June 1, 2012, 12:00 AM

The Power of SoLoMo

The merger of social, local and mobile marketing proves increasingly appealing to on-the-go shoppers.

Lead Photo

Consumers walking through a mall or airport terminal can smell a Cinnabon roll baking long before they reach the bakery, and the chain counts on that sweet aroma to pull shoppers and travelers in. Last year, Cinnabon began pulling shoppers in electronically; specifically, smartphone shoppers who love check-in apps.

It created and organized venue pages for social/local/mobile check-in app foursquare and for Facebook. A venue is a page that contains a location's GPS geocode and displays information on the location and special offers or coupons if available. Foursquare has 20 million users and Facebook has 180 million U.S. and Canadian users, the companies report.

Cinnabon then let franchise owners place coupons on their store pages for free rolls, 15% off a purchase and other special offers. One franchise owner offered a free iced coffee with the purchase of any baked good. This gives bakeries the opportunity to promote new products, in this case iced coffee, in new ways.

When a foursquare or Facebook user opens one of the apps and the app pinpoints his location using his smartphone's GPS technology, the app presents a list of nearby stores, restaurants and other locations. When the user sees a Cinnabon bakery, he can tap it and then see a store's page with the special offer.

Consumers responded big time: foursquare check-ins increased 43% and Facebook check-ins and Facebook mobile Likes increased 86%, Cinnabon reports. The payoff has been increased customer engagement, a big boost in word of mouth and additional sales, Cinnabon says.

"Bakeries want to encourage people to tell their friends to come, and that plants the seed for others. They see check-ins as digital word of mouth," says Rachel Hadley, corporate communications manager at Cinnabon who heads the chain's social media program. "Now we're definitely considering location-based services opportunities with every marketing campaign we conduct. Location-based services have become second nature."

Come on in

The Cinnabon campaign is an example of a marketing strategy that's being called SoLoMo, for social/local/mobile: Local merchants marketing to socially engaged shoppers via their mobile phones. It's a new tactic, and one that comes with its own set of nuances. That includes the questionable quality of data entered by consumers, such as when they create an entry for a favorite local business in foursquare. But some experts say the combination of social, local and mobile is a potent force, and some companies like Cinnabon are validating that assertion with good results.

"The triple threat of social, local and mobile is an evolution of previous digital tactics taken to a new level," says Tom Nawara, vice president at Acquity Group LLC, an e-commerce and m-commerce consulting firm. "The incredible rise in smartphone ownership and usage over the past few years has given brands and retailers the ability to more effectively present themselves and their products to consumers at the right place, the right time and in the right context."

Some consumers are indeed getting into digitally being in the right place at the right time through apps such as Facebook, foursquare, Gowalla, shopkick and Wallit. 18% of U.S. smartphone owners in February 2012 used a SoLoMo service to check in to certain locations or share their location with friends, according to a study from the Pew Research Center Internet & American Life Project. That's up from 12% in May 2011. In February 2012, 50% of all mobile phones in use were smartphones, research and measurement firm Nielsen Co. says.

Care for some iced tea?

Among the retailers trying to make SoLoMo work is Walgreens. The drugstore chain has been a pioneer in m-commerce with such tools as bar code scanning for prescription refills and text message refills. It's now working with foursquare to offer customers who check in at a Walgreens store coupons for select products.

Walgreens started out last year with 50% off Arizona Iced Tea, which it offered across the entire chain. "From a redemption rate perspective, it is performing at a level far above the industry average and benchmarks for standard coupons as a whole," says Adam Kmiec, director of social media at Walgreens, who didn't provide details. "Arizona has been delighted, as have we and foursquare."

A Walgreens shopper with a smartphone and the foursquare app opens the app upon arrival at a store. A list of nearby retailers and other locations pops up. He taps on Walgreens and is presented with a coupon for Arizona-brand iced tea.

To redeem the coupon, he shows it to a cashier who must key in the coupon code. To speed up redemption, Walgreens is rolling out coupons with bar codes and equipping its checkout lanes with optical scanners that can read bar codes off smartphone screens, something conventional laser scanners can't do. Walgreens is now fully outfitted with optical scanners, rare in retail today. That means Walgreens' SoLoMo coupons now can be scanned, making the process quicker.

To create a campaign, Kmiec uses a web-based dashboard from foursquare. Every Walgreens store has a page with its geocode, the precise longitude and latitude that a satellite recognizes so that it can present a consumer with an offer for the nearest store. He types into an offers window the text for a coupon and uploads images and bar codes. Then he saves it and the offer goes live across the foursquare network. "We run the program, we set up the strategy, it's self-administered in terms of access," he says.

Setting up venue pages and running campaigns is free on both Facebook and foursquare. However, if a company has a great many locations, it may choose to hire a marketing firm or SoLoMo specialist vendor to handle the creation and maintenance of its virtual venues and coupon campaigns, as Cinnabon did with MomentFeed Inc. Walgreens is handling its programs in-house. Costs could rise, though, as both Facebook and foursquare seek new ways to monetize their networks.

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