The Power of Digital Intelligence: How Retailers Can Get Big Results Using ‘Big Data’

Guest Blog by Martin Doettling

We are living in an age of infinite information – a time when data is not just informative, it’s empowering. With recent advancements in the technology used to analyze customer data, retailers have more power than ever to gain insight into shoppers’ intent and behavior. For retailers, the big question regarding Big Data is how to derive the insights that ultimately generate sales.

Traditionally, businesses have had a great deal of success applying data analytics to garner digital intelligence and improve customer insight. At its core, this data helps retailers understand everything from customer demographic segments to shopper purchase preferences. By delving deeper into the data, key trends in customer purchase behavior become apparent. As a result, retailers can make better-informed, more strategic merchandising and digital marketing decisions that not only enhance the online customer experience, but ultimately increase the potential for conversion.

As the e-commerce market continues to expand and Big Data technology continues to advance, the potential and pressure for retailers to capitalize on the power of digital intelligence increases dramatically. In particular, the recent developments in right-time (not just real-time) data collection and reporting are allowing online retailers to become more agile and adaptable than ever.

The latest data technology allows online businesses to gain digital intelligence by viewing how their customers interact with their websites, understanding how they got there, and even the seeing the contents of their shopping carts, all as it happens.

Access to this right-time digital intelligence opens a new realm of possibilities for online retailers to enhance the online customer experience and potential for conversion. They can adjust their digital marketing campaigns the same moment that they launch to optimize the results. Online retailers can also use up-to-the-moment customer data to tailor featured products and website messaging on the fly. This new digital intelligence empowers retailers to engage with their customer as they are browsing their websites to pass along the most relevant promotions and offers.

Knowledge truly is power, and by fostering digital intelligence “as-it-happens,” retailers’ opportunities for driving customer engagement and cementing conversion are limitless.

Martin Doettling is CMO of Webtrends.

Guest Blog by Scott Truitt

One of the biggest challenges that brick and mortar retailers will face in the coming years (and are already beginning to face), is the challenge of competing with online retailers accessible to customers through smart phones.

Despite predictions a decade ago that brick and mortar stores would become obsolete, customers continue and will continue to shop brick and mortar stores.  As much as we want the convenience and value of online shopping we still want to see, touch, and experience products before we buy them and we always will.  We also want the service and expertise of store staff, and we want the tactile connection with a company’s brand.

The challenge for brick and mortar stores over the past decade has been competing with online retailers on price.  That challenge is increasing exponentially with customers’ access to online information and sales channels via their smart phones right from the sales floor.  Smart phone apps are already providing customers with the opportunity to scan products in the store to comparison shop for lower prices available at other stores or through online sources.  So how can brick and mortar retailers compete with online retailers whose operating costs are much, much lower?

The answer lies in a 1947 movie, which you may have just recently watched:  Miracle on 34^th Street.

In the movie, Kris Kringle (aka Santa Claus) “puts the customer ahead of the commercial” by helping Macy’s customers to find exactly what they want, even if it means sending them to another store.  As a result, throngs of customers express their undying gratitude to Macy’s and pledge to become regular Macy’s customers.  Flash forward 65 years, and this becomes the strongest solution to competing with online retailers.  Now, however, instead of being armed with huge books of newspaper ads for other stores, today’s store staff are armed with tablets.

One of the most interesting and dynamic developments in retailing in the past 5 years has been the development and growth of mobile POS systems – allowing store staff to research product availability, stock levels, product details, and even check customers out using mobile tablet devices.  This allows staff to continue to engage customers when they are most interested in connecting with staff, get answers without walking away from customers, and capitalize on the customer’s enthusiasm by processing their sale the moment that they are most excited about the product rather than making them come to the front of the store to check out.

Meanwhile, other customers are avoiding engaging with staff and even slyly checking their smart phones for price comparisons at other stores or online retailers.  This is a two-fold problem:  not only are they shopping elsewhere for the lowest price while standing in your store, but they are avoiding engaging with staff while they do it, denying staff the opportunity to address questions or concerns, or establish value in the in-store experience.

