now crammed with large format websites never designed for this purpose.

In late 2011 retailers and brands finally started waking up and launching mobile optimized sites, and this fueled explosive growth and big profits for those still out ahead of the curve.

Mobile consumers can finally land on mobile-optimized commerce-enabled websites and the traffic to these sites can be converted into transactions in a trusted, secure environment. These mobile conversion metrics are the key and the resulting revenue numbers are real, undeniable, and impactful.

Changing Expectations

As more brands and retailers launch mobile commerce sites, consumer expectations have changed rapidly. In fact, most consumers surveyed now expect mobile sites to not only function, but to work better than  standard e-commerce sites.

Retailers and big brands are finally realizing that mobile commerce is not some fringe distraction to their e-commerce team, but, rather, a way to add 10-20% to their bottom line in incremental revenue. That’s right, retailers and brands are not stealing from Peter to pay Paul, and most see no drop in “traditional” online sales. It’s all upside.

For athletic shoe retail giant Finish Line, their mobile site now makes up 14% of their total online traffic. For adult online retail leader Adam & Eve, mobile commerce accounted for a whopping 8% of their total revenue, only 2 weeks after it was launched.

Still not convinced that mobile commerce has ushered in a revenue-fueled turning point that should/will change the entire tenor of the mobile space? Here are the numbers.

2011 Mobile Commerce Stats

-PayPal saw a 397% increase in consumers shopping via PayPal Mobile on Cyber Monday 2011, vs 2010.

-Rue La La saw an almost 200% increase in mobile sales on Cyber Monday 2011 vs 2010.

-Ebay’s mobile commerce doubled to $5Billion+ in 2011

-Ebay’s Black Friday mobile commerce sales were up 516%, over 2010.

-2011 mobile commerce sales were up 91.4% over 2010.
– In 2012, mobile commerce is expected to increase another 73.1% to $11.6 billion.
-The average mobile commerce purchase was $123 (vs. $87 for purchases from desktop PCs).
-Shopping by mobile users doubled from 1.87% to 3.87% of all online purchases in the past 9 months!

-During the 2011 Holiday season, 44% of all Google searches for last minute gifts and store locator terms were from mobile devices

-Of consumers surveyed, 70% use their smartphones in stores and 77% have contacted a business via mobile.

64% of smartphone owners age 18-24 used a smartphone to find a deal this Holiday season.

-There were 20Million mobile bar code scans in Q3 2011, a 40% increase from Q3 2010.

-According to IBM, mobile traffic made up 18.3% of all online traffic on Christmas day 2011.

Conclusions

Mobile commerce transactions can occur anytime, anywhere and are being initiated on smartphones carried religiously by almost 50% of Americans. Online sales are no longer occurring only in front of a desktop or laptop, but anywhere and anytime. Retailers and brands should take notice.

Even more importantly, mobile commerce sales can be triggered by real world interactions with marketing initiatives most retailers and brands are already paying for! Printed mailings or catalogs, in-store point of purchase displays, peer to peer recommendations, signage, social media campaigns, emails, etc can all serve as mobile trigger points, when they are accessed by mobile consumers. The (largely untracked) digital media marketing spend already occurring can be tapped to drive mobile commerce, with tracked results. This means that smart brands (or their agencies) can (and should) be able to adjust these campaigns on the fly, to maximize ROI, in the form of tracked incremental mobile commerce revenue.

The biggest takeaway here is directed toward online retailers or brands who still do not have an integrated mobile commerce solution. Read and digest the numbers above and ask yourself this simple question, “How easy it is for a mobile consumer to visit my website and convert a sale?” (Hint: Try it!).

If you do not have a mobile site, the answer will be painfully obvious. Make fixing this your 2012 New Year’s resolution!

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Wilson Kerr (@WLLK) is a mobile LBS marketing expert, and VP of Sales and Business Development for  Unbound CommerceContact Wilson today to learn more. Mobile: 303-249-2083.

Some of the stats in this post were compiled from various sources by Gabrielle Kalika of Mobile Marketer. I have added added more my own, also compiled from various sources. All stats can be verified, via Google search.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of mobile.  Contact him today to learn more.

