A survey says Canadians are open to receiving personalized promotions on their smart phones while shopping. An Indigo Books and Music app debuting in the fall will use analytics to deliver the right in-store offer at the right time

Most Canadians would respond favourably to a promotion delivered to their smart phone from nearby stores while shopping, according to a recent survey by research firm Leger Marketing commissioned by analytics software vendor SAS Institute.

The May survey found 58 per cent of Canadians would like personalized promotions delivered to their phones. Offered a deal on a complementary product to one they’re considering, 38 per cent said they’d buy both products.
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“Personalized” is the key word.

“It’s not that they want more (marketing),” says Lori Bieda, SAS Americas’ executive lead for customer intelligence. What the customer is after is the right offer for them at the right time.

“Analytics is really the foundation of how to do that well,” says Bieda. “Mobile devices up the ante in terms of how fast to react.”

Personalized offers rely on both structured and unstructured data. On the one hand, there’s historical transactional data from online purchases and loyalty cards; on the other, there’s click-stream information and, for example, e-mail interactions with customer service, says Bieda.

Indigo Books and Music plans to go live this fall with an app that’s a mixture of loyalty program, e-commerce discovery and enriching the e-commerce experience, says the bookstore chain’s CIO, Sumit Oberai.

The main focus will be on Indigo’s popular Plum card loyalty program. The virtual Plum card will help users keep track of their status and how many more transactions are needed to get to a new tier, recommend content and maintain gift and wish lists.

The huge penetration of the loyalty program among Indigo customers – 60 to 70 per cent – is a data-gathering advantage for the bookseller. “That’s atypical in a retail world,” Oberai says.

Another is the fact that 12 per cent of Indigo’s business is done online. That brings more data, both individual and collective, to the table to personalize mobile offers. “That data is very valuable,” Oberai says.

That information is gathered in a marketing information management system, undergoes marketing analytics and reaches a marketing decision engine, which connects information to action in real time, says Bieda.
When new, technology-based methods of reaching customers appear, there’s a tendency for the IT department to treat them in isolation, says Bieda.

“Every time you get a new channel that pops up, people treat it as an island,” Bieda says. In fact, mobile marketing is part of an ecosystem that includes online and in-store interactions. Mobile marketing has to be incorporated into an “ominchannel experience” of shopping while respecting the customer’s preferences for interaction.

While Oberai expects “a strong V1” of the app, there’s more to come, he says. One feature that’s not in future plans is a mobile payment option, à la Starbucks, though it will support virtual gift cards. Mobile payment fits better with a quick service model, Oberai says.

“We think that’s a little less relevant to our customers,” Oberai says.

But future plans could include geolocating customer traffic within stores. Oberai uses the analogy of the online shopping cart; through click-stream data, a merchant can determine where (and theorize why) a shopping cart is abandoned.

“I don’t have that in my store,” Oberai says. Tracking customer traffic through the store could tell merchants how many people walked by a fixture, looked, and walked away. That kind of information could be used when Indigo remakes its store layouts, which happens eight time a year.

“Step 1 is knowing,” Oberai says. “Step 2 is reacting.”

Oberai says that application of the technology is in an early pilot stage in the retail industry at the moment, but will become common within the next three or four years.

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