What if store staff went the other way, and offered to use their mobile tablets to comparison shop with the customer or for the customer?  What if they were as transparent as they possibly could be, helping the customer to find lower prices elsewhere using their mobile tablets, giving the customer all of the information that they possibly can not just about what they carry and at what price, but what the customer might find elsewhere?

What if, rather than begrudgingly accepting mobile comparison shopping as an unfortunate reality that brick and mortars are powerless to compete with, staff used that experience as an opportunity to illustrate to customers that, “Yes, it looks like you can save a couple of dollars by driving across town or by ordering it online.  If you buy here, though, our product comes with X Service, Y Return Policy, Z Warranty, we can save you 20% right now by signing you up for our Loyal Customer Program, and you get to take it home now, not later.  Oh, and here’s my card – if you have any questions at any time, you can call me directly and talk to a real human being.”  Imagine what kind of loyal customers that would create…

Admittedly, on the surface this might sound insane – helping your customer to find a lower price at a competing store.  But that’s exactly what the customers in Miracle on 34^th Street thought – and yet their response was to become increasingly loyal to Macy’s for one very important reason:  Trust.

Granted, Miracle on 34^th Street is a work of fiction.  But it has endured for 65 years because it resonates with us – as human beings, and as customers.  We would all like to be treated like the customers in that movie.  And the more we are inundated with shallow and insincere marketing messages, the more we value that kind of respect, understanding, honesty and trust.  And we’re willing to pay more for that.  We’re happy to pay more for that.

Price is just one factor in the value equation, and it can easily be overcome if you establish value elsewhere in the buying experience that is worth paying more for.  So the irony is that by abandoning the old paradigm of not wanting customers to know what they can get elsewhere and instead becoming their partner in the comparison shopping experience, you create a bond of trust that makes them willing and happy to pay more with you because they see the value that you are providing for that little bit of extra money.

We all know that the internet and mobile technology is going to radically change the way retailers engage customers – we just don’t know exactly how yet.  Increased transparency is certainly one answer.  Who’da thunk that that answer would have been right in front of us every holiday season for the past 65 years?

Scott Truitt is a Brand Strategist and Designer specializing in Brand Development and Prototype Retail Store Design.  His clients include national and international companies such as Office Depot, Nike, Costco, and Miller Brewing Company, as well as professional sports teams such as the Seattle Seahawks, Baltimore Ravens, and Pittsburgh Steelers, and regional retailers such as Aries Apparel, The Luxury of Leather, and Picasso Exotic Aquatics.  For more, visit scotttruitt.com

Guest Blog by John Douglas

Ralphs v. UFCW Local 8, decided by the California Supreme Court on December 27, 2012, upholds the constitutionality of two statutes – the “Moscone” Act and California Labor Code 1138.1 – both of which effectively provide trespassers on private property in California with immunity from civil injunctive relief if they are engaged in a labor dispute. These statutes were passed to protect union protestors – and the California Supreme Court’s decision effectively upholds that status quo. The result in this decision is diametrically opposed on the same issue seen in a 2004 decision by the United States Court of Appeal for the District of Columbia (the court that supervises the National Labor Relations Board and is “second in command” only to the United States Supreme Court) in another California case involving Waremart.

The Ralphs case arose in the context of a smallish shopping area and thus is most relevant to retailers operating on a “freestanding” basis or in a strip mall.  On the “plus” side, the California Supreme Court confirmed that such locations are not “public forums” under the California “Pruneyard” decision – an unsurprising result given the reluctance of the California Courts to allow protests outside, for example, small Planned Parenthood locations on private property.

Although California courts will be bound by the California Supreme Court’s views on the Moscone Act and Labor Code 1138.1, the California Supreme Court can no more “overrule” the Court of Appeal in the District of Columbia on a federal constitutional question than the latter court can overrule it.  Thus, in litigation involving the National Labor Relations Board, private retail employers and landowners / lessees in California will still be able to rely on the Waremart decision for protection against liability under federal labor law for calling police to the scene of labor protestors trespassing on their private property.  This is because the National Labor Relations Board on its own has no power to enforce its decisions.  Only the federal courts of appeal have that power – and the United States Court of Appeal for the District of Columbia Circuit has jurisdiction over all federal labor controversies in the private sector – and NLRB orders- wherever they arise in the nation.