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Over one hundred billion dollars is spent annually on “traditional” online advertising, and each of the last three years have been prematurely declared the year of mobile advertising. For too long, the promise of mobile advertising has been based on technical, location-awareness-related advances the industry has heralded as beneficial, while these same advances scared consumers away.

This is finally changing and consumers are discovering simple, easy iterations of mobile technology that provide simple, easy solutions for problems they want solved. Saving money via special offers/coupons at known, nearby business locations is the best example and Groupon and their kind have driven socially-promoted savings on purchases that can be measured in increments of $Billions.

group-buying-sites

The Bridge To Mobile Commerce: Deals and Group Buying

Groupon is the fastest growing technology company in history and Founder/CEO Andrew Mason links their success to providing a “hybrid of local advertising and local commerce”.

Groupon’s unprecedented success should serve as a  lesson to the various elements involved that melding established consumer behavior and technology in a simple, easy way that also leverages consumer acceptance of social media  is a key factor for success.

The real power of this model lies in the fact that incremental, tracked purchases are made at the beginning of the consumer interaction, generating pay-for-perfomance, frontside ROI metrics that blow other “wait and see” methods of marketing out of the water. When you add in a “social media award” component (share the deal and get the deal for free), this model becomes even more powerful, as the campaigns quickly become viral and market themselves.

While Groupon, Living Social and the rest have been written about extensively, I am not sure the full potential impact of this model is understood. These companies solve an existing problem for local businesses by converting the traditional coupons, sales, and special offers they have used for decades into tracked offers that can measure in both financial upside and foot traffic. They also tap exisiting marketing budgets by stealing pre-allocated dollars away from traditional media via no-risk performance-based value propositions (that work).

This is in contrast to much-touted hyperlocal mobile push advertising campaigns that require a problem to be explained, before a retail business or brand will considering paying to try to solve it (assuming they agree the opportunity for ROI is there). More importantly, most retail businesses still do not have a way for mobile banner click-throughs to land a consumer in a place where a purchase can be converted. This is where mobile commerce comes in.

ebayMoving The Merch: “Redemption Is Mobile Commerce”

The quote above is from Dan Gilmartin of Where.com and I agree. While redemption of printed or digitally displayed group buying vouchers brought into a restaurant, hail salon, or spa (for example) works well-enough, retailers that sell lower-margin goods want converted sales that “move the merch”, as they say. Giving 50% of your margin away to Groupon and their kind, is a fine solution for high-margin, service-oriented businesses, but retailers need to link campaigns for specials to actual sales.

Converted sales transactions, rather than impressions rendered or click-throughs to a standard website, are what attracts small to medium-sized retailers that gain little from traditional brand marketing. Since non-standardized point of sale systems for redemption are still the Achilles Heel of the mobile coupon model, tracked, mobile commerce conversions will emerge as the new, essential “redemption metric” in 2011.

With $1.5 billion in mobile sales logged in 2010 (a 3X increase over 2009), Ebay’s mobile commerce success shows that consumers are willing to transact on a mobile device. In just the 30 days before Christmas 2010, eBay transactions were valued at over $100 million  in gross merchandise value, a 135% increase over last year (Mobile Commerce Daily).

“Today’s consumers are transforming the shopping experience with their mobile phones, and retailers who have not broken down their siloed channels will not be able to keep up,” says Jim Bengier, global retail industry executive for Sterling Commerce.

Coda-research

2011: The Year Of Mobile Commerce

In the rush to check off the branded app and social media platform “must-have yes boxes” , mobile commerce sites were passed over by retail brands, and consumers have been left to “pinch and zoom” and fumble with large format websites not optimized mobile devices.

How big is the mobile commerce opportunity? In July of 2010, a scant 12% of online retailers had a mobile commerce site and an even smaller 2% had an app with checkout capability (Acquity Group). Even with these dismal brand/retailer adoption numbers, US mobile-commerce (sans travel bookings) grew from $400 million in 2008 to $3.4 billion in 2010, and growth is predicted to be “explosive” in 2011 (Mobile Commerce Daily). Show me the money, indeed.

