Short Codes Are Long on Bottom-Line Benefits

Short codes have been around for a long time because they continue to be a trusted, convenient and effective way for consumers to interact with businesses. Retailers provide a five- or six-digit short code in their advertising, and all consumers must do is send a text message to that number to opt in for alerts about sales, exclusive promotions, product launches, new stores and more. In fact, 48 percent of consumers say that due to their convenience and ubiquity, text messages are their preferred way to receive updates from brands, according to Constant Contact.

Consumers trust text messages that originate from short codes. One major reason is because spam from those numbers is very low thanks to a highly effective combination of federal regulations, best practices and industry oversight. For example, businesses must use the Short Code Registry to receive a short code, which can be a random set of numbers or ones that spell out their company name, such as 78673 for “Store.”

This high level of trust has boosted text message open and clickthrough rates as high as 98 percent vs. just 22 percent for email, making it the preferred choice for advertising. Therefore, it’s no surprise that during the pandemic CVS, New York City, Florida and others relied on short codes to provide people with a trusted source of vaccination reminders and other critical information.

Adding AI to Boost Revenue

Brands are starting to use artificial intelligence (AI) to make their text messages more relevant and compelling — taking an effective tool and making it even better. For instance, generative AI tools such as Attentive AI can analyze each customer’s browsing history on the retailer’s website to make personalized suggestions that boost sales. “This targeting works,” EMARKETER says. “Retailers like Rainbow and SwimOutlet that used Attentive’s AI tools saw 117 percent more purchases, according to the company.”

In the past, retailers might have sent the same text message promotion to all customers, or all female customers or all female customers who purchased a certain product. With generative AI, they can now send a highly personalized message to each customer based on what they’ve searched for on the website. Customers also could receive a different message based on a product they left in their cart, with the personalized promotion — “Take an extra 15% off now!” — converting that abandoned cart into a sale. SwimOutlet says generative AI “is changing the game for us — with 600 percent increase in total revenue.”

A Powerful Tool for Loss Prevention

Short codes also help retailers protect their brand reputation, bottom line, and customers against fraud. One of the most common scams in retail is phishing, where fraudsters send consumers fake discount codes and other promotional offers if they agree to share their personal information.

By using short codes to engage customers, retailers can ensure that they know when messages are coming from a legitimate, trustworthy source — and when they're not. For example, when customers suddenly see promos coming from a new, unfamiliar number rather than the brand’s usual short code, they’re much less likely to take the bait.

When retailers leverage short codes to protect customers against identity theft, it directly benefits their brand reputation and bottom line. For example, each failed phishing attempt means less time and money spent fielding and investigating customer complaints about fraud.

Finally, thwarting fraud helps preserve short codes as a trusted channel not only for engagement but also in e-commerce channels for things like PIN verification, two-factor authentication and one-time passwords. All those benefits highlight why short codes are more important than ever for retail success.

Mykola Konrad is senior vice president, head of product, iconectiv, a company that offers robust infrastructure and fraud prevention measures to ensure operational continuity and regulatory compliance.