In fact, retail employers in California may have some reason to be happy with the decision.  Although she hesitated to find explicitly that retailers in such locations are entitled (as they are under the Pruneyard case when they are a public forum) to set forth reasonable “time place and manner” restrictions on the activities of leafletters and protestors, in a concurring opinion, California Supreme Court Chief Justice  Tani G. Cantil-Sakauye found that unions and their adherents can rely on the Moscone Act privilege only to the extent needed to get their message across.  Activities that interfere unncessarily with the employer / landowners’ business – such as excessive noise-making and excessively large signs – are not protected, in her view, under the Moscone Act.

The bottom line – the decision is really not such a great “victory” for labor.  At most, disaster was averted.  California retailers will need to keep a close eye on the case in the upcoming month or two to see if an appeal is filed to the U.S. Supreme Court – the court that will have the last word.  If the “Supremes” decide to take the case, all bets will be off – and whether the statutes under attack will survive will be a very close call.

John Douglas is a partner in Foley & Lardner’s San Francisco Labor & Employment practice.

Guest Blog By Nick Sprau

The franchising landscape has changed considerably over the past decade, and the result has been a real headache for some franchise owners trying to keep their books straight and current. Traditionally, a franchise owner was an individual entrepreneur who approached the franchisor, seeking to open one or two locations. More recently, however, individual owners have been selling to a master franchisee to gain economies of scale through consolidation. Now, many franchisees who began with a few stores find themselves with dozens or even hundreds of sites to manage across multiple geographic locations.

As master franchises have grown, so have their expenses, as well as the number of staff required to manage invoices. For example, one master franchisee with hundreds of outlets approached our firm for assistance after its UPS costs had risen to more than $1 million dollars a year just to transport invoices from local franchises to the master franchisee’s accounts payable department. At franchise headquarters, 15 to 20 people worked every week to record and code the invoices in a tedious, error-prone and endless effort.

With paper invoices like these—which are received locally to each franchise but paid centrally—the accounting department may be blindsided. Hundreds of bills are likely sitting on the desks of store managers, and accounting has no idea that this significant financial burden is out there. Furthermore, delays inherent in transferring paper from distant franchises mean headquarters has little negotiation power with vendors and often misses the opportunity for discounts granted for on-time payments, while they often sustain penalties for late payments.

Fortunately, technology has provided a solution that is slashing the cost of invoice processing for savvy master franchisees. Even better, the only skills the individual franchise managers require to use this advanced technology are the abilities to scan and email an invoice. This web-based service allows the master franchisee’s accounting department to receive electronic versions of paper invoices with equal ease from franchises located across town or those across the globe. Here’s how it works:

When a local store receives a shipment, the manager places the accompanying invoice in a scanner and emails it to the accounts payable department at headquarters, where the invoice automatically loads into a web-based solution. Now, by logging into a website, the store manager can view the electronic invoice and verify it, enter data, and code and approve it. If any delays occur in this process, the system issues automatic alerts and reminders.

With the online approach, accounts payable knows every invoice that is in the franchise’s system—no more surprises when they arrive at headquarters. The technology can integrate with the master franchise’s ERP system and provide the kind of insights needed to better predict cash flow. And for some companies, the cost of processing an invoice in this centralized fashion has dropped to just a fourth of the original expense.

For master franchisees and their franchises alike, the web is a great equalizer and eliminates many of the challenges inherent with multiple locations in multiple geographies with multiple people responsible for the different stages of the accounts receivable and accounts payable process.

Nick Sprau is VP of sales and marketing at Metafile Information Systems, a paperless ERP solutions provider for accounts payable, accounts receivable and human resources document management and workflow technology.

Guest Blog By Kevin Conway and Mark Smith

The Chinese market is a land of opportunity for online retailers, but reaching those consumers also poses great challenge on the back-end of a website.

Traditionally global e-tailers have had a choice for managing the end-user web experience: Navigate the complexities of hosting their content within China or take gamble on performance by hosting their cloud infrastructure elsewhere in the region.

Either road can be quite an undertaking. Compound the job with the proliferation of evolving cloud technologies, and the choices become downright overwhelming.

