The ‘App’ Trap

Promise, pitfalls of mobile technology and social media

CHICAGO -- Retailers hear of many delightful and potentially lucrative uses of mobile technology and social media, such as accepting mobile wallets to encourage low-cost transactions, rewarding customers with downloadable songs or engaging smartphone users with a “scratch off” and win game.

For all the enticing ideas that social media can bring, retailers may fail in their efforts if they skip the basics, according to a speaker invited to the annual planning meeting for PCATS. Short for Petroleum Convenience Alliance for Technology Standards, the Alexandria, Va.-based group met in Chicago to address developing trends, continue current projects and map out a strategic plan.

To help achieve those goals, organizers brought in Anthony Shop, chief strategy officer and co-founder of a social-media consultancy called Social Driver, Washington, D.C.

“Customers love apps that are useful,” Shop told the audience of about 60 attendees. “Ideas can be great but won’t work without a supportive audience.”

Often social-media efforts wallow or fail because companies don’t take basic steps with regards to finding purpose, involving stakeholders and considering the target audience. Shop referred to a three-stage process:

Boardroom: In this initial step, key executives focus on company goals, not the end result. Attendees said the reason many retailers are delving into mobile payment is to encourage customers to pay with decoupled debit, which helps retailers avoid high credit-card transaction fees. Focusing on a goal like that may lead a retailer in many directions that may or may not involve mobile wallets.

Conference Room: After doing the legwork of deciding on goals and direction, retailers have to bring in the players within the organization who will execute the plan, management, accounting, marketing, operations, all the way down to the cashier who needs to learn something new. For instance, Shop said many apps fail or are downloaded but never used more than once or twice because cashiers don’t encourage customers to engage them on an ongoing basis.

Show Room: Finally, what the end result looks like and how it operates at the store level is the final test. For Seattle-based Starbucks, part of its program is to provide relevant offers based on weather. As the coffee-shop giant develops products for all day-parts, automated programs tied to weather send offers as the day cools or heats up.

“Many companies do apps because the competition is doing them,” Shop said. “But if you look at app reviews and [usage stats], you’ll be underwhelmed.”

Ultimately, the key is to understand the chain’s goals, bring in the moving parts--the people--who need to execute on any plan and finally, know the customer and what he or she expects and would find useful.

The four-day PCATS meeting in Chicago involved retailers, suppliers and manufacturers, gathering to discuss and develop technical standards for devices, services and processes relating to the c-store industry. PCATS is affiliated with Alexandria, Va.-based NACS.

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