In 2011, linking a smooth-running mobile commerce engine to special offer and redemption platforms/efforts will emerge as essential, as this is the simplest way to track success in a way most retailers understand. Retailers who sell online should build robust mobile commerce sites linked to their etail “technology stack” in order to capture converted sales, driven by mobile (or social) marketing. Simply “scraping” an etail website and shrinking it to fit for mobile ignores key differences in mobile vs at-home consumer purchasing-related behavior.

Social Commerce: Sharing The Wealth

Of the 620 million consumers using Facebook, the most active 200 million access the social network through their mobile device.

Why do large retailers and brands spend money building up millions of Facebook Page fans and then drive them away from Facebook to convert a sale? It’s even worse if they send a mobile consumer to a standard website.

Increasingly in 2011,  retail brands will use Facebook to promote special deals for fans, and give them the option to buy what they are promoting by linking to a mobile commerce page where that product is cued up. Facebook might-well offer these tools for businesses as a part of Facebook Deals, as they look to emulate Groupon’s incredible success.

Social commerce will take a while to catch on, but is on the horizon. It is an extension of mobile commerce, because technical integration with the “etail technology stack” is needed to create Facebook Commerce tabs, so secure transactions can take place within Facebook pages.

The power of social commerce really shines when, for example, mobile (or Facebook commerce tab) purchases driven by special deals offered to Facebook fans can be shared within (and extended to) the buyer’s social graph, after the purchase is made.

Mobile-Payments-M-Commerce-Transactions

Tap, Tappity, Tap: NFC  Taps Established Consumer Behavior

I’d be remiss if I did not mention NFC (Near Field Communication) in this post. While mobile and social commerce are next up for online purchases on a smartphone, mobile payments at point of sale for smaller transactions will also be a hot topic in 2011. The path to a “mobile wallet” will be rocky, but NFC will emerge as the best way to both validate mobile proof of presence, and conduct small “tap to buy” transactions using value deduction from a secure, preloaded digital account contained within the device. Consumers know NFC and it is easy to use. The fact that three big US carriers have buried the hatchet long enough to line up behind NFC via the formation of Isis, is a powerful signal.

These inherently mobile “real life hot links” need to go somewhere, so NFC will support the rapid growth of mobile commerce as well. Watch for NFC tags to start appearing in pilots/tests on out of home advertising, packaging, and even wine bottle labels.

Conclusions

Mobile commerce drives revenue and location-specific redemption of special offers that can be promoted via social media marketing. Redemption takes the form of real mobile commerce transactions linked to promotions that mimic the powerful Groupon model, without giving up the margins. Mobile commerce will grow rapidly in 2011, as branded apps fade in importance, in direct proportion to increased data speeds,  accelerated location-enabled smart phone adoption/usage by consumers, and the creation of mobile commerce sites by retailers.

Facebook will increasingly play a role in every brand or retailer’s marketing plan. With 200 million accessing it via their mobile device, Facebook will become a place where discounts, sales, and special offers are  not only shared and compared, but increasingly parlayed into converted mobile commerce sales. Facebook commerce transactions that leverage this same technical backside integration and occur within Facebook will not be far behind.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of mobile . He is also running sales for for mobile commerce solution provider Unbound Commerce. Contact him today to learn more.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of location-based social media marketing. Contact him today to learn more.

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Not so long ago, in a Harvard dorm room not so far away, Facebook was born. In record time, Facebook has graduated to the big time.

Today’s announcement of Facebook Deals is very significant, as it shows Facebook is looking beyond contextual advertising and toward the power of mobile “social experiences” to drive purchases and tracked point of sale interaction. Fueled by special deals offered by the legions of businesses who already use Facebook as their primary social media engagement platform, Facebook Deals tips their m-Commerce strategy hand and, as such, is a big deal.

Beyond Advertising

While college students certainly still use Facebook, it seems a broader audience that includes 500 million active users also see the appeal. Facebook has capitalized on this user traffic to the tune of an estimated $600M in contextual advertising last year. This is small beans compared to the close to $30 Billion in annual revenue Google is generating, 97% of which comes from advertising.

While this gap between Facebook and Google is one indicator the size of the advertising opportunity in front of Facebook, they also have the unique ability to capitalize on something perhaps even bigger, by driving tracked proven m-Commerce revenue linked to a specific location-based marketing campaign for small businesses and large brands alike. Google has been trying to back itself into this powerful social interaction value proposition but, to-date, has failed.

