What Meijer has Learned From its Mobile Initiatives

How Meijer, a regional American hypermarket chain based in Walker, Mich., uses mobile marketing was the subject of a well-attended session at the Direct Marketing Association's Retail Marketing Conference 2010 in Orlando last month.

During the presentation, Tim Baumgardner, director of media/advertising for the superstore chain, discussed a few of its succesful mobile programs.

Meijer's first foray into the space was its "gas alerts" program, a free early warning system sent to consumers warning of gas price spikes. Meijer sends text messages to participating mobile phone users two hours before prices increase at the retailer's gas pumps. The program was started as a test in Indianapolis and western Michigan in 2007; it now boasts 30,000 members in each state where Meijer has gas stations — Ohio, Michigan, Indiana, Illinois and Kentucky.

Users can sign up for the service in one of the following two ways:

• visit Meijer.com/text/ and follow the instructions; or
• on your cell phone, text "gas" and your five-digit ZIP code to 634537 (Meijer). For example, gas43614.

To ensure users receive information about prices closest to their homes, they're required to submit a five-digit ZIP code.

When gas prices are changed with less than a two-hour notice, messages won't be sent because company officials don't want to encourage unsafe driving by motorists racing to the station before prices rise. The text messages are designed to boost sales of gas and other products at the chain's convenience stores.

In 2009, Meijer introduced its "Mobile Alerts" program, an SMS program that promotes exclusive offers and corporate events.

"We promote credit card discount days, e-commerce promo codes and one-day sales events with this program," Baumgardner said.

To encourage sign-ups for the mobile alerts, Meijer partnered with companies such as Redbox (a DVD rental company) and Snapfish (a web-based photo sharing and photo printing service).

Consumers text a mobile code to receive text messages from Meijer and a free, user-specific Redbox movie code promo valid one time for a free movie rental. Meijer has also expanded its mobile program with mobile apps.

Meijer's Wine List iPhone app — which enables on-the-go consumers to explore wines — won a 2010 Silver Racie award. Sponsored by the National Retail Federation, the Racie Awards honor the best retail ads, commercials, digital efforts and communication materials during the past year. Each piece of work is judged on creativity, strategy, results and innovation.

Meijer has also since added a web-enabled mobile commerce site and a mobile circular. What's more, a high percentage of Meijer's social posts are coming from mobile phones, and Baumgardner said Meijer is looking at this as a "real-time opportunity. When you use social to support mobile, watch SMS offers go viral on Twitter."

So, what has Meijer learned so far from its mobile marketing/mobile commerce initiatives? Baumgardner listed the following four things:

• Dabble in the space, but only for a short time. "If your coporate office gives you a little bit of a leash, make sure to present them with results, and fast," he said. "All the metrics are fine, but where are the sales, the ultimate KPI?";
• complexity is an understatement;
• always changing is an understatement; and
• as media consumption behaviors evolve, "figuring [mobile] out has become job number one," he said.

Also during the presentation, Mike Romano, co-founder and executive vice president of SmartReply, a mobile technology and services provider (and Meijer's mobile vendor), discussed why mobile is an important tool today.

A key reason, Romano said, is the decline of traditional media. Forty-four percent of viewers skip through television commercials with TiVo/DVR; costs are increasing for direct mail; and an average marketing email is read within 48 hours.

On the other hand, SMS text messages reach literally 100 percent of mobile phones today; the average text message is read in four minutes; and the average age of a text message user is 36.

Another reason mobile is hot, Romano said, is because of changing consumer lifestyles. Seventy-two percent of the population, for example, use a mobile phone as their alarm clock. What's more, six out of 10 people sleep with a mobile phone physically in bed with them. Finally, more and more people are using mobile coupons, and their response rates are averaging 6 percent to 20 percent.

As an example, Romano discussed a monthly mobile coupon program his company created for Lane Bryant. The program allowed Lane Bryant customers to redeem their mobile coupons in-store or online. The results? Lane Bryant saw a 6 percent response rate and added more than 1,000 new mobile customers per week.

Romano also discussed mobile trends to be on the lookout for. One was geo-fencing, the latest trend in location-based services. Geo-fencing is setting up a virtual perimeter — i.e., a “fence” — around a location, such as a restaurant. When people carry cell phones across that perimeter, the system becomes aware that they're physically nearby and can push information to the phones, such as a list of today’s specials.

Companies like Shopkick, Loopt and Placecast are already providing geo-fencing-related services, but it’s still a largely unknown concept.