The Forrester Blog For Consumer Product Strategy Professionals

Mobile Gift Cards from Target Corporation

Julie Ask — Wed, 10 Feb 2010 00:07:10 -0500

by Julie Ask

Target is now allowing gift cards to be loaded onto an online account that can be accessed from your cell phone. You can actually pay for stuff with your cell phone. Yay! See Target's press release.

I know they aren't the first. Many versions I've seen before, however, have been small scale pilots or in foreign countries. Many scenarios I've seen also are "closed" pilots among the 3-4 parties in an ecosystem that it took to string a trial together. Target has 1740 stores ... there's a bit of scale in this solution.

So, how does it work?

First, you buy a gift card. I bought the one with the cute Target dog.

Then you pull the sticker off of the back so you can see the codes. I purchased a $20 gift card.

Instructions for using mobile gift cards as well as promotions are on Target.com. Using their available media - Web site - to promote the new offer? Well done.

Interestingly though, this site ONLY had instructions for the mobile gift cards. I couldn't find a link on this site to regisiter my mobile gift card. This confusion for me is probably the only thing I could find to "ding" them on, so to speak. I'd expect that one of their next rounds of Web site updates would add this link.

I did find the link on their mobile Web site.

Clicked on "GiftCards" and I was led through a series of steps to sign up for a Target account, name my gift card and register my gift card. One of the portions of the UI that I liked was the pop-up numeric keypad for when I wanted to add my phone number, card number, PIN, etc. Well done.

I immediately received an SMS confirming that my GiftCard had been registered.

The SMS also contained a link (URL) to a mobile Web page with a bar code to be used at POS. For today, I think this is probably one of the better ways to save a URL. I send 20-30 text messages a day so this message could easily get lost in my list of messages if I don't delete them or engage in dialogue with Target frequently. Hopefully, some day we have SMS folders or a means of sorting these messages. What I liked is that the short code "TARGET" also had the name in the heading.

(Ok, and no one use my URL ... PIN passcode protected, but please don't hack it)

Then I picked up a soda and walked up to a cashier with only one person in line. I didn't intentionally look for a young person or anyone else I thought might be more likely to understand cell phones. I also didn't intentionally tee up the barcode - I wasn't ready at all when my total was rung up. Once I heard my total, I turned on my cell phone, entered my password, clicked on my SMS, found/opened my Target SMS, clicked on the link, entered my PIN ... a barcode appeared. The cashier used her optical scanner to scan/image the image quickly and I was on my way with a receipt. So, I don't think it took me a minute, but did it take 30 seconds or so? Yes. Cashier was patient. Having a lot of people in line fumbling around with their phones on a busy day might frustrate some - kind of the way you feel when you're in a hurry and you see that the person in front of you is going to use a check to pay that needs 2 forms of ID.

Overall, it was a really good experience. I cleaned out a desk drawer over the weekend and found about $80 in gift cards. I'm really wishing they were saved on my cell phone. I really like the idea of the cell phone for coupons, loyalty cards, gift cards, etc. When the cell phone is more convenient than the existing alternatives, consumers will adopt mobile. I wish Starbuck's cards were scannable on my cell phone. I can see my total prepaid account value within my Starbucks application, but I don't think I can pay with it.

This was one of the first experiences I had with a mobile payment where I thought to myself, "I can see myself using this and choosing it over carrying another card in my wallet."

Prospects for 2D, QR and Other Proprietary Codes?

Julie Ask — Tue, 02 Feb 2010 21:12:14 -0500

by Julie Ask

Pay attention. This is an example that seems great in theory, but the "devil is in the details" of the implementation so to speak. This is among the top inquiries I hear from clients, "what do you think about 2D barcodes or QR codes as a means of connecting with customers?" I took this inquiry from a CPG client just a couple of weeks ago. I laid out the challenges. Their response was, "well, we're doing it anyway." Piloting is good - just go into it with your eyes wide open.

If you are a vendor with a solution for 2D, QR or other proprietary solutions, please let me know - I'll be doing some research on the options in the next month or so.

The more complicated - the more steps in the process, the more drop-off's you'll have as you try to pull your audience through the process. Using 2D bar codes or other symbols that require the user to take a photo and do something with it is still a scenario that is not well understood by consumers. It's not that it won't be, but if you are going to use these tactics, be prepared to invest in consumer education.

