December 28, 2010, 2:58 PM

Mobile commerce insights from my 3-year-old nephew

One toddler presents a powerful case for text messaging.

The epiphany occurred just a few days ago. It was Christmas and the family had gathered for the annual gift-opening chaos. My 3-year-old nephew Gabe opened the inaugural gift to kick off the festivities. Gabe got a toy phone—appropriate as he has a lovely habit of playing with my sister’s phone and accidently calling people, (including my sister’s boss, apparently No. 5 on speed dial).

Gabe, as expected, immediately began playing with the phone. Not a surprise. But as I watched him fidget, one thing struck me. Gabe didn’t really get “talking” on the phone. Even a ‘ring ring’ noise didn’t make him hold the handset up to his ear and conduct his toddler babble. He flat out didn’t use the phone to talk. He just pressed the buttons incessantly.

Now, I fully admit I may be reading way too much into the actions of a toddler with a toy, but my hunch is this: Gabe mainly witnesses texting, not talking, on a phone. My sister and her husband actually rarely use their phones to talk. Instead, they text and text, and text. They have ditched their landline, and as we sat around pondering Gabe’s actions, my sister mentioned that she recently downgraded her husband’s wireless plan to the lowest possible minutes because he never comes close to his limit.

But, what did she keep? Unlimited texting.

The takeaway for retailers: Don’t underestimate the power of the text, whether it be a short code shoppers can use to make a purchase or a text-based marketing campaign. Retailers, I believe, should strongly consider adding text messaging to their mobile strategy.

31% of mobile phone owners carried smartphones in Q3, according to web and mobile web measurement firm The Nielsen Co., up from 19% from the third quarter of 2009. Meanwhile, 69% had conventional mobile phones, down from 81% in Q3 of 2009. While mobile web use and mobile commerce is poised for growth as smartphone adoption rates increase—as of today, retailers with m-commerce sites or apps are still missing out on reaching 69% of mobile phone owners. Granted some conventional phones allow for web browsing—but shopping is rare on such phones as browsers are typically painfully slow and those phones were not designed with shopping in mind. However, both smartphones and conventional phones can send and receive texts.

Another argument for text: U.S. consumers love to text and that means they are familiar with the technology. A recent study from web and mobile web measurement firm comScore Inc. finds 66.8% of Americans text. Another from Nielsen discovered consumers ages 18-24 send and receive 1,299 texts per month, or about 42 per day.

What’s more, retailers that send text messages to consumers who have opted in to receive them stand a very good chance of grabbing a shopper’s attention. The U.S. boasts a 95% read rate for opt-in text messages, according to CardinalCommerce Corp., an e-commerce and m-commerce technology provider.

There are several approaches a retailer can take for text message campaigns. Web and catalog retailer SkyMall places the phrase, “Order from your cell phone. Text your item number to 49432,” throughout its print catalog. Retailers can do the same in an e-mail or on signs in a store.

Footwear manufacturer and retailer Crocs found success in using text discounts. Signs in the 180 Crocs stores publicized a 15% discount on any purchase—no limit, no minimum. To get the discount, customers texted “Crocs” and the store number to the retailer’s short code. Within seconds shoppers received a reply text message with the coupon, which contained a code that a cashier entered at checkout. In two months time, customers made 94,000 requests for the coupons.

Women’s apparel retailer White House Black Market took another approach. It recently launched FashionAlerts, location-based text messages that alert shoppers close to participating stores about upcoming in-store sales, online promotions, new product releases, and sweepstakes and style tips. It says it chose the text-based program from 1020 Inc.’s Placecast Network in part because the alerts will work on any cell phone, not just smartphones.

So, don’t forget the potential power that lies within the tiny text message. 160 characters could bring in more sales than you‘d ever expect.

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