Wireless Technology Brings New Dimension to Shopping
by Bill Gerdes
Imagine walking into your favorite supermarket or retail store, clicking on your WebPhone, learning what products are on sale today, where they are located and how much they cost. It means just a few cents and some added convenience for you, but for an international organization like Procter & Gamble (P&G) using technology to direct consumers to their products is a new and significant step in the marketing process.
That is only one application researched by a team from The University of Alabama’s management information systems program, which has just completed research into third generation (3G) technologies and technology’s effect on interactive marketing. P&G asked the team to find alternate ways to integrate technology and marketing because they see a trend toward less efficiency of marketing dollars in current media environments since consumers have many alternate media for information and entertainment.
The research team—Raman Sehgal, principal project manager; Castor Armesto, interactive marketing manager, Procter & Gamble; and Dr. Alisha Malloy, assistant professor, management information systems—found that early adoption of 3G technologies will provide companies a first-to-market advantage over competitors by gaining cost-side advantages, new channels to market and access to influential end users, all of which are shown to be critical in the wireless marketplace.
“It is very early in the game, and what you will find is that P&G is an early adopter of technology. Before any other companies, you will see P&G adopting technology. They are attempting to determine if there is a marketplace for marketing via wireless media,” Malloy said.
In simple terms, 3G services combine high-speed mobile access with Internet Protocol (IP)-based services. But this doesn’t just mean fast mobile connection to the World Wide Web, rather, it means new ways to communicate, access information, conduct business, learn and be entertained outside slow, cumbersome equipment and stationary points of access.
Before 3G, there was 2G, and even 2.5G. Without 3G, the new ways of sending and receiving information that P&G is considering would not be possible.
“The difference between a 2G and a 3G phone is a much higher data transmission rate. It’s like going from a dial-up [modem] to a cable or a DSL. 3G also offers better screen quality. P&G is attempting to capitalize on the advantages between the two different phones and give them another avenue on which to push out information,” Malloy said.
With 3G, Procter & Gamble interactive marketing will be capable of leveraging benefits through more frequent, more convenient, more value-added customer interactions and transactions that will allow them to drive higher customer loyalty. What P&G stands to gain through wireless marketing is a way to reach out to customers and personalize advertising to fit each individual shopper. Depending on the unique and changing needs of each of its customers, P&G could customize product recommendations for any need that might arise.
Some people might be alarmed when they learn the capabilities of wireless technology. Upon entering the store, information can be sent through a customer’s 3G phone—information based on previous requests. If those looking to adopt 3G are worried about privacy with P&G, their fears can be put to rest. For the company to be able to send customer information, that customer must first opt into P&G’s system to receive messages and information. Unlike Internet e-mail, in which a user logs onto a site and the information can then be passed on to mailing lists, P&G does not sell its information.
In order to put Procter & Gamble on the forefront of interactive marketing, the project team investigated the future domestic expansion and use of 2.5/3G networks, in particular with respect to Web-enabled mobile phone (WebPhone) technologies in the market. With that information in hand, team members determined what key market factors were needed to occur to drive widespread consumer WebPhone usage from which detailed recommendations were made.
From there the project team investigated how P&G could implement such technologies to better serve its interactive marketing efforts. This was done through an exploration of viable options as well as the development of a working demonstration/presentation using available technologies.
Of these alternatives 3G wireless technologies show much promise since they allow multiple touch-points to the consumer in everyday usage. Tomorrow’s 3G services will not only provide simple-to-use access to information but will also provide access to a wide range of business and lifestyle services.
The team’s objective was to develop detailed recommendations surrounding the future use of SmartPhone technologies for P&G interactive purposes; to identify key market inflection points to drive consumer usage; forecast such projected usage and availability; determine SmartPhone capabilities with respect to interactive marketing; and allow P&G to successfully make entry into this area.
In physical appearance, Malloy said that 3G phones will begin to look more and more like the personal digital or desk assistants that are replacing pens, paper, calendars and Rolodexes around the workplace. While the trend in mobile phones has been to smaller models, 3G phones are much larger when compared to even the largest cellular telephones of a few years ago.
The reason is simple. With the current movement to consolidate information from several sources, i.e., phone directories, calendars, computers, wallets and purses, the device has to be large enough to type on, write on and see clearly without squinting. Currently, the smallest cellular telephones on the market, even those that have Internet capabilities, are much smaller than the 3G phones.
“Most of the time [with the older 3G phones] you’ll get a smaller screen—black and white—and not a lot of ability to navigate through it. With the new phones what you get is a bigger screen, color, and the increased ability to interact with more functionality,” Malloy said.
Another advantage 3G phones will have over earlier generations is that when a 3G phone user logs onto a site, he or she will not only receive the text that appears on the Internet version but also the graphics. With previous generations, like 2G and 2.5G, only text was available.
Despite the popularity of cellular telephones and now 3G phones, the means to take advantage of all the added opportunities the new technology offers is not yet available.
“Currently the 3G network is not fully in place. Wireless providers don’t have the infrastructure to support it. Sprint and Verizon both announced the launching of their 3G networks last year. But there were some issues of compatibility between the phones and the actual infrastructure, so they’ve actually taken a step back,” Malloy said.
The research team discovered that the highest level of adoption of 3G was in the 18-to-25 age group. Older age groups’ adoption of 3G depended on whether individuals used 3G technology or similar technology in the workplace. Most males ages 25 to 34 were more likely to use 3G technology because, Malloy said, “most males, when they go in the store, just go in and buy what they came in to buy. But then again, most males have some type of technology in the jobs that they have.”
Women were less likely to adopt 3G than males of the same age group. In the study the team found that many women like to browse and therefore would be less likely to adopt a technology that told them exactly where to go to find a product because they would be more inclined to shop for it. But in the 18-to-25 age group, male and female adoption was nearly the same which, as Malloy noted, can most likely be attributed to that age group’s growing up with computers in the home.
P&G is still working out the details of putting 3G to work in stores. Disagreement over air space ownership rights is a major issue, but it probably won’t be much longer before consumers will be able to receive product information via 3G.
For some it will be a shopping convenience; for others, a shopping annoyance. But with more people adopting new technologies, you may soon be looking at ads on your cellular phone.