Here's an example from Sports Illustrated with Jagtag

This is an ad for their upcoming Swimsuit Edition 2010 is in their January issues.

So far so good as I'm assuming this is eye-catching to many Sports Illustrated readers.

Here's the instructions in the top right corner:

The text reads as follows:

"WAS IT ONLY FOUR YEARS AGO THAT BROOKLYN DECKER WAS A ROOKIE? TO SEE THIS YEAR'S "ROOKIES," TAKE AND SEND A PICTURE OF THE JAGTAG ABOVE. VERIZON, AT&T, AND ALLTEL CUSTOMERS TEXT PICTURE TO 524824. ALL OTHERS TEXT OR EMAIL PICTURE TO SWIMSUIT@JAGTAG.COM."

The instructions need to be very clear. "Text a picture." ???

Campaigns should work across all networks. That it doesn't isn't necessarily the fault of JagTag or Sports Illustrated. It highlights the issues though with handset fragmentation and the varying features that phones have. Carriers also play a role here adding another layer to the fragmentation issues. They do bypass this hurdle with the somewhat clumsy experience of emailing the photo directly. Not clear what you do if your cell phone does not have a camera.

I sent the photo using MMS to the short code. First attempt - message failure. Second attempt? Nothing happened - at least not in the first 20 minutes after I sent the photo. I also emailed it. In less than 60 seconds, I had an email from "swimsuit" with a vertical collage of women wearing bikinis. I imagine that some version of this should have happened on my cell phone - perhaps providing wall paper or a link to some photos.

I am not picking on JagTag - their last campaign with SI performed well according to the the information they sent me. And, if we're going to teach consumers how "to do this," we'll need to start with small campaigns and learn from mistakes. Sounds cliche' but you need to start somewhere. I'm mostly saying, "be realistic with your expectations and understand the challenges."

From JagTag:

You might have seen that MediaWeek broke the news last weekend that JAGTAG will be activating Sports Illustrated's upcoming Swimsuit Edition, the biggest print media event in 2010.

We're delighted to provide Sports Illustrated the only 2D barcode solution that actually works for the majority of their consumers (85% of all mobile phones work instantly with no download, special sign up or Internet access required by the consumer). Interestingly, in our successful beta with SI's Swimsuit Vault this summer, SI readers engaging JAGTAG closely mirrored the mobile market. 22% of consumers participated via smartphone and 78% participated via standard phone, taking advantage of JAGTAG's unique capability to reach all phones with a camera.

Apple's iPad - A Day in the Life of a New Product Launch

Julie Ask — Wed, 27 Jan 2010 17:02:04 -0500

by Julie Ask

I've just returned from Apple's launch of the new iPad. Am exhausted from the anticipation and the intensity of the event. For a full analysis of the iPad, please check out the blog posts from my colleagues James McQuivey and Charles Golvin. See yesterday's blog. They were really dead on with their comments. I'm sure they'll post more today.

I was there so I got to touch the big iPod Touch-esque iPad. Curved edges. Not too heavy. Great video resolution - if there is HD video. (Watching full screen low resolution YouTube clips posted by European soccer fans - average). Baseball isn't my thing, but the MLB app with integrated video - looked sweet.

- Browsing - good.

- Photos - I like taking photos and I like slide shows so this was one of my favorite features - the iLife-esque photo slidesshows with music. For me as a photographer, this would be more about showing photos than creating the slide shows on the device - fun way to share with friends. Apple - if you're listening - next on my wishlist is iLife photo editing on one of these devices. I want to travel with this device, transfer photos from my fat Nikon to this, delete, edit and then sync back to my computer at home so I can then sync to my Apple TV ... could you see a mini-iLife for $9.99 for this device please?

I have two other use cases for new portable multi-media devices: Facebook and Scrabble. Facebook experience? Ok, but there is potential. No camera so I'm not creating on this device - more consuming and reacting to posts of friends. Scrabble? This was cool. I LOVE Scrabble on the iPhone even better than the original board game. I can absolutely imagine playing head to head with friends and passing this around on a plane or even at home. A little small to be a table-top game board, but it has potential for more than racing and shooter games targeted at men.