200 Million people now access their Facebook accounts via mobile. If Facebook can provide a secure, customizable revenue engine, reporting dashboard, and accounting system that users and businesses both trust, they could be in a unique position to capitalize as m-Commerce finally emerges from uncertainty and takes center stage.

Facebook Well-Positioned With SMBs

The rapid adoption of Facebook by consumers and businesses alike has changed the very nature of marketing. The new two-way street norm of required engagement with consumers has evened the playing field between small and large brands – and has fueled Facebook’s growth and popularity via an ever-increasing stream of relevant content at the same time.

As location-enabled smartphone user ranks swell, connectivity issues improve, and data costs fall, Facebook hopes the day is not far off when all businesses will need a live dashboard that controls a branded mobile Facebook page. This could become more important than having a “standard” website. For many, it already is.

The Check-In Craze: Watching And Learning

As the Foursquare and Gowalla-lead “Check-In” LBS craze swept in last year, Facebook watched and waited. User numbers climbed even without an LBS play and advertisers lined up. Facebook watched and waited, and learned.

When Facebook finally launched check-ins via Facebook Places “way back” in August of 2010 and embraced the unique location-awareness capability of mobile, it was a sparse affair that simply answered the Foursquare and Gowalla challenge. Even if basic, checking in directly on Facebook sped up the process by cutting out the middle man, since Foursquare and Gowalla piggybacked on the users Facebook graph.

Lately and perhaps not coincidentally, the initial novelty of “checking in” via a function-specific platform/app like Foursquare and Gowalla has waned. Even though each company is adding functionality as fast as possible, they simply do not have the local reach to add real consumer rewards fast enough to please most of the people most of the time. Facebook, if nothing else, has this reach, and this add to the power of the timing of the launch of Facebook Deals (yesterday).

Tapping The Power Of The Private Sale

Another location-based force that has rapidly re-shaped consumer interaction with products and services is the “private sale” phenomenon. While it’s long been accepted that consumers will act based on opinions from a trusted network of peers, there are finally ways these actions to translate into real, tracked mobile sales that have the tangible and impactful side benefit of driving live bodies into a retail point of sale.

In the last 6 months, “private sale personalized shopping” companies like Groupon, Living Social, and RueLaLa have been printing money by tapping into the desire for small and mid-sized businesses to drive new customers into their storefronts by offering special loss-leader deals via mobile.

It is interesting to note that CEO Mark Zuckerberg focused in on the “if you get three friends to check-in with you, you get something free” element yesterday. If you use Living Social, you know that this exact model provides the viral, turbo-charged boost they use to spread their deals among the interlocking social graphs of their subscribers.

I heard recently that Groupon is only able to process 1 in 7 deals proposed to them by small  businesses and is generating an estimated $50 Million a month in revenue. Worth an estimated $1.3 Billion while taking in only 135 Million in funding, Groupon is proof that small businesses will share a generous portion of the incremental gross sales, in order to have a shot at winning over new potential long-term customers that they know came in and redeemed the loss-leader offer. If this $50M a month figure is accurate, by the way, it means that the Chicago start-up is roughly matching behemoth Facebook in annual revenue.

Again Facebook has watched and waited, as (literally) hundreds of “daily deals for you” copycat (and well-funded) companies have sprung up and, as such, have proved the viability of the “opt-in daily deal” model on a massive scale.

Since almost 70% of US businesses have a Facebook page right now, Facebook could blow past these”check in for a personalized deal” companies that all must compete with each other and sell-in their solution to one small business at a time (or, more importantly, one giant brand’s “gatekeeper” agency at a time). The latter, in my opinion, is the harder row to hoe.

Into The Path Of The M-Commerce Parade

M-Commerce is a hot topic and, finally, there are real metrics to back up the years of wild expectations and predictions. With Deals, Facebook has stepped off the sidewalk and jumped out into the middle of the street, just as the location-based “special offer” m-commerce parade is poised to sweep over them.