Clearly, China’s massive market is one that wants to be reached online. A recent Ipso China study found brand websites influenced the purchasing intent of nearly half of Chinese consumers. For further proof, online retailers only need to look at the web traffic on Nov. 11, when e-commerce sites generated more than $4.6 billion in sales during the country’s Singles Day, a gift-giving event spurring e-commerce demands akin to the U.S. Black Friday.

Realizing they have but just a few seconds to make a connection with consumers, e-tailers funnel resources into ensuring solid web performance that benefits the end-user experience. Yet, in China, dragging Internet speeds and spotty interconnectivity can weigh this experience down.

Latency can also pose a challenge for brands hosting their content in the cloud. Some e-marketers try to work around the latency issues by physically hosting content with China, only to find the task of securing a local-hosting license painstaking.

Launching a well-performing website in in China need not be this complicated. Here’s some advice for online retailers looking to offer the Chinese consumer a satisfying shopping experience.

• Watch your speed. Slow page loads – or no page loads – will drive shoppers anywhere in the world to look elsewhere. Watch your site speed with tools that monitor the networking, application and other variables that can impact web performance.

• Don’t forget the impact of third-party content. The performance of modern Web applications relies on a complex interaction of components that are often not completely assembled until they are in the customer’s browser or device. End-to-end performance visibility helps guard against inadvertent blind spots.

• Look into virtual hosting options. With virtual hosting, content can be cached within China’s borders and distributed as needed through in-country content delivery networks. Savvis, a global leader in enterprise cloud infrastructure, recently launched a virtual hosting service that allows online retailers to reach Chinese consumers by locally caching web content housed in regional data centers.

• Take steps on security. Payment security is a must for meeting your customers’ expectations and maintaining your reputation. Double check with your cloud provider to ensure their data centers meet your rigorous standards and help you comply with industry regulations.

• Go mobile. A recent UN Broadband Commission report found Chinese Internet users will surpass English-speakers by 2015, but for many marketers in China, mobile is the universal language of consumers. Demonstrate you speak that language too by optimizing your sites and apps so they can engage with you, no matter what device they use. See if your cloud provider offers access to partners like Siteminis that can help transform your site to suit the mobile environment.

Undoubtedly, China is a lucrative, bustling market for global retailers looking to grow their base. But reaching that audience with your message can be a challenge.

A wide range of factors, from browser type to network connection, can have an influence on web performance, but online retailers do have options when it comes to using cloud reach the end consumer. Talk to your hosting company or service provider about their options for getting your sites into China – and maintaining performance once you’re in.

Mark Smith is managing director, Asia, and Kevin Conway is global director, consumer brands, both for Savvis, a CenturyLink company.

Guest Blog By David Sisco.

Now that the 2012 holiday shopping season has come to a close, it’s time for retailers to focus on the next phase of the holiday customer experience: returns.

According to the National Retail Federation, consumers are expected to return nearly $63 billion worth of holiday gifts this year – equivalent to nearly a quarter of all the merchandise that is returned to retailers in a typical 12-month period. Some of these returns will happen in store, but thanks to the large growth in e-commerce, many holiday goods will be shipped back to retailers. Many retailers allow consumers to purchase items online and return them in-store as more companies compete in this multichannel world. This changing market illustrates the need for retailers to take a new look at their practices as they head into the new year.

Based on historical data, UPS predicted it would ship more than 520,000 packages back to retailers on January 3 – our busiest day for post-holiday returns in 2013. At UPS, we call it National Returns Day. During the first week in January, we transported more than two million unwanted holiday gifts back to retailers. While National Returns Day has passed, the need to focus on returns is only beginning.

With continued growth in e-commerce, retailers can expect returns volumes to increase as well. Retailers that include a returns label in the package or provide electronic return labels can streamline the process and improve the overall customer experience and opinions consumers have about their brand.

How important are returns?

According to comScore’s 2012 Online Shopping Customer Experience study, commissioned by UPS, there are several factors that drive purchasing behavior: easy returns, estimated or guaranteed delivery dates, and the availability of free/discounted shipping.