Typing? Apple taught me to type on a touchscreen. My hands were a bit small for the portrait format. I could see posting small things - like Facebook updates. I'd have to move to the keyboard probably to create a document. {They wrapped text around a giraffe's neck in a document ... this was impresssive to me for some reason.)

Here's a few photos under the "Day in the Life" theme -

This is my bengal Beckham before the event. He's hoping the new tablet will have a larger form factor than the mini and be even warmer when plugged in. Hard to squeeze his 14 lb body on to either the Mac Mini or Apple TV - he wants something bigger.

This is the line to get in before the doors open - I've been to rock concerts where I felt safer. Happy not to be small on this day. I had to leverage all of the body checking skills I learned with years of playing ice hockey to both get in the door and get a seat. Even Gavin Newsom - our mayor - got a worse seat. No favorites from Apple. Guy behind me in line to demo was President of a multi-billion dollar media company.

This is inside Yerba Buena. Steve is sitting in the chair. Gives the impression that this is a device one would use at home. Will be interesting to see the advertising that Apple eventually does - how and where they show people using the device. You can also see the "glow" of laptop screens everywhere. A wireless connection? Oh my gosh ... press fighting over the limited bits of bandwidth. No amount of bandwidth could have satisfied the appetite of this crowd. From my perspective, AT&T held up today ... I tweeted with no problem.

These guys (below) brought their own bandwidth - good idea.

This is obviously Steve Jobs. Walt Mossberg has his back to me. Walt had been standing, but then he sat on the table to see how well he could type with the device in his lap. We happened to be demo'ing iPads near one another when suddenly camera flashes started going and someone stepped on my foot. I looked up to see the one and only Steve Jobs not a meter away from me. (As a one time EE, this is one of the reasons I live in the Bay Area as do my techie friends ... to be at the "center of it" so to speak. He's one of our idols and to see him up close and in person ....) Walt was asking questions I wouldn't dare ask ... maybe when I'm Walt's age and have his following, I will have more courage.

The conversation? I'll paraphrase ... this is not the actual dialogue.

Walt: "Steve, you're looking good."

Steve: "Thank you. And thank you for coming."

(I'm trying to get Walt MossPuppet images out of my head - damn you CG)

Walt: "So, Steve, like what is up with this name, 'iPad'?"

Steve: "It goes with the series of devices." More dialogue here and then basically, "Can you spell 'iPod'?" I'm thinking, "yeah, he's got a point." Steve and Apple can create a category, create a name, create demand - doesn't matter what it is called.

Walt: "So, tell me why I am discarding a perfectly good Kindle whereby the connectivity is bundled with the content for this more expensive device ... and by the way, how much do the books cost because you didn't say?"

Steve: "First, you can read this in the dark." I thought, good point. re Pricing ... Steve didn't say, but he's shown in the past he can deliver the volume it takes to get good pricing. I'm not worried, but will leave that analysis to my colleague James McQuivey. See his latest post.

SMS Donations

Julie Ask — Wed, 20 Jan 2010 14:28:26 -0500

by Julie Ask

I've been fielding quite a few requests about why donations via text messaging have done so well and why donations to Haiti via SMS have set new all time high's. I am in Cambridge, MA this week. I was walking around Central Square yesterday evening, and I noticed how many promotions there are for donating via SMS. I was surprised.

Why is it doing so well?

Adoption of SMS is high as is usage = people are comfortable with the technology
$10 - not an insignificant amount of money, but affordable to many
Consumer awareness is high ... each year there are more and more marketing campaigns and promotions incuding those to donate money. The more there are and the more consumers see them, the more aware they are - we've seen them encourage people to donate on the Today Show, Michelle Obama has asked, etc. - non-mobile promotions
Trusted source - people have known the Red Cross forever and it is a trusted organization as are those (e.g., Verizon) facilitating the donations
IT'S CONVENIENT! I think this is probably the most important reason. I don't have to remember a phone number or an address. I don't need to remember to write a check, find and envelope, find a stamp, etc. I can donate while standing in line or waiting for the bus ... it's EASY!

I was in Toscanini's ice cream last night and they had floating Tweets on a screen with standing instructions for how one could donate via SMS.