These “daily offers” are nothing more than a new, location-based (mobile) way to promote the same tried and true “chalkboard” restaurant/bar specials or “sale bin” store items you see every day. The difference is that they are discoverable, BEFORE you enter the location/point of sale, when a consumer is in actual real-time physical proximity to that same location and have volunteered their location to the platform that is displaying the deal.

Think mobile is not ready to handle for the volume of potential commerce? eBay will more than double m-Commerce this year, from $600M last year to an-expected 1.5 Billion in 2010.

With the launch of Deals, Facebook is now playing in this hot space and can offer richer and richer solutions for businesses and consumers alike that can scale very quickly. They can capitalize on what has worked for other players with far-less reach that have conveniently prepped the landing zone before them, and avoid what has not.

A Single Solution?

By positioning the mobile Facebook app as the “login” solution that can also serve as an authentication engine, Facebook hints at their intent to solve the problem of “app option overload” for consumers and the “financial backside fragmentation” issue that has long-plagued the e-Commerce world. These elements will be especially interesting to watch.

While consumers do not all enjoy having to open a different app every time they walk into a business, the more important reason Facebook is poised to solidify the opportunity like no other is due to the fact that small town small businesses are generally already familiar with managing the backside page interface. Again, a whopping 70% have a Facebook page.

With so many social media options that may or may not include a customizable LBS m-Commerce element, big national brands (and their agencies) are also seeking a single solution. If Facebook simply can add the “check-in” and related special offers and m-commerce redemption tools they need to what they already provide, the barrier to entry becomes very small across all adoption fronts.

What’s The Big Deal

If mobile Facebook users can act upon a proprietor’s customizable call to action  by being directed to the location near them, debit an account on the same mobile platform that showed them the offer, and link it to trusted input from their social graph, Facebook will be linking the power of social marketing and m-commerce.

If Facebook can prove that consumers will not react adversely to special offers being “pushed” toward them when they are out and about, based on actual location and other algorithmically calculated variables like time, weather, and past behavior, well that would be something.

What if they could prove that consumers will volunteer “personal preference profiles” including what brands they like most, in exchange for real savings linked to location-based local or regional deals personalized for them? Not so far-fetched.

With m-commerce predicted to explode from $1.9 Billion in 2009 to almost $24 Billion by 2015 (see above), Facebook Deals might be just the beginning for the social network. Yes, Facebook Deals is a big deal.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of location-based social media marketing. Contact him today to learn more.

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BREAKING NEWS:

Want to check out the potential impact of location-based Personalized Shopping in real-time? Well, for a while today, you had to wait at least a little while longer to review the role group-buying site Groupon will play.

Their site went down and temporary chaos ruled, due to unprecedented consumer demand for today’s unique deal from national retailer GAP. The (ongoing) deal is a limited time offer for a $50 gift card from GAP, for $25. Free money.

This looks to be the first time a national deal of this sort has been offered and the response shows the true power of offering pre-qualified opt-in consumers a tracked campaign that can be tied to incremental (frontside) retail sales lift.

I have written about this trend previously and the space is red-hot.

Groupon Site Crashes Due To National Gap Deal Interest

By signing up for Groupon, consumers ask to be told about deals near them. Since the GAP is a national retailer, they have locations in every city that Groupon has local coverage in.

My local Groupon Boston discussion board was packed with confused customers, dealing with a site trying to process too much revenue too fast. The good, validating news for Groupon and other Personalized Shopping players like Living Social and RueLaLa is that these confused customers were/are all frantically trying to buy the deal.

This is the online/mobile Personalized Shopping equivalent of a frenzied 6 AM rush through the doors on Black Friday.

Here was the official response from Groupon:

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From Moderator “Josh At Groupon” (14 minutes ago):

Everyone experiencing site issues:

Thanks for your patience and sorry for any inconvenience. We’re experiencing an unprecedented level of site traffic today and are monitoring the site all day. If you’re experiencing some technical troubles with the site, I suggest trying to reload the page a few times. If you continue to experience trouble and need to leave the site for a while, just check back before the end of the day and buy your Groupon then! This deal will be available until midnight. Again, very sorry for the trouble.

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In Boston alone (I refreshed a few times and the page loaded without a “Something Broke” error message), at the time of this writing this, 5898 people (and counting, fast) bought the deal (and there is still over 9 hours to go). That’s almost $150,000… at mid-way through the deal, and in one city.

