From Social to Mobile: Winning Mobile Strategies

Company: Blue Nile

Founded in 1999, Seattle based Blue Nile is an online retailer specializing in selling diamond jewellery. Diamond rings account for a large portion of its business. Blue Nile is an excellent example of a company discovering the need for, and then designing and executing an effective mobile strategy. The push to create a mobile strategy began after market research done for the company discovered a trend among the millennial demographic of 25-35 year old men. They were browsing the Blue Nile website on their mobile devices. The iteration at that time was a website designed for the PC and laptop user. Blue Nile realized the mobile user was set to encounter a less optimal user experience on their mobile devices. They subsequently invested in a mobile strategy that has proven to be extremely effective in raising their market share and increasing profits. They designed a responsive website that enabled mobile phone users who also have tablets and laptops to continue the shopping experience seamlessly across all platforms. They also developed an app for Android and iphone to target Smartphone users. Blue Nile also created a heavy social media presence that is blowing its competitors out of the water. Blue Nile has been using  social media channels Facebook, Twitter, Pinterest  and Instagram to start conversations around their products, and to understand the customers better,  while raising the value proposition of their products to consumers. The retailer uses social media marketing very extensively and uses the visual appeal of its products effectively to engage and attract customers. Blue Nile is also using new strategies to maintain its upward momentum by partnering with department store giant Nordstrom’s to offer a unique shopping experience dubbed “ bricks and clicks” The idea being that Blue Nile would showcase a cross section of their diamond collection in display case form and have a rep on hand with an ipad to direct and help shoppers to use the online functionality for purchase.

The Blue Nile mobile strategy is;

Effective

What makes a good mobile strategy? In-depth analysis and understanding of customer behaviour is another factor to consider. Within one year of the mobile website launch, “More than 20 percent of our shoppers are using the mobile site.”  says CEO Diane Irvine. The reason being is that it gives people the flexibility to shop wherever they are. “This will become the future of shopping.” Blue Nile has seen profits rise even in a recovering economy, in an intensely competitive market as a result of focusing on customer experience through a mobile strategy. Their unique online experience of educating consumers about diamonds and then offering a build your own ring interface that gives consumers more control over the product. Blue Nile also makes good use of mobile analytics to drive future strategies.

 Potential risks the company is exposed to through its strategy

  • Technology is an ever changing model and must therefore be monitored constantly and maintained with ever evolving strategies which could prove to be costly.
  • Vulnerable to security breaches: the whole shopping experience is done online and as such Blue Nile is heavily dependent on the technology working efficiently. Significant cost goes into maintaining security for customer information and credit card transactions as well as the fact that Blue Nile trades in precious stones and could be susceptible to sabotage more than the average website.
  • Online retail can reach a wide target audience and increase sales internationally, but this also means having to deal with international law, taxes and tariffs, customs, theft of product during shipping cycles, difficulty with different levels of e-commerce effectiveness, foreign currency exchanges risk and many more…
  • System interruptions mean a halt in business.
  • Many consumers have still not migrated to online shopping and as such an entire market is underutilized.
  • Government regulation controlling e-commerce could change at any time making it more difficult for online retailers.
  • Competition is fierce and other precious stones retailers are moving to mobile avenues for future growth.

Company: Starbucks

Starbucks has been very successful at creating a “bricks and mortar” operation that spans the globe. “Starbucks will have more than 20,000 retail stores on six continents by 2014”  Coffee, always a daily staple to so many people once was thought of as an inexpensive and perfunctory experience not requiring any of the bedazzlement of today’s coffee enterprises. I wonder at times how a company like Starbucks has managed to take a relatively mundane drink and turned it into a plus 5 dollar a cup for a “latte” industry. Their habit of creating a successful enterprise has migrated to the mobile web and its mobile strategy has duplicated its past successes.

Mobile Strategy approach: Increase User Engagement

  • Using MRAID for ad campaigns on the mobile web. “Mobile Rich Media Interface Definitions. This means ad units not only expand to fill full mobile screens, but they incorporate the unique mobile features of swipe, tap, and shake for users to engage with their brand and then share within their social sphere.
  • Mobile Payments & Transactions: Starbucks recently launched its newly enhanced payment app for iPhone where customers just need to shake their phones for the payment barcode to display. It also launched the digital tipping option where customers can tip their barista through their phones. As a result the company drove over $1 billion in mobile payment revenue in 2013, according to estimates from Business Insider’s research service, BI Intelligence.
  • My STARBUCKS rewards earn points if you use the mobile app (incentive)12 million active monthly mobile users as of July of this year and growing.
  • Loyalty programs play a critical role in retailers’ success. The Starbucks app captures all of your purchases, gives you points and advances you to tiers where you can get promotions and offers, which ultimately attracts you back to your nearest Starbucks location. free Wi-fi in their stores, one of the first to do so.
  • Free Wi-fi in their stores, one of the first to do so.

Effectiveness

Starbucks has an overall effective mobile strategy.  Aside from offering a convenient and easy way to purchase coffee while engaging mobile users Starbucks offers a high functioning mobile app as well as virtual giftcards and coupons. Starbucks is effective at enhancing the customer experience beyond the point of sale with its loyalty programs. They have identified and purposed ways to attract a tech savvy clientele while at the same time making the in store experience more efficient using mobile devices alongside its app. The unique approach of having a mobile experience simultaneous with an in-store experience is a huge driver for continued market dominance and future growth.

