Here and Now

Whether consumers are Gen Now,' eating now or paying now, a sense of urgency is in the air.

Linda Abu-Shalback Zid, Senior Editor

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Pay Now

Just as consumers seek immediacy when it comes to consumption, cash transactions should also be quick. A new way to pay is on the horizon, while interest is being rejuvenated in a tried-and-true method.

Mobile wallets: Consumers today carry wallets loaded with credit and loyalty cards. They also might forget to bring coupons or gift cards on their shopping excursions. But new efforts from Google for the Sprint network and Isis, a mobile commerce venture involving AT&T Mobility LLC, T-Mobile USA and Verizon, integrate those capabilities into a cellphone. “Think of it as a way of digitizing your leather wallet,” said Tony Sabetti, director of POS & Payment Terminal Alliances for New York-based Isis. “So you’re integrating all this capability of payments, offers and loyalty so that when the consumer does that tap, they’re transferring all that information in one shot.”

That “tap” is enabled by NFC (nearfield communication) technology, which allows two devices to communicate in proximity, ensuring the use is deliberate. While easy payments might be “the hook” of the technology, Sabetti said, it also allows retailers to communicate with customers on a customized basis. “It’s about that personal relationship through the phone that you can leverage to motivate consumers to change behavior to buy more product, and to come into the store more often,” he said.

For Mountain View, Calif.-based Google, another goal of mobile wallets is to close the loop of online and offline shopping, according to Google’s Serge Kassardjian, strategic partner development, mobile commerce.

Historically, Google has driven intent to purchase on the Web with people searching for a keyword, looking for something to buy and then going to the Web page to buy it. That might not work so well to buy a taco, though. “Generally, what we’ve historically done very, very well is generate traffic to websites with the intent to buy,” he said. “Now we’re going to be serving ads to generate foot traffic into the store with the intent to buy.” Version 1.0 of Google Wallet was launched for the Sprint Nexus S 4G phone in five initial cities: New York, Chicago, San Francisco, Los Angeles and Washington, D.C., in October 2011. Participants include Chevron, Subway, Walgreens and Macy’s.

 And while the two companies work with different mobile carriers, both agree about the importance of an open platform. “Carriers that operate us and the merchants that operate us were very specific,” Sabetti said. “They’re expecting this to be an open platform and they’re expecting it to be extremely portable. There is no value in going to market with a payment solution that appeals to 15% of the U.S. population.”

ATMs: During the economic downturn, many consumers turned to using cash as a budgeting mechanism, according to David Dove, managing general partner of Beaver Creek, Colo.-based Dove Capital Partners. “There’s one thing that I find, and that’s if I don’t have cash in my wallet, I can’t spend it,” he said. Also, 66% of consumers say they use an ATM located in a retail store to save time, he said.

Numbers such as that spell opportunity for retailers, according to Tom Pierce, chief marketing officer for Houstonbased Cardtronics Inc. Citing NACS data, he said average ATM sales per square foot are about $70 (assuming a 4-square-foot ATM space), compared to $41 for the average product—meaning retailers should treat ATMs as a category.

According to recent Nielsen data, 42% of consumers were influenced to select a particular store because an ATM was there. And Pierce said the ATM’s 2% gross margin driver places it between milk and ice cream in importance.

Opportunities also exist at the transaction level before (location search technology, sweepstakes and surcharge-free and fee-free programs), during (onscreen advertising, loyalty and rewards, and instant offers) and after (couponing and promotions, fee-related updates and social media).

When choosing which bank to work with, 74% of consumers said the extent to which ATMs are located in convenient places was an important factor. Meanwhile, only 19% of banks see ATMs as a key factor in customers closing an account, Dove said: “So the banks don’t necessarily have the importance thing down on ATMs, and that creates an opportunity for you.”  

Hispanics Now

Hispanics account for more than half (56%) of U.S. population growth in the past 10 years, with an annual buying power that already exceeds $1 trillion, according to Carlos Garcia of Knowledge Networks. In 2010, 16.3% of the total U.S. population was Hispanic, with 23.1% under 18; 14.1% are adults. Garcia suggests there are 10 important things to know about marketing to Hispanics:

1. There are many types of “Hispanic consumer,” with the population also being broken down into country of origin, acculturation level, socioeconomic group, geographic distribution and shopping and purchasing behaviors.

2. Garcia suggests not leaving Hispanics in an “isolated marketing island.” Retailers should recognize unique issues while treating them as part of the new American mainstream “to avoid condescension, language miscues and message confusion.”

3. Translation is not the issue, with English-to-Spanish translations also seeming transparent. Translation should include meaning, tone, mood, flavor and cultural context.

4. Young Latinos want to be known for who they are, not what they are.

5. Mom knows best—outside of the c-store context. Mom mostly buys the food, OTC drugs and cleaning and household supplies, but she tends to think about others first, going to extraordinary lengths to make sure families are “clean, well-fed and content.”

6. Realities—such as limited budgets, large families and low wages, high incarceration—don’t get in the way of Hispanic families fi nding ways to eat in abundance, enjoy each other’s company and be happy.

7. Hispanics don’t live in a one-onone world. Garcia said Hispanics might buy not only for themselves, but also for neighbors, friends, people who might drop by and others. Market to a social context.

8. The buying process for Hispanics is changing. Hispanics in construction were hit disproportionately by the recession. They consolidated families, pooled money, moved in with each other and learned to use coupons and find bargains.

9. Advertising focused on Hispanics isn’t only in Spanish anymore, and it’s about feeding and maintaining relationships through concert sponsorships, online advertising or games, sharing recipes, etc.

10. Hispanic research is fun, but it isn’t easy. Garcia points out that it isn’t just about numbers and statistics, but about a living, breathing, evolving population— and it takes respect, knowledge, cultural insight and resources. 

Women Now

Of the 303 million people in the United States, the majority, 51%, are female, according to Susan Morris, principal of The NewHeight Group. They control 33% of the country’s wealth ($9 trillion), giving them “power of the purse.” And they buy most of everything, whether for the home, office, charities or nights out with friends, parents or children, making them “chief purchasing officers.”

They also are critical to the c-store channel, according to Eric Johnson, senior director of marketing, immediate consumption, consumer insights & strategy, for Kraft Foods Inc. In 2008, women accounted for 44% of c-store shoppers, but that number declined to 42% in 2010. Women’s mean dollars in total spend is $33 at c-stores, substantially lower than their male counterparts’ $37. Both statistics suggest that c-stores have an opportunity to grow their female consumers’ shopping business, and Johnson said adding just one more $1.50 item to that basket could mean a $2.1 billion opportunity for the industry.

Morris also pointed out that women’s power of the purse can extend beyond their own purchases, because they are avid about sharing likes and dislikes with all of their networks. “Women are going to talk, so make sure it’s a great story,” she said.



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