Groupon is in about 75 US markets, so, even if we stopped the deal now, that’s in excess of $11 Million in revenue, sold to about 450,000 people, in a single day.

And, assuming Groupon customers do not melt-down their servers entirely, there is still 9 hours to go. Phew. No wonder they are valued at  over $1 Billion.

Some lessons here are to 1) carefully consider the impact of the fine print on hundreds of thousands of shoppers 2) do not under estimate the enthusiasm of a populace seeking a great deal near them and 3) location-based Personalized Shopping is here to stay and is about to get a whole lot bigger.

Read more about my take on Personalized Shopping here and let me know how I can help your brand take advantage.

-WK

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Wilson Kerr (@WLLK) is a former Tele Atlas exec who started Boston-based Location Based Strategy, LLC in 2007 and is helping his clients harness the power of Personalized Shopping. Contact him today to learn more.


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Wilson Kerr (@WLLK) is a former Tele Atlas exec who started Boston-based Location Based Strategy, LLC in 2007 and is helping his clients harness the power of Mobile Proof Of Presence. Contact him today to learn more.

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The promise of location-based mobile advertising has been painfully slow to materialize. It seems the last five years have all been declared “the year”, with the usual cliché examples flogged. Most brands and their agencies still pace the sidelines, waiting and watching. If they do add mobile to their spend, they tend to replicate the click-though web advertising approach, and miss the full potential.

In this post I will explore the rush of start-ups seeking to perform an end-around on the mobile advertising blockage, by betting that personalized, actionable, tracked, direct to consumer sales promotions that are location-based will finally unlock the true potential of mobile. In past posts I have discussed incremental, tracked sales revenue “lift” and the importance of remembering that brands make money by selling more products through authorized retailers, not by exposing their brand or driving people to a corporate informational website.

 

Driving Boots In The Door Is Key

The difference between an ad and a personalized location-based special offer is subtle, but important to understand, as we consider why “personalized shopping” start-ups are springing up so fast (and attracting so much VC attention). Mobile marketing, when linked to a call to action based on real-time proximity to a retail location (and honed by a personal preference profile) can finally show ROI by linking itself to proven in-the-door foot traffic (and converted sales). Thankfully, the platforms are now there to allow this to happen.

Discounts and special “limited time offers” are not new and have been around since the first baker made a double batch of bread by mistake and needed to sell the excess before it went moldy. By dropping the price, he increased sales volume and attracted new customers to his bakery. By selling more, he discovered he got a better wholesale volume price on the flour. So, even though he grossed less per loaf, his net profit per loaf held up, and he sold more bread and made more money. Simple math.

I have an admission. I check-in on Gowalla,  tweet on Twitter, post Facebook updates based on where I am, scan QR codes, use apps to find business addresses, and see a lot of contextual mobile ads, yet, after almost 3 years as a full-time mobile LBS consultant, I have never actually bought anything as a result of a location-based offer. That streak ended last Tuesday.

$25 For $50 Gift Certificate Prompted My First Location-Based Purchase!

I spent $25 on a location-based offer from Living Social, for a $50 gift certificate at a nearby restaurant called The Fireplace. (My wife is a “foodie” and enjoys dining out the same way I enjoy a day on a trout stream). How could I not? What is really amazing is that, in the 2 days the deal was offered, 925 other people also bought it, generating $23,150 in tracked, incremental revenue, all tied to a single, specific marketing message. Obviously Living Social takes a %, so The Fireplace does not take all this in, but the real value to them is the opportunity to win over repeat customers when they come in the door and sit down for a meal. What traditional ad or coupon or campaign could they possibly run that offers this sort of (tracked) response?

My First Purchase Based On A Location-Based Special Offer!

I checked Living Social competitor Groupon as I was writing this up, and they were offering a nearly identical deal from The Fireplace as well! (Groupon is a volume-“triggered”, limited time, personalized, local discount offer platform). I thought I was misreading the numbers…but over 4,500 people paid $20 for a $50 gift certificate, so far. Wow…that’s over $90,000 generated from a single deal, and counting. When is Groupon going public?! Are they hiring!? Check out the numbers on these deals. Remarkable.