Potential risks co is exposed to through its strategy;

  • Competition is fierce and Starbucks must be vigilant in order to stay on top. Cheaper alternatives and new competitors offering the same product for less are in direct competition with Starbucks and as such the mobile strategy and rewards program could prove costly to support if any shifts in the global coffee market cause prices to go any higher.

Company Name: Target

In this analysis I had decided to pick three very different companies with innovative or industry leading mobile strategies. Blue Nile is an almost exclusively mobile company. Starbucks is a basically a premium fast food company and finally Target is a huge department store chain. Three very different retailers with one thing in common; strong marketing strategies. Target is an excellent example of a large department store executing an effective mobile campaign.

Target maintains one app across multiple platforms, android, ipad and iphone. It is a mobile web app with a responsive design architecture. Target not only has an app for Smartphones and the iPad, but customers can also sign up for monthly text coupons. Engaging consumers is also helped along by a diverse offering within the app and not just online shopping. Even games are available on the apps. They use text alerts once a month that will link consumers to a web page of coupons that can be used by simply showing the cashier the phone screen. Target will also send any weekly alerts to an email address given by the consumer accessible through mobile.

Target focuses on using social channels as well. Target put quite a bit of effort toward cool and unique Instagram videos and generated massive buzz from that.” Target used social channels to support its “Give with Target” program that invites consumers to vote for a school to help Target allocate $5 million in donations for schools. Facebook, Twitter, Instagram Pinterest, YouTube, Tumblr and Linkedin are used for marketing and social engagement. Target’s mobile strategists are realizing young people especially were more likely to share, tweet or comment on content created by the retail giant.

Social Channel saturation:

Twitter 6 accounts, 939752 followers

@Target-product promotion

@Abullseyeview-promo for each Twitter account

@Targetstyle-new styles, trends and cosmetics

@Targetcareers-hiring, interview and career tips

@Asktarget-customer service, feedback, questions

@Targetdeals-promotion of deals

Facebook-3 accounts/pages,  22,314,716 likes

  • Target-fans engaging and sharing content with Target
  • Targetbaby- a page for families with infants and young children
  • TargetStyle- discussing fashion trends etc

Youtube , 18979 subscribers

  • 3 channels- Target, Target careers, a bullseyeview (videos about brand, commercials, styles etc)

Instagram, 131518 followers

  • 4 accounts

All this creates a large amount of content for social channels.

  • “Additionally, the retailer continued to fine-tune its mobile apps and Web sites while pushing forward its mobile video, location-based, content, advertising and couponing efforts.”
  • “Target is also leveraging Pinterest witha new microsite that merchandises products with the combination of top-pinned items and best reviews on Target.com. Target was one of the first brands to incorporate Pinterest’s new API to create a custom microsite.”
  • “With in-store shoppers increasingly using their mobile devices for assistance, Target updated its iPhone app to improve navigation and make it easier for users to engage with the app from inside one of the retailer’s stores. The move followed the launch of free Wi-Fi in all Target stores in late 2012.”
  • To support the Wi-Fi initiative, Target rolled out in-store signage encouraging shoppers to download the Target iPhone or Android app to help them find what they are looking for.
  • Connecting online to other retailers like Pandora. Cross promotion.
  • Online magazine

Effective? Yes.

Increase in engagement with consumers by using coupon text alerts and apps has driven a positive lift in a very competitive market. Increasing engagement leads to an increase in loyalty amongst customers which is vital in the area of big box retailers.

Potential risks

  • Cyber theft and security breaches.- at the end of the 2013 shopping season there was a data breach that affected some 40 million customers. In fairness this was not a mobile breach per se it doe however put target on high alert for any future breaches mobile or otherwise
  • Negative word of mouth across social channels could spread fast through viral avenues knocking the company off kilter.
  • Shipping or out of stock issues depending on distributors could discourage consumers from using mobile channels.

References

  1. http://investor.bluenile.com/secfiling.cfm?filingID=1091171-14-14#NILE-12292013X10K_HTM_S75C6102C0B321BE25D3B9816B396C075
  2. http://www.voziq.com/social-media-analytics/social-media-dominance-of-blue- nile-an- analysis/
  3. http://mashable.com/2013/12/15/blue-nile-metrics/
  4. http://marketingland.com/coffee-mobile-king-starbucks-serves-mobile-strategy-98823
  5. http://www.adweek.com/news/technology/starbucks-looks-share-its-app-payment-system-other-retailers-159100
  6. http://www.reciprocatellc.com/marketing-strategy/internet-marketing/what-you-can-learn-from-targets-mobile-strategies/
  7. http://www.mobilecommercedaily.com/target%E2%80%99s-social-strategy-stands-out-for-driving-mobile-engagement
  8. http://www.slideshare.net/ZainHaider6/target-power-point-31127384
  9. http://www.mobilecommercedaily.com/target-is-2013-mobile-retailer-of-the-year
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