From the research, online shoppers rate the returns process among the lowest areas of satisfaction in their online shopping experience and among the top areas in which they want to see improvements.

• 63% look at a retailer’s returns policy before making a purchase
• 48% would shop more often with that retailer if they were to offer a lenient, easy-to-understand returns policy
• More than 60% want a return label in the box or an easy-to-print return label

As a New Year’s resolution – it’s not too early for retailers to re-evaluate their returns policies and procedures.

David Sisco is director of retail and consumer goods marketing at UPS.

Guest Blog By Brian Miller

With profit margins shrinking and overhead costs soaring, retailers are under immense pressure to cut costs. While most business managers look far and wide for new cost saving ideas, too few are looking at indirect categories as a way to cut costs.

According to sourcing data from the past two years, retailers could save hundreds of thousands – if not millions – of dollars by competitively sourcing facility maintenance services like store cleaning, floor care, and snow removal. The problem is that many businesses simply aren’t challenging their suppliers in order to secure the lowest prices.

The results speak for themselves: Businesses that competitively sourced service contracts saved an average of about 22 percent. Even more impressive – nearly every e-auction delivered cost savings.

Looking more closely at the numbers, organizations that competitively sourced lawn care services achieved the highest average percent savings per event – 36.23 percent. The data also shows that floor care, store cleaning, and snow removal services provided buying organizations with significant savings:

• Floor Care: 24.15 percent per event
• Store Cleaning: 27.15 percent per event
• Snow Removal: 15.92 percent per event

Additionally, purchasing execs were able to uncover high cost savings for trash hauling services (7.6 percent) and parking lot maintenance services (15.21 percent).

So why aren’t more businesses challenging their facilities maintenance suppliers for lower prices? Frankly, because many procurement executives are overly confident in the value they derive from their suppliers. The recent report – The Sourcing Confidence Bubble – found that 75 percent of buyers that don’t use e-sourcing feel their suppliers currently give them the best possible value – but market reports tell a different story. Aberdeen, for example, found that companies save an average of 16 percent through e-sourcing techniques.

To maximize value and secure the lowest costs possible, procurement professionals should put pressure on their suppliers by inviting competition, and let facilities maintenance service providers duke it out for their business. By regularly evaluating their service needs – and sourcing seasonal maintenance needs like lawn care and snow removal about six months in advance – retailers can regain the upper hand in negotiations, and unlock thousands of dollars in savings.

Brian Miller is VP of Services for Intesource, which provides enterprise e-sourcing and spend management services and solutions.

I have to admit it – I’ve always thought artificial Christmas trees were stupid. But I’m a man of the 21^st century, and I wondered what kind of environmental impact came about through all that chopping. Well, thank you to Trucost for at least slightly absolving me of whatever guilt I feel for buying a real Christmas tree every year.

According to Trucost research, artificial Christmas trees are six to ten times more environmentally costly than real Christmas trees. But as with all statistics, there is more to the story.

One fact is that most of us real tree people end up purchasing many natural trees over our lifetimes of Christmas revelry. If someone buys an attractive, durable artificial tree, they may use the same tree over many years.

In addition, according to the research, some artificial trees come from highly efficient and better managed production plants that use recycled materials and good practices in emission and waste management. Meanwhile, tree farm operations may include harvesting with helicopters, cold storage and use of other energy consuming equipment, and they may use aggressive pest removal techniques and artificial irrigation practices depending on local weather. The species, geography, farming and cultivation methods, soil type and other variables have to be taken into account.

For me, environmental awareness isn’t enough to sacrifice the joy of picking out a real tree, and occasionally cutting one down myself. So what are our options? Well, there is the re-plantable Christmas tree, purchasing from local suppliers and buying domestic trees that come from a reputable tree farm with environmentally sound practices – these should all be high on the list.

Sorry, fake plastic trees – you’ll never get my love. And now that I know that the methods I can use to purchase my trees can actually make me greener than my know-it-all neighbor and his obsession with artificial crap, I can feel even better about buying a real tree.