Volume "Triggered" Discounts

Living Social and Groupon are but two such companies harnessing the power of delivering opt-in deals based on location and, I believe, they are on the leading edge of a “personalized shopping” craze that is about to sweep the mobile industry. Groupon, by the way, is not even 2 years old and is valued at least 1.2 Billion (yes, Billion). If they can sell 4,500+ visits to a single restaurant in a few days, what else can they do?

Another standout to watch, besides Living Social and Groupon, is RueLaLa. They serve up invite-only fashion brand discounts (via daily “boutiques”) to 2.4 Million members! There are hundreds more personalized shopping wannabe’s starting up now, to vie for a slice of the personalized shopping pie. Here is a quick sampling; Eversave.com, Woot.com, DailyDeals.com, DailyDeals.net, SaleCamel.com, FuseDeals.com, DailySteals.com, and DailyCheckout.com.

The ones that will win will use algorithms to learn from real purchases and deliver increasingly personalized and location-based offers that drive (tracked) foot traffic into physical locations.

Platforms/apps that track in-store metrics showing both foot traffic (MPOP) and sales conversion (redemptions) that are fueled by personalized location-based special offers (delivered by smartphone), will bridge the gap between the virtual world and the physical world. These platforms (with Mobile Proof Of Presence as a foundation) are about to become the hottest thing going.

Gowalla, Foursquare and their kind and doing some great things, but should consider that advertisers will want accurate metrics regarding brand interaction, within a retail environment where hundreds of brands might be present. For coffee shops and restaurants, their model works pretty well, but inaccurate and “fake” checkins are going to prove an achilles heel as/when the brands with the real money to spend get a taste of “tighter” MPOP accuracy via other options.

In April of this year, I wrote a post about the significance of validated MPOP (Mobile Proof Of Presence) and maintain that hyper-accurate MPOP validation linked to special offers, not mobile ads for brands, will be the key to finally unlocking the full potential of mobile. And it’s happening.

The LBS world was recently rocked by news that a pre-launch application called Shopkick had attracted $20 Million in VC funding. That’s right, the application has not even launched in beta, and the company has attracted what Mashable calls “an obscene amount of investor attention”.

 

Why, you ask? Because Shopkick intends to validate MPOP in a whole new way (they call it the Shopkick Signal), via installed in-store equipment that eliminates fake checkins and delivers marketing messages based on very tight proximity, within a store and without GPS. This means brand-specific checkins are possible, and they are accurate. According to a recent Techcrunch article, Shopkick co-founder Cyriac Roeding is quoted as saying, “This is all about foot-traffic. So far, no one has nailed a way to entice people to actually come to the store that makes sense to the retailer“, Roeding says. He goes on to say,“This is the physical world equivalent of an online click,”. Hmm.

Attracting "Obscene Investor Attention"

I assume the platform also will learn actual shopping and buying behavior and personalize the offers it serves up based on a powerful cocktail of mobile delivery+retail locations+brands carried+loyalty rewards+MPOP+special offers+redemption/ conversion tracking.

The platforms (like Shopkick) that capture accurate metrics generated by opt-in consumer interaction with retail locations (and sales conversion of branded products carried within those locations) are going to become very attractive to retailers, brands, and agencies sick of being screaming at by their clients to provide just such a solution. Remember, this is information that consumers ask for, and they are rewarded with savings on products they buy, in stores they visit.

Brands and retailers alike might finally step off the sidelines and onto the field, if they can track ROI and link incremental sales to campaigns, while providing a positive consumer interaction with both the brand and the retail stores authorized to carry it. The era of personalized shopping is upon us and mobile, at long last, might finally starting living up to its potential.

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Wilson Kerr is a LBS Consultant focused on helping companies understand and harness the power of  Mobile Proof Of Presence. He is also wondering  how he will slip the waitress his 50% off Living Social coupon at The Fireplace without his wife noticing.

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By Wilson Kerr of LBS consulting firm Location Based Strategy, LLC.

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Nokia’s newly-announced free navigation is being positioned as a planned part of their Location Based Services (LBS) offerings, delivered via their “Ovi” web services platform. The goal is to drive more device sales and, in the future, make money by selling web-based services and displaying ads to those who own these phones.

