Sales promotion is an essential tool in your marketing grab bag. New technology tools are popping up almost every day. Technology keeps changing the psychology of the way consumers shop, and the changes are powerful. Shoppers will soon be able to receive real-time coupons on their cell phones while they shop. There is a technology transformation coming to many of the nation’s retailers, and receiving coupons on their smart phones is just one of the new applications that will let shoppers point, click and purchase. Drugstores will offer loyalty programs and specialty chains will allow shoppers to breeze through the aisles compiling a wedding registry just by pointing at merchandise. Will shoppers embrace such aggressive merchandising? What will they have to do? How long will it take for this new technology to reach a critical mass? First, they’ll have to download free applications onto their phones and consent to being tracked electronically while in a store. Will they do it? After all, people already wander city streets guided by maps on their mobile phones. Why shouldn’t the same technology lead them to cookware in Aisle 2?

I’ve been in the gourmet housewares business since the late ’70s and, I just have to tell you, nothing has been as powerful a change in the psyche of the way we do everything as this technology. There are now software applications being tested that can make product recommendations. If you use a smart phone now, you are bombarded with a gushing stream of new applications to do everything from making travel easier, to making dinner reservations. If a shopper was buying pots and pans, imagine a new application that might suggest buying the store’s name-brand product or the store’s private-label product, and suggesting add-on purchases such as cookware utensils, cleaner and a cook’s apron. This creates a novel, entertaining shopping experience. Many stores currently are focusing on improving their mobile shopping sites, which some consumers use when browsing the aisles to see product reviews and specifications. Retailers, like Sears and American Eagle Outfitters, work with a company called Usablenet to optimize their mobile sites.

Cisco Systems, a supplier of networking equipment and services for the Internet, has a Mobile Concierge system that is capable of connecting customers’ smart phones to retailers’ wireless networks — so a shopper could type “Calphalon cookware” into a cell phone, then pinpoint its location in the store. I see the smart phone being used more and more in the shopping experience. What are the risks of this new technology? Privacy worries and applications that might freeze or give bad information, which would most likely frustrate consumers. So, reliability will be a priority, a reason retailers are starting with limited tests. Also, many retailers simply cannot afford such technology. It’s not here yet, but it’s on the way. Retailers are always looking for ways of creating a novel, entertaining shopping experience. Could it help increase sales? Only time will tell. I am aware of testing right now for extending the smart phone’s use as a scanner in the retail world — especially gift registry and wish lists — and you’re going to see a lot more of this application this year.

Another marketing tool is getting a sales lift from gift cards. This last holiday season, retailers used credits to lure shoppers back after the holidays. Call it the gift card giveaway. L.L. Bean handed out a $10 gift card for every $25 that shoppers spent during the 2009 holiday season, a much sweeter deal than 2008’s $10 for every $50 purchase. Abercrombie & Fitch featured a $25 gift card for every $100 spent. It’s a strategy forged in a tough climate for retailers, whose profit margins evaporated amid huge markdowns during the 2008 holiday season. Cut-rate cards offer a double incentive: These bonus cards bring shoppers into stores now and give them reasons to come back next month. Gift cards have traditionally provided a bump in sales for merchandise during the slow winter months. But faced with forecasts that store gift-card spending would drop by 7 percent this year, merchants are trying to get them into as many hands as possible. It’s all about driving traffic back into the stores. Gift cards are an alternative to deep discounts, and more retailers are getting on board. When is the strategic time to offer the gift cards? I surveyed the 2009 holiday shopping season retailers’ timing and discovered that many retailers began offering the $10 gift card early in October as a way to attract shoppers with the option to use the card before the holiday or hold onto it until after Christmas.

There is no doubt that 2009 was a very promotional holiday season with lots of offers in the marketplace. It was more generous than many, and was generally well received by customers. Shoppers said that they were happy to receive these bonus cards to help stretch their dollars during tough economic times. Some consumers even acknowledged the incentives that got them to shop in the first place may go unused. Retail analysts say roughly 40 percent of gift cards do not get redeemed, and that is part of the appeal for merchants, compared with marking down merchandise. Merchants are also relying on consumers who do use the gift cards to spend more than the incentive offered. Several merchants sold all their gift cards within hours through an online discount site: Groupon.com. Some merchants added a free shipping day to their promotional gift card offer and reported an increase in sales.

“Web Sales Spike After Snowstorm!”
That headline appeared during the 2009 holiday shopping season. Stores in the snow-battered East Coast were nearly empty during a weekend snowstorm, but shoppers kept spending online. Retailers used new discounts and shipping offers to make sure gifts arrived in time for Christmas. Shoppers turned to their computers to whittle down their Christmas lists. The Web research company Coremetrics reported that East Coast online retail sales rose 22.4 percent on the weekend before Christmas compared with last year. That’s another good reason to strategically use your Web site because you never know when a snowstorm will strike.

Marshall Marcovitz is the founder and former CEO of the CHEF’S CATALOG, a leading Internet shopping site. Currently, he is a lecturer, a university professor and a marketing consultant. He may be contacted at mmmellow9@yahoo.com.