Smartphones let retailers target deals to shoppers

Posted at 8:00 PM, Apr 04, 2012
and last updated 2012-04-04 22:11:46-04

LOS ANGELES (CNN) — Your smartphone might help retailers to be smarter about your purchasing habits and even let them send you targeted discounts while you shop.

Mobile marketing is an essential tool for the retailer in the next two years, said Gary Schwartz, the CEO of Impact Mobile, a mobile-tech firm. He said nearly half of all cell phones in use today are smartphones, the kind necessary for mobile marketing. In two years, that figure will jump to 70%, he said.

You can register with a retailer and sign up for alerts, text messages or other notifications about special offers and sales. The retailer then can keep tabs on your shopping and spending habits and lure you into their stores.

Schwartz said it’s quite possible that smartphones will help boost sales and in doing so, help lift the economy.

“If they’re used in a smart way, it will absolutely drive sales,” he said.

The Gap, along with its other brands Old Navy and Banana Republic, is one of the companies taking advantage of mobile marketing.

“Basically we send them offers as they shop,” said Amy Carr, the Gap’s senior director of customer relationship marketing.

The Gap brands have teamed up with Visa on a smartphone app, “Gap Mobile4U.”

“So Gap/Visa’s technology allows you to see where the customers are shopping, and we can [provide] offers or discounts telling them what’s going on in the store when we see that they are close to stores or inside malls shopping,” she said.

Digital marketing consultant Zachary Cohen refers to the technology that links stores directly with potential shoppers as the “Wild West.”

“There are no rules, there are no protocols,” said Cohen. “The law is very fuzzy on it, because the government can’t legislate things that they barely understand.”

Cohen worries about smartphone spam and digital junk mail invading your most personal of personal devices.

But Carr said that when it comes to this technology, the industry will most likely regulate itself.

Carr said it’s too dangerous for retailers to risk angering potential customers with unwanted messages that eat up texting minutes and battery life. After all, sign-up is still voluntary.

Shopper David Thomason in Los Angeles said he doesn’t like retailers knowing his whereabouts.

“They’re privy to too much information,” he said. “It’s invasive.”

Several other shoppers outside an Old Navy store in Los Angeles also said they would not take advantage of the technology.

But there are plenty of other people who have signed up for it. And according to Carr, it is working.

“We can see that this has a high take rate, so we know the customer is responding to it,” she said. She declined to cite sales figures.

The technology is still in the development phase, Carr said, but the company has models, which include unique sales codes, that it can use to measure success.