Is “free nav” from Nokia a part of a plan, or a defensive reaction to try to take back lost smartphone market share and try to establish a US beachhead in the face serious pressure from “new” movers and shakers like Google, Apple, RIM, Palm, and others?

Nokia Jumped On The Free Nav Bandwagon

It certainly seems Nokia had no choice but to go this route, as they are in market share freefall and have had no answer for the beloved iPhone, years after its launch. They lost 10% smartphone market share in Q4 2008, while Apple and RIM took off. In the middle of all this, Ovi’s May 2009 app store launch was widely considered a flop. Now Google is in the mix too, bringing some serious mobile advertising chops to-bear. Nokia makes excellent hardware and have a dominant global market share position (38%), but they seem to have stood by and watched, as the US mobile advertising market rapidly evolved. They let Google jump behind the counter while no one was minding the store.

“While smartphone sales overall increased 3.7% in Q4, Nokia’s share slid from 50.9% to “just” 40.8% on 15.6 million units. While many, including Samsung and HTC gained, it was RIM and Apple that made the biggest advances. RIM increased its share of the lucrative market to 19.5% (7.4 million units) from 10.9% while Apple more than doubled its share, up from 5.2% to 10.7% (4.1 million units).” Source.

Nokia dropped $8BN to buy Chicago-based Navteq, the leader in US base map data and Nokia bought their own navigation routing engine (Gate5) in 2006. Nokia acquired Boston mobile ad agency Enpocket almost exactly a year later. Navteq, before it was acquired by Nokia, invested in (and now owns) marketing agency Acuity Mobile. In December of 2006, Navteq bought The Map Network, a small company that was doing some very interesting things around placing the branded locations of hotels and restaurants near convention center maps. This morphed into Direct Access (video link)– a program that allows retailers to plug in locations and logos, as ads, into Navteq maps. They also own Traffic.com, which makes a majority of its revenue from location-aware advertising. Location Point (video link) is what Navteq calls their ad services.

So, the Nokia/Navteq paid services and advertising capabilities deck is long, but can they sort out all the moving pieces to form a coherent strategy and move “beyond the device” and establish new effective revenue-generating touch points with the users of their devices?

What started this ball rolling, remember, was when Google blew the lid off the “free nav” can of worms back in October 2009, announcing free navigation on free maps, via their Android mobile operating system (on up to 35 phones)! Google loves giving away a free services to open up more opportunities to sell ads. Maybe we should start calling this disruptive innovation tactic “Freegling”?

So Nokia answers Google to try to gain back marketshare. Not much of a statement until you stop and consider that Google is not a device manufacturer. Google sells ads and they are very good at what they do. All products lead to this profit center and they can loss leader like mad to drive more people to see their ads. Free is their friend and people like free.

Free works, as long as there is a “Trojan horse” element in the form of advertising, paid value-add services or market share upside that pays for free. Nokia is certainly in a good position today, as they have sold more phones capable of running navigation served by their Ovi platform than there are dedicated personal navigation devices on the planet. While device sales are brisk now (esp in Europe), the long-term problem is that they have almost no market share in Google’s US back yard and they have no track record of getting people to pay for Nokia services, after they buy the phone.

Nokia launched its first phone in 1987. Google’s founders were likely in 7th grade and would not start Google for 11 more years. Nokia has a market capitalization of about $47BN, while Google’s is about $172BN. Nokia says it would like to generate about $2.89BN in annual revenues from web-based services offered to users of its phones by 2011. Google makes this amount via web-based services..about every 5 weeks. My point is that, if Nokia hopes to catch up by charging the millions of users of their devices for “after sale” services and delivering ads on the back of free navigation, they had better get moving.

Nokia is now up against a lot more than Google for ads and apps. Their free nav move has just forced every other navigation platform and device company to rapidly accelerate their location-aware advertising and web services plans. Location-specific advertising served by proximity to those using their phones to get where they are going is (finally) about to become the hottest game in town.

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Wilson Kerr started the Location Based Services (LBS) Consulting Firm Location Based Strategy, LLC in 2007. He is amazed by how fast the ad-supported mobile navigation landscape is evolving.

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