And walking past the bus stop this morning ... this one for breast cancer

Mobile Services: How to calculate the ROI and justify the budget you need

Julie Ask — Mon, 11 Jan 2010 17:47:09 -0500

Julie Ask

Few consumer-facing product and service companies AREN'T working on their mobile strategy today. Everyone is thinking about how best to engage with their customers on their cell phones. And, can you even do NEW customer acquisition with teenagers or young adults without a mobile option?

Many mobile initiatives start without a plan or a strategy. They start with:

"Our CMO was observing his teenage daughter use her cell phone ...."

"Our competitors have an iPhone application. My boss told me to get one for us."

It's not ideal to start a mobile strategy this way. Not such a bad way to begin the thought process at least. Once companies get started developing a mobile strategy (and we hope they use POST), they soon begin to realize how much it could cost. Then they start asking questions like this,

"Is it even worth it given that only x% of our customer base is using mobile banking/travel/(fill in)?"

"Is anyone buying anything on their cell phone."

"We didn't budget for mobile for this year."

First, for many consumer brands, products or services, they can't afford NOT to be doing anything in mobile. That would be analogous to no Web presence in circa 1999. Secondly, consumers ARE making purchases on their cell phones. (See my 2010 predictions) Some companies are aready doing tens of thousands each day. Mobile will INFLUENCE many more purchases offline and online as well.

Revenue is just one benefit of mobile. Other benefits include cost savings as well as all of the benefits (e.g., increased customer satisfaction) derived from providing consumers with better or more convenient experiences. The "R" in the ROI of mobile will likely have many additive streams over time that sum up to one larger "R."

On the flip side, there are many costs - software, message delivery, development, marketing, employee training, etc.

In order to get budget, your mobile objectives must roll up into someone's business objectives. (See the "O" of Mobile POST). More and more of our clients are being asked how mobile will impact the bottom line.

The ROI calculation of mobile may seem straightforward for those who have done calculations for IT investments or spend before. Unlike internal projects/products/services used by your employees, however, you can't dictate that your consumers will use your mobile service. They won't use it unless mobile is more convenient (see framework for convenient mobile services) and better than other means of achieving their end goal. This is one of the most difficult elements of the analysis - forecasting consumer adoption and usage. Much of what you see in the press is consumer adoption - "55% of all adults use SMS." Yes, but is my mother who uses SMS once a month really going to use SMS for mobile banking? Probably not. Setting expectations around consumer adoption and usage of your service will lie more so in usage behavior than adoption. How fast will they adopt or increase usage? Many factors ranging from how much you spend on marketing to how well you design the service.

We outline the process for calculating the ROI of your mobile services here in this new report. It walks through identifying and quantifying both the benefits and the cost elements one by one.

What warrants an SMS alert?

Julie Ask — Sun, 10 Jan 2010 17:01:32 -0500

by Julie Ask

I get this question a lot from clients. I think it is a hard question to answer and will differ by person. I think I'm going to start a list of what does and what doesn't. Media companies and advertisers like to use SMS to cut through the clutter of Email inboxes and ensure the message is delivered "now."

If I were a student at Virginia Tech a couple of years ago, I would have wanted an SMS that there was danger on campus. If the police were on a manhunt in my neighborhood (this happened about two years ago), I'd want to know now - due to my location. There is real value in having this information AS SOON AS it is available.

Here are a few that I have received that I don't want:

Last August, the AP sent me an alert stating that Tim Tebow the quarterback at the University of Florida was the pre-season coaches pick as top quarterback. I'm a middle-aged female living in San Francisco. Why would I care? What is the value of having that information NOW?

Here's another category. Sports scores. Who watches live sports? Thursday night after work - and on the west coast this means most sports events are a couple of hours underway - I'm watching the BCS championship game on my TV (and DVR). So, maybe in the third quarter, my phone dings. I thought, "that must me the score." Now I can't use my phone until this game is over. Granted, once Colt was injured, Texas winning seemed pretty impossible. Still - WHY send out sports scores? Why is it urgent? and a lot of us are watching delayed.

Why did Apple buy Quattro Wireless?

Julie Ask — Tue, 05 Jan 2010 15:14:15 -0500

by Julie Ask

Apple isn't saying. Quattro posted a blog that told their current customers not to worry - normal business operations would continue. So, I am speculating a bit.