8 Things You Need to Know about Mobile in Asia
(An arcane glimpse at the future for everywhere else)

Guest Blog by Claire Mula

This festive quarter, Comscore estimates 13% of all e-commerce transactions will be made via a mobile device in the US, up from 8% in Q4 2011. Globally, AIBI Research expects 1 in every 4 e-commerce dollars will be spent via mobile in five years.

How does this compare with today’s “mobile-first” markets in Asia? What should retailers and brands seeking to engage Asian consumers in the world’s fastest growing economies be aware of when it comes to developing multi-channel strategies for Asian markets?

Here are the 8 facts you should know about mobile internet in Asia Pacific:

1: The present (not future) is mobile in Asia

Asia as a region accounts for over half of the world’s mobile devices. By 2016, Asia Pacific will account for 57.7% of all mobile phone users—nearly ten times the North American share.

2: China is now the largest smartphone market in the world

China, which surpassed the US as the largest smartphone market in the world, represented 22% of global smartphone shipments, while the US (formerly the largest market) accounted for 16%, according to estimates by Canalys.

3: Asians have ‘skipped’ desktop – gone straight to mobile internet

For many populations in markets in Asia, the first time they experience the web will be via a mobile device. In 2012, mobile replaced desktop as the predominant way to access the web in Asia’s most populated markets: China and India.

4: Asia-Pacific has the highest number of mobile payments users in the world

According to Gartner, Asia has the highest number of mobile payment users in the world. This is largely dominated by SMS payment methods born from a need to transfer money via ubiquitous methods across a fragmented payment marketplace. In contrast, in Asia’s most sophisticated mobile service market, Japan, more than 10% of mobile subscribers have used a m-wallet to buy goods and services.

5: Cash is still ‘King’ in Asia

Asia is a two-level mall when it comes to payments, and the region is very fragmented in terms of providers. Markets like India, Indonesia and China are largely “unbanked”- and cash is still king. There is a movement towards mobile as a payment channel for low-transaction value goods and services (<US$10). NFC is an opportunity to make the experience more user-friendly for everyone at a store level.

6: Mobile = “extended shopping hours”

Like their Western counterparts, mobile users in Asia continue shopping after hours. Among Sprooki’s Asian-based retail clients, 15% of purchases occur outside of mall operating hours. During holiday periods such as pre-Christmas, this can be as high as 34% in some markets.

7: Mall Culture a ‘hot-bed’ for location-based marketing

Location-targeted advertising in and around malls can increase response rates of untargeted or demographically targeted ads. Among retailers and malls who use Sprooki’s location-based marketing platform, between 60% and 85% of all shopper purchases or coupon downloads are made within 500 meters radius of the mall or store, in response to a location-targeted message. Around 10%-20% buy via their mobile device from a physical store while in the mall in order to benefit from a discount or value-added offer.

8: There is no common market – but similarities exist

Like Europe, Asia is culturally, economically and socially diverse. A market-by-market approach is best. However, in terms of mobile shopping “readiness”, Asian markets can be grouped based on a few important characteristics:

• Tier 1: “mobile shopping” markets of Singapore, Korea, Japan, Hong Kong and Taiwan, where both smartphone penetration and debit/credit card penetration is upward of 50%. In Singapore and Hong Kong, mobile comprises 23% and 41% of online commerce already.

• Tier 2: markets such as Indonesia, the Philippines, Thailand and Vietnam, where smartphone penetration is below 50% and SMS and cash remain the predominant remittance or payment methods.

• Asia’s largest market, China, experiences 42% smartphone penetration (and growing) -and is one of the world’s largest online commerce economies. China warrants a strategy all to itself.

• India remains very much a feature phone market, with only 4% of total mobile users having smartphones. Irrespective, this still positions India as the fifth largest smartphone market globally – with 44 million internet-enabled mobile users.

Most markets in Asia require a “mobile-first” approach to effectively engage, win and retain local, internet-enabled consumers. For retailers, getting to market quickly and cost effectively across multiple markets at different stages of mobile evolution can be challenging and costly. Partnering with platform providers like Sprooki (www.sprooki.com) who offer customizable solutions, integrated local payment options and insights on how to engage local shoppers – when and where they shop – can help retailers reach their success metrics sooner and without the risk of over-investing.

