Like reality, but better: The latest innovation in mobile marketing

Throughout the month of February, SNEWS will recap its coverage of Outdoor Retailer Winter Market 2012 with select stories from the O.R. Daily we published at the show Jan. 19-22. It’s an opportunity for you to catch up on stories you might have missed in O.R.D., and for us to update and upload the articles to our searchable archives.

Before mobile phones, appointment scheduling was done once. And it was done right. No text messages blaming tardiness on aisle encounters, no emails pleading for patience, no frantic on-floor calls asking for directions from the 27000 sign at Outdoor Retailer. And definitely no app with a detailed map of the show floor.

Now, imagine holding up your phone and being guided aisle-by-aisle to your next appointment — with the same screen displaying the names of your contacts as you walk by each booth, which new boots or sweaters a company is debuting and what’s on tap at that afternoon’s happy hour. Once in a meeting, you’ll use your mobile device to scan the products to read reviews, sign a contract and process a payment. Always on alert, of course, you do a quick electronic scan of the booth next door with your phone, too, to see if it has better beer slated for happy hour.

Welcome to the future of mobile in the outdoor world. You think QR codes are the coming thing? Hey grandpa, think again. The above scenario would be thanks to still-futuristic Augmented Reality.

When Kenji Haroutunian, Outdoor Retailer show director, first started directing the events in 2007, mobile communications still included fax machines. Today, he puts QR codes in B2B magazines so people can register for the show through their phones. But that’s only the edge of the horizon. Mobile has come a long way in a very short time, and the trend is only going to continue at a faster pace, at least according to SBI Mobile Analyst in Emerging Technologies Mark Beccue.

“We’re at roughly 40 percent smartphone adoption now, but that’s going nowhere but up,” Beccue said. “We might even hit 80 percent in the next couple years, and it’ll become even more of an issue for retailers.” 

An issue? Yes, because consumers are walking into stores to touch and feel, then searching for better deals with their phones. According to Beccue, it was during the holiday season of 2009 that shoppers started sharpening their mobile shopping skills. But mobile price comparisons were just the dawn of a new day: The question now will be how retailers and brands will engage consumers through those devices to prevent losing sales or, even better, win new customers who aren’t in the store but on their couches or just walking down the street. Or, in the case of Outdoor Retailer markets, how manufacturers will snag or inform a retail buyer cruising down the aisle more interested in free java than the newest colorway.

QR vs. AR vs. RFID

QR certainly still dominates today’s mobile marketing mix. According to a SNEWS/O.R.D. email survey sent in December 2011 to 550 marketing decision makers at brands in the outdoor industry, nearly two-thirds of respondents are using QR, or “quick response,” codes. Just over a quarter of respondents said their companies had used mobile ads, mobile apps, Short Messaging Service (SMS, a.k.a. text messages), Augmented Reality (AR) and Near Field Communication (NFC). The same number, however, or just over a quarter of respondents, said they had no current mobile marketing in place. When asked whether mobile ads, SMS, AR and NFC had ever been considered as a channel for mobile marketing, slightly fewer than two-thirds of respondents said “no.” While technologies like AR and NFC are in infantile stages, QR is growing at a triple-digit annual rate in most industries — and the outdoor industry and its bi-annual markets are no exception.

“We’ll see four or five times growth for at least the next few years,” said David Javitch, vice president of marketing for Scanbuy, the company that owns the Scanlife QR scanning app. According to Javitch, there are several drivers of skyrocketing QR scanning activity. QR code adoption has given brands exposure to mass retail markets. Plus, these days, many smartphones — nearly the go-to for mobile communication — are preloaded with QR scanning apps. For marketers, QRs allow them to tap into consumers’ desires for more information while simultaneously adding strong calls to action. Athena Polydorou, director of the CTIA Wireless Association, may have pinpointed the most important driver of QR and, for that matter, any type of growth in mobile technology: more savvy consumers.

“People are starting to get it,” said Polydorou, adding that consumers appreciate the immediate benefits. Those include product reviews from previous consumers, reviews from blogs, videos that detail technical aspects of products, coupons and discounts, sweepstakes, registrations and anything else that benefits the shopper. When consumers experiment with mobile technologies, they need to see value to justify a download, scan or any call to action that requires them to risk convenience. Without a clear benefit (such as where the best happy hour beer is at Winter Market), calls to action are seen as gimmicky. To make things even more difficult, brands marketers need to see real ROI to determine feasibility. These will pose the two greatest challenges for the adoption of any new mobile marketing channel.

Perhaps gimmicky, albeit “wildly successful” for branding, was an image-recognition AR app called X-Ray developed by a team of developers at outdoor retailer and etailer Moosejaw. No wonder: X-Ray allows users to hold their phones over models in MooseJaw’s winter 2011/12 catalog so they can see the models in their underwear. No, not naked, but nearly. The app took six to eight weeks to develop and development costs were similar to that any other type of mobile app, said Moosejaw Creative Director Greg Wohlfeill. Showing off near-naked models in a winter catalog may offer entertainment value, but delivering an AR product that returns business value for both consumers and marketers, as well as retailers and businesses, will prove to be an interesting task.

Google might leap the technology further with reports that the company will debut AR glasses by the end of the year, allowing users to get infromation displayed on the lenses about objects and people just by looking at them.

A look ahead

The fact that AR (whether app-based or browser-based) requires upfront development costs means marketers will closely scrutinize ROI on any AR investments — leaving it a little farther down the road than low-hanging QR. For example, RFID (far field) can be tested at roughly five cents per chip, and QR codes can be implemented at the price of ink.

So outdoor brands have been piling onto the QR train at increasing rates. 

“It was a no brainer. We could do it so quickly and the investment was so minimal that we kicked it off with a soft launch in the third quarter,” said Jen Taylor, marketing manager for Mountain Khakis. “It was literally an email going around the office about putting QR on our hangtags and maybe two days later, it was done.” Most brands are on the same wavelength, but many have not necessarily taken the step to make QR more worthwhile. The codes now often just lead consumers to a YouTube video or a brand’s own websites rather than to specific information or a microsite. But that allows brand to test the efficacy with low cost.

While RFID and AR require significantly more investment than QR, Javitch said he expected to see more companies experimenting with them in 2012, with possibly some major adoption as early as 2013.

However, RFID, particularly NFC, will depend on phone manufacturers. Javitch pointed out that because the iPhone 4S is not NFC capable, adoption will be slowed by at least another 18 months. AR, on the other hand, will depend on faster phones that can process higher quantities of data in real time. More importantly, each technology will be in demand for different uses, and it is up to marketers and brands to figure out which contexts make the most sense to their users.

Down the road we may see interactive show floor maps using AR technology, but today the cost is prohibitive. For now, QR codes remain the channel of choice for retail while mobile technologies continue to mature. But that doesn’t mean we can’t dream of scanning booths to find cool schwag or the best beer.

–Yoon Kim with contributions by Therese Iknoian