The first questions I've fielded are, "Does Apple want to go head to head with Google?" or "Does Apple want to sell advertising?" At a high level, I believe businesses stick close to their core competencies. Apple sells hardware, software and some content. Google sells advertising. Well, mostly. There are about 4 billion cell phones worldwide and about 1 billion PC's. New Internet connects (and page views and advertising growth) will come from mobile. Mobile is high growth. PC's are a bit commoditized. My cell phone costs more than my last netbook or notebook purchase. Go figure.

Our mobile marketing foreast for the US shows revenue growing from $391M in 2009 to $1.3B in 2014 provided there aren't any game changers. Game changers? Anything that would dramatically impact the amount of inventory or the value of it. The Apple iPhone, for example, dramatically altered the number of page views or inventory in mobile. The Android phones are helping as well and gaining momentum. These numbers are US-only - growth in mobile globally has been dramatic as well and will continue to be. In the US alone (see my colleague Charlie Golvin's blog) smartphone adoption grew from 11% at the end of 2008 to 17% at the end of 2009. This is significant because a lot more browsing and application downloads happen on these phones than more basic ones. A cut of this revenue would add some to Apple's bottom line, but very small at least in the next few years.

My running hypothesis? Attractiveness of their platform. There are many phenomenal elements of the iPhone, Android, Blackberry, Palm, Symbian, and Windows platforms. What consumers LOVE among other features are the applications. Each of these platforms has to offer an attractive environment to developers. Apple just announced 3 billion downloads. Part of the reason they got there was great selection/applications. Many of these were likely free downloads. Long term, developers need a path to profitability. They can share revenue with Apple by selling applications in iTunes. They can offer free downloads and then upsell customers later on better versions of their applications. Advertising offers another revenue opportunity. To date, this has been in the hands of third parties - most notably Admob which was just purchased by Google pending FTC approval.

I can list a few reasons to bring or integrate ad targeting and serving capabilities into the handset. Could provide a more clear opportunity for developers to generate revenue from their applications. Up until now, various third parties would have competed to have their code included. Deeper integration with the handset could provide better analytics and targeting (location, browsing behavior, purchase behavior) capabilities (= higher value inventory) going forward. It could be a defensive move - if Apple has no play and the Admob acquisition goes forward, Google is the primary beneficiary of ad revenue generated from Apple's platform - of which we know there is a lot. They are often ranked the top platform for mobile Web browsing.

We won't know for sure until both parties talk about the deal. These are just a few ideas.

I don't think this is the last announcement we'll have this month from a handset OEM claiming they have a solution to help advertisers, merchants, application developers, media companies, etc. do better targeting -

Intersection of Social & Mobile - Google's Local Places

Julie Ask — Sun, 13 Dec 2009 20:45:38 -0500

by Julie Ask

I give my colleague Charles Golvin credit for finding this article on the official Google blog. I'll be working on a report on the intersection of social and mobile in early 2010 so please send me more examples if you have some. I'm especially interested in the role of social/mobile in the Retail environment.

Google is mailing out storefront window stickers to 100,000 local businesses in the US. (see their blog post for complete information). If you have the right type of phone and supporting software, you can take a photo of the code on the sticker (see below) and you'll be taken to that business' PlacePage on the Web. The service will show available coupons, allow for ratings, get reviews, etc.

Here is their post on the applications that work with the service:

To scan the codes, you'll need a phone with a camera and an app that can read QR codes. For Android-powered devices, including the Droid by Motorola, we recommend using the free Barcode Scanner app. For iPhone, we have found the $1.99 QuickMark app to work best, and starting today, we're partnering with QuickMark to offer the app for free for the first 40,000 downloads. For other devices, we recommend searching for "QR reader" in your app marketplace, if it has one, or searching for the model of your phone and [qr reader] on Google.BeeTagg and NeoReader are two other apps that we've found to work well with the decals.

The more entities using these codes and teaching consumers how to pull information about a local place or tourist attraction from the Web on their phones, the faster consumer awareness and adoption will grow.

Here's a copy of the sticker from the same blog site:

When do you opt for your cell phone rather than your computer?

Julie Ask — Fri, 16 Oct 2009 00:05:28 -0400

by Julie Ask

My answer to this question was, "never" until a couple of years ago. Sure, I was more likely to make a phone call on my cell phone than on my computer, but that is to be expected - it has traditionally been designed to be a voice communication device.

