Mobile & Location-Based Marketing: What to Watch in 2016

Target, Sony and Ashley Madison: the hacks that defined 2015. As consumers forge ahead into a New Year, it may be hard for them to shake that hovering gray cloud of insecurity. In a way it felt like consumers sort of just ignored its existence, but now they’re fully aware. Perhaps 2016 will be a year of knowing how to live with it. Perhaps mobile payment will become a solution. We shall see, which is the intention of this article – to note what to keep an eye on in 2016.Personally, I’m not a fan of “prediction articles.” They almost never come true, but I do believe there’s merit in transitioning from one year to another and making note of what could change. And with the help of some friends (see “Consultants” box) who know more than me, here are six areas to watch around mobile and location:Mobile PaymentApple Pay, Android Pay, Samsung Pay, CurrentC and other mobile wallet providers have emerged. And while mobile may represent a third of e-commerce sales in the U.S., according to a report from Internet Retailer, and browsing over smartphone has dramatically increased, pulling out a phone to scan at a register instead of a credit card is not in the near future. Needless to say, shoppers are in a very early state of simply adjusting to loading a credit card or a bankcard to the phone. That is a behavioral issue to watch in 2016: Will shoppers get more comfortable with mobile pay in stores?Beyond that, mobile payment could have other impacts on the year ahead. For one, when it comes to that concern of security, mobile payment is safer. First, there’s fingerprint authorization over a PIN. Secondly, after putting a credit card into a phone and swiping a scanner in-store, the credit card number isn’t stored into the system to be hacked and grabbed like a Target hack. There are concerns with stealing a credit card from the cloud, but it’s not so easy and a lot of information about the person is required beyond just getting a credit card number.Digital promotions can also be vastly improved by mobile payment if an auto-apply method can be solved. Meaning with one swipe of the phone, payment and coupons are automatically added. One source told me that card-linked offers currently are incredibly complex, so maybe mobile payment can be a smoother bridge and be a simpler way to save for shoppers. As Chuck Moxley of 4Info told me, “if you change too much behavior, it’s hard to get success.”PersonalizationIf the first step is getting a promotion seamlessly processed and linked to mobile pay, the second initiative is to deliver a personal, one-to-one offer. And the pressure for 2016 isn’t to talk about personalization but to have some real case studies emerge.Location-based tracking devices on phones give brands great ability to learn all about consumer and shopper behavior. But as Haley Rubin of Heineken says, “To many, the data overload is overwhelming and they do not have the courage to jump in and take a ‘leap of faith.’ We at Heineken USA are jumping in and attempting to leverage the opportunity to our advantage and drive more sales of our products as a result.” Rubin says the mobile device will further become “life’s central remote control.” Consumers use it to adjust heating in the home, view TV shows, pay bills, etc.The pressure for 2016 isn’t to talk about personalization but to have some real case studies emerge.And so there’s a big crossroad coming, whether it’s in 2016 or later, and it’s how well brands manage messaging to fit the lives of people who use their phones like a remote control. Brands will need to master consumer and shopper behavior to send messages at the right time that matter, and everyone interviewed said they have the ability. Because if they don’t: “With the ability to clear cookies and the increasing availability and usage of ad-blocking software, consumers are showing less tolerance for advertisements that don’t add value to them and are irrelevant,” says Max Knust of MaxPoint.Furthering the point, John Boyd at ShopSavvy says that “location data is likely to become commoditized in the next two to three years.” It’s not enough to know a shopper is near a store, but you also want to know the products she is shopping for and what deals she would most likely respond to. Personalization is the key to location and consumer buy-in.Beacon Data“Notifications are like a sweet drug,” jokes Navneet Loiwal of Shopular, because the bombardment of notifications equal a large bump in app usage in a short time. No matter how they’re sent, notifications must be relevant, he says. The early review on beacons from each source is a fear that they push too much and all over the store. So in 2016, the pusher man goes.And yet that’s not even the biggest issue facing beacons – it’s scale and ownership. First, the retailer has to install a beacon, which is one issue of scale. Secondly, the shopper has to have the app that talks to the beacon. Moxley points to a retailer like Safeway as someone who will have success because the retailer’s app is good and they have people using it, but currently a lot has to fall in line and that’s not going to change much.Loiwal says another issue is that beacons are privately owned, which of course makes sense because the retailer owning it makes a business out of it. But he says it holds back true innovation and can lock up parties into a situation that may not be working. “In 2016, we’ll see case studies that show public beacons are the way to go, that’s my hope,” Loiwal says.Another possibility is that the beacon evolves into more of an analytics tool than a messenger. Beacons will always be tremendously powerful in giving a retailer an understanding of how a shopper shops an aisle, her path throughout the store and how she interacts with promotions. So if beacons are overserving notifications, maybe they’re better off simply watching.Wearables for the HealthyNo trend article would be complete without a mention of the Apple Watch and wearables. However, looking to a New Year, the trend to watch is around health and fitness. Multiple sources said consumers have found use in wearing a watch to monitor workouts and health. To me, however, this is a great example of how consumers adapt to a wearable like an Apple Watch. So the real trend to watch is how consumers continue to use a watch and what they get out of it. This is more important than anything a watch or wearable can offer currently.As for smart shirts and smart textiles, no one expects anything to really change. Major tech-crazy, gizmo chasers may buy something, but it’s still not practical. You aren’t going to wear the same shirt every day, are you?Meaningful MeasurementMoxley says 4Info ran focus groups with brand advertisers and agencies in New York and Chicago to learn about issues they faced and saw overwhelming confusion from both ends around measurement. With all that’s thrown at them in terms of different ways to measure and so many different platforms, “it’s like drinking from a fire hydrant,” he says.Advancements may be made in ironing out measurement. A starter could be clearing up issues of fraud. There are apps that charge brands for ads that aren’t actually being viewed by a consumer so the brand pays for a fraudulent impression. Moxley says using a platform that measures against sales lift removes that issue, but he says brands seem to still not be fully aware of what’s available such as using a platform that leans on centralized data sources or panel data to target and measure.There are apps that charge brands for ads that aren’t actually being viewed by a consumer so the brand pays for a fraudulent impression.He says there are flaws in some location measurement platforms that measure visits. The location technology recognizes a phone in-store and measures a campaign based on the shopper being there. However, he says with thousands of UPCs in a grocery store, if a butter company sees a consumer go there seven times in a month, are they really buying that many tubs of butter? Not likely.He says there’s a lot of guesswork with some platforms. You know how many people are in a store but you don’t know if they’re buying. And the location of that shopper is dependent on whether or not the shopper is seeing an ad request on an app that generates an ad request, which a lot of times could be a game app or something, which is not likely to be opened up during a busy shopping run.Knust sums up the power of mobile measurement for the future, once it’s ironed out: “Mobile and location-based marketing will provide brands and agencies with an increasingly holistic view of consumer purchase intent by adding a new layer of measurement – mobile will enable marketers to pinpoint foot traffic within a store and produce deeper, more meaningful insight – how shoppers move to, around and in a store.”

Mobile & Location-Based Marketing: What to Watch in 2016

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