Claire Mula is Co-founder & Managing Director of Sprooki

Guest Blog by Brendan O’Kane

Could a holiday shopping season in which big retailers stay open around the clock be somewhere in our near future?

It may seem farfetched until we consider that Thanksgiving, once a day when almost all stores were closed and people stayed home with family, is in the process of becoming Black Thursday. Macy’s recently announced that, during the weekend before Christmas, it will stay open for 48 hours straight. It probably won’t be long before other leading large retailers follow suit, hoping for an even bigger slice of the year-end profit pie.

These trends line up perfectly with growing consumer spending during the holidays. During the 2010 and 2011 seasons, even with all the recession-driven belt-tightening, retail sales rose 5.5% and 4.1%, respectively. This year, they’re expected to reach a record $568.1 billion, perhaps a reflection of the fact that, as research from Experian shows, consumer optimism is at an all-time high.

With device-toting consumers already visiting both brick-and-mortar and online stores in record numbers to score the top gifts, gadgets, toys and appliances, retail marketers are scrambling to launch mobile campaigns. By December 31, 2012, they’re expected to have allocated twice as much in their budgets this year as they did last year to connect with holiday shoppers on their ubiquitous “third screens.”

Action Analytics as a Force for Greater Holiday Revenues

However, when it comes to marketing through feature phones, smartphones and tablets, some messaging campaigns aren’t having their intended effect. Why? Too often the messages are irrelevant, ill-timed or excessive – or all three. And an overload of messages that add no value to their lives simply turns most consumers off.

During the holidays and beyond, brands and retailers have the tools to boost engagement with consumers – as well as ROI – by measuring the effectiveness of their messaging.

For example: a top discount retailer with a mobile app is offering 15% off on a new line of tablets. The retailer deploys two versions of the same message to app users who fit the profile of a likely tablet buyer to see which delivers higher value:

1. “Holiday Special 15% off on Mega Tablet 3!”

Message A had a 40% open rate and a 20% coupon click rate. For every 100,000 messages sent, 8,000 coupons were clicked.

1. “Mega Tablet 3 Now 15% Off. Hurry, Deal Ends Soon!”

Message B had 30% open rate and a 30% coupon click rate. For every 100,000 messages sent, 9,000 coupons were clicked.

Message B yields better ROI even though it had a lower open rate, because it had a higher coupon redemption, or conversion rate (9% vs.8%). This type of message analysis, which has been used in print, television and Web campaigns for decades, is known as A/B split testing.

The process doesn’t end there, however. The retailer wants to rework its push notifications to reach particular customer segments, including those who didn’t open the push notification, SMS or mobile email message and those who did open it but failed to click on the coupon.

That’s retargeting. The retailer renews its focus on those consumers by using gathered data to make follow-on messages even more relevant and increase conversions even further. By testing message content for optimal relevance and sending only when the data says it should, the retailer can sidestep the major pitfall for companies marketing on mobile: being perceived as intrusive or spammers.

To Engage Rather than Annoy, Measure, Then Measure Again

Mobile phone spam is such an annoyance to consumers that some companies have elected to skip mobile marketing altogether. I know of one major retailer that has resisted the pressure to market on mobile. An executive told me the company’s fear of having customers see it as a spammer has kept it from taking the plunge. Luckily for this company, it still does a great business.

However, not all marketers can say that. In less than two years, mobile is expected to overtake desktop as the primary Internet access point for most consumers and to channel over half of all online revenues.

Regular measurement of mobile messaging can help brands and retailers gain actionable business intelligence by taking the pulse of their audiences. That information can be used to design thoughtful, intelligent and timely push, SMS and mobile email campaigns.

This also applies to all other times of year when retail shopping spikes, such as Mother’s Day and the late-summer “back to school” sales blitz.

The slow recovery isn’t slowing down determined mobile consumers looking for great deals. Through action analytics, retailers can find the right moment and the right messaging to drive higher ROI and customer engagement no matter what holiday it is.

Brendan O’Kane is CEO of OtherLevels, which helps mobile game developers, brands and publishers using Push Notification, SMS and Mobile Email Messaging engage, retain and maximize the value of their audiences through mobile messaging analytics and retargeting.