Opting for my cell phone rather than my laptop first started for me a couple of years ago. I began using SMS as a substitute for email. Then I started using email on my Blackberry because it would boot faster than my computer. Next came Google SMS - for me it was soooo much faster to get a phone number for a business through Google's SMS service than to call (ok, which costs money) or look online. Then, I got an iPhone and started downloading all kinds of applications. Some I barely use, but .... there are quite a few that I use rather than comparable experiences on the PC. These include Facebook (I'm more likely to be doing something interesting when I'm out and about), Scrabble (tallies the score for you), and maps (stopped printing all those maps out) among others.

For all of these services whereby I opt for my phone rather than my PC, I do so because the experience on the cell phone is more convenient. That means the benefits outweigh the inhibitors to use. When it comes to mobile services, there is convenience when there is value to the immediacy of the information or service, tasks are simple to execute and there is context - like my location.

We lay out this framework in our newly released report, "The Convenience Quotient of Mobile Services: A Facebook Case Study."

Wireless Net Neutrality ... Does it Make Any Sense?

Julie Ask — Mon, 21 Sep 2009 00:55:52 -0400

US as Traffic Cop in Web Fight (see WSJ article)

(by Julie Ask)

Ok, so there is a bit of wait and see until Monday when the FCC Chairman makes the anticipated announcement, but here's a first take:

Who, I ask, is on the side of the consumer? This WSJ article discusses how Obama is taking the side of Silicon Valley. Republicans seem to be taking the side of the carriers. WHO is on my side as a consumer?

Most consumers are NOT demanding the ability to stream unlimited video to their cell phones. In fact, very few are even looking for video capability in their next handset purchase. If you are a Forrester client, come ask me/us for the data - we can show you. Consumers are more interested in their battery lasting all day than streaming video ... which will kill it.

What consumers WANT from their wireless service providers is high quality, reliable voice services. Really, it is. We ask consumers year in and year out what it is they want in a wireless service provider. Quality of service and value always come out on top.

The carriers ... they've raised money in the stock and bond markets based on the assumption that they could generate revenue from selling wireless services - voice, SMS, data, etc. Why should Skype be able to undermine their ability to sell voice services? Why? The wireless service providers have taken all of the risks - they've raised the capital, they've built the networks, they carry the cost of customer service, etc. Wireless VoIP likely makes sense for some international calling given the roaming fees .... doesn't mean it has to happen on my cell phone over a non-Wi-Fi wireless network. There are probably more consumers who are shareholders in these companie with expectations of strong returns than consumers wanting wireless VoIP ... which by the way doesn't have consistently high QoS.

So, streaming video and other bandwidth hogging applications. Let me say it again ... quality of VOICE service. I DON'T WANT to be on a wireless network with a bunch of people trying to stream video. This is for the same reasons I don't count on using Wi-Fi in a Starbuck's or Panera Bread shop - I don't want to be on a congested network with QoS issues. Sometimes it's great, but you never know. It doesn't take many consumers streaming video within a cellular network to use up a lot of capacity, create congestion, and compromise the quality of the experience for the rest of us.

Wireless services providers can't simply flip switches and keep dialing up the capacity. There are backhaul issues from the towers. There are laws of physics. I live in SF. I tried to Tweet from my iPhone at an Apple event just a couple of weeks ago - even that was frustrating given how many of us are on the AT&T network with iPhones out here - and that's with rules. You want to download a movie or fat file? Guess what, do it over Wi-Fi or your landline.

Video can be a good service on cell phones. MediaFLO has invested hundreds of millions in a broadcast network. There is Wi-Fi ... how many places does one go these days where there is no Wi-Fi network available? Don't get me wrong - I like watching movies and TV shows on my iPhone. I live watching YouTube clips. That said, the wireless network is a bit of a shared resource. My interest in watching YouTube shouldn't trump the ability of paying consumers' ability to make phone calls. The carriers have a right to generate returns on their investment.

Yes, they could raise prices on data services .... but to what point? AT&T and Verizon each have upwards of 70 million or so customers. It's not clear to me that either one wants to hand over 35 to 40 million of them to Sprint and T-Mobile even if ARPU doubles.

Let's see what the FCC says on Monday ...