Friday, December 3, 2010

Location-Based Marketing 2--Check-In Programs

Black Friday and Cyber Monday have both come and gone. Black Friday filled the stores—from midnight on!*!—with shoppers who often used Black Friday websites to locate deals before they braved the stores. Cyber Monday online sales were over $1 billion—the most ever for a single shopping day!

I want to focus in on just the check-in programs as a new and powerful shopper stimulant. There are the “old-fashioned” apps that let you compare prices in the retail store. Apps like TGI Black Friday (DealCatcher the other 364 days of the year!) aggregate coupons and deals from all over. Shoppers find them valuable, but the real action is in check-in campaigns run by individual retailers. Analytics by Mashable show Target far in the lead in terms of number of check-ins. I got there too late to check out the Black Friday tab, but the Weekly Ad page shows the variety of channels for accessing weekly specials and the opportunities for check-in promotions that include contests, give-aways and special deals.

One of the big winners this holiday season has been Sports Authority, mentioned in my earlier post as having a $500 gift card give-away on Black Friday. As this quote suggests, the company considered it a great success—and it didn’t even make the Mashable list of the top 10!

"We saw a lift anywhere from 5X to 20X for the number of check-ins," said Clay Cowan, VP of e-commerce for the Denver-based retail chain. "Every metric of engagement that we tracked went through the roof. Whether it was Twitter posting, Foursquare check-ins, Facebook friend adds and comments...we saw increases."
On Foursquare, the brand had around 400 followers before the campaign and now has almost 4,500. . .”

Three important points. First, Sports Authority has been testing Foursquare promotions since early this year. They had a process in place. Second, they’re not resting on their laurels. They now have a 21 Days of Deals promotion in place. The box from their home page shows strong integration with Facebook. It’s easy to guess that they may have other Foursquare promotions that will be promoted on their Facebook page. That’s the third issue; marketers need to use something timely like Facebook or Twitter (or both) to publicize these short-term deals beyond their mobile app subscribers. This material is too transient for web site promotion unless you’re running a big campaign announced far in advance.

That’s one strategic was of looking at location-based promotions—the specific campaign. There is another—the integration with long-term loyalty programs. According to Fast Company Safeway is testing a partnership program with Pepsi in its California Vons stores. It’s built on the existing loyalty card, the important difference from most of the campaign-type programs we are seeing. When the shopper checks in with her Vons card, she can receive instant rewards (coupons at check-out) on PepsiCo products. It’s possible to set the program up so swiping the card checks the shopper in and rewards are “shouted out” on Foursquare. It’s a bit hard to find the Foursquare page on the Vons site, suggesting local promotion of this test program.

Does this predict that the future of the loyalty card is on our cell phones as suggested by the New York Times? It’s worth considering!

Before you get too excited, though, keep the recent Pew research in mind. A report published in early November says that only 4% of Americans use location-based services at this point. Ok, the target audience is relatively small at this point. The good news is that this market is in its early days and thoughtful marketers have time to test and refine strategies. This space is exploding, though; I’d recommend starting right away.

And as you do it consider an even more far-reaching possibility: The future of convergence may be the cell phone. That will stand conventional marketing on its head once again!

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