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Understanding the Impact and Reach of SMS Marketing and Digital Wallets

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Wise Marketer Staff

Posted on February 7, 2024

An interview with Jay Hinman, VP Marketing, Vibes

Yesterday, Vibes, the intelligent mobile engagement platform, announced the findings from its comprehensive annual Consumer Insights survey for 2024. Vibes surveyed a broad range of over 1,000 mobile-centric consumers with the intention of understanding what their relationship with their smartphones looks like today; how this has changed over multiple years; how they prefer to interact with brands on their phones, and how these interactions help or hinder their path to purchase. You can read the official press release here.

Understanding how customers choose to interact with brands through the digital channels available today is a hot topic, so we connected with Jay Hinman, VP Marketing, Vibes to understand more about the report’s findings. Here is our interview.

WM: On Tuesday, you released a new 2024 survey revealing how consumers interact with brands on their phones. What were the topline highlights from the research?

Vibes: Now that we’ve done this 7 times, I think we’ve been most excited to see the organic growth of Mobile Wallet as a marketing channel for brands and businesses.

  • Our new 2024 survey found that 54% of consumers have made a purchase based on a mobile wallet offer they received from a brand, with nearly 60% having used a mobile wallet-stored loyalty card when making an offline or online purchase.
  • Mobile wallets were once reserved primarily to house digital versions of credit cards, which is how most people perceived them even 18-24 months ago.
  • Now 52% of consumers now say they use mobile wallet for storing items other than credit cards, such as loyalty cards, offers, coupons, gift cards and event tickets.
  • This shows just how opened-up this channel has become for brands in ways that it wasn’t before.

WM: One of the findings that jumped out to us was a "near ubiquity of SMS adoption by both brands and their consumers, with 75% of consumers reporting that text messages from brands routinely drive them to make purchases". When did we reach a tipping point on consumer acceptance of marketing messages in the SMS channel?

Vibes: That was a big finding for us as well! The growth has been gradual yet moving only in one direction, as brands have started understanding how impactful well-timed, personalized, and offer-oriented SMS can be at driving traffic to their stores and locations, both offline and online. It has a lot to do with the declining relevance of email marketing, which suffers from low open rates, at less than 20% these days.

SMS is opened by 99% of recipients and read by 97%, which means an SMS offer for free chips sent at 11am to an opted-in SMS list by Chipotle, for instance, is going to have a major impact on getting guests into their locations. Our customer Hibbett Sports is seeing a 27% increase in year-over-year SMS revenue as well, right in line with this increased adoption found in the new survey.

WM: What would you say are the best practices for adopting SMS into your comms channels? What should brands consider in adding this channel to the mix?

Vibes: It’s important for brands to look at SMS marketing that’s built for engagement, growth, and retention, and not just quick-hit, batch-and-blast list-building. Their mobile database of opted-in SMS subscribers is a true asset, and it’s important that they treat it like one. This means using innovative methods both online and in stores to opt in and acquire new SMS subscribers – such as API and customer data-driven SMS program enrollment - then personalizing their journeys so they receive messages based on their own buying habits, patterns, and preferences.

Last year’s survey found that 28% of consumers under age 40 even cited a frequency of too few messages as a reason to stop receiving communication from a brand. Focusing on customer LTV and retention through smart segmentation and targeting is key. It’s great to be able to acquire new SMS customers, but it’s even better to engage, grow and retain them.

WM: Do you think SMS works particularly well in specific verticals, for example, QSR, Convenience Retail, and Casual dining? Or can it work for any retailer?

Vibes: We see the best adoption coming from both QSR and retailers who are looking to unite their digital offers and physical locations – restaurants or stores – by driving foot traffic with SMS and Mobile Wallet. This is also becoming a strong focus for hotels and hospitality brands as well, and even B2B marketers are starting to see the power of SMS, given that SMS and MMS have an immediacy and a revenue impact that email just doesn't quite have any longer.

WM: Is there a difference in the way online retailers (e-tailers) use SMS as an engagement tool than brick and mortar retailers? What should brands know?

Vibes: Because retailers want to communicate with customers when they’re shopping, message timing is important. Brick and mortar shoppers can only shop during business hours, while online shoppers can shop whenever they want.

Online shoppers are much more likely to leave items in their shopping carts, which makes SMS alone a great tool for abandoned carts. Retailers who are looking to drive traffic in-store use SMS and mobile wallet together as a revenue multiplier.

WM: Your report also covered consumer use of mobile wallets. The survey found that 54% of consumers have made a purchase based on a mobile wallet offer they received from a brand, and 52% of consumers now say they use mobile wallet for storing items other than credit cards, such as loyalty cards, offers, coupons, gift cards and event tickets. Can you give us some more context for these findings? What do they mean for marketers in 2024?

Vibes: This is perhaps the most exciting part of this year’s findings. It means that brands and businesses have started to understand that there’s a big gap between high-reach, low-engagement email marketing and low-reach, high-engagement mobile app marketing that needs to be filled.

They’ve done this by creating dynamic, easily-updatable mobile wallet passes for offers, loyalty cards, coupons and more – then driving their customers to them via SMS. Marketers actually see 19x more revenue per message from campaigns that use both SMS + Mobile Wallet, vs. those just sending SMS messages by themselves.

Mobile Wallet revenue is also fully attributable, too – for instance, when a user brings a wallet coupon into a KFC or a Chipotle, the marketer behind that campaign knows exactly how much revenue she’s driving. Mobile Wallet happens to be compatible with all point-of-sale technology and offers a variety of barcode options to ensure passes can successfully be scanned. Since it’s easier these days for consumers to find and access a Mobile Wallet pass than digging through a pocket or searching in an app, that ensures that the checkout process is dramatically streamlined.

WM: When you speak of mobile wallets, is there a dominance of Apple Wallet over other options? What does the adoption rate look like for different wallet options?

Vibes: Only by virtue of the majority of iOS vs. Android smartphones in the US, which stands at roughly 60% to 40% as of December 2023. The Vibes mobile wallet works beautifully on both, and we haven’t found meaningful adoption rate variances between Apple and Google Wallet with our customers.

WM: Tell us a little about your company? We'd like to know your current focus, maybe an origin story if you have it.

Vibes: Our co-founders Jack Philbin and Alex Campbell founded Vibes in 1998 after having been friends since kindergarten. They both saw the immense promise of the then-new mobile messaging revolution, as SMS messaging began to migrate from its overseas, “triple-tap” roots onto the handsets and carrier networks of North America.

They quickly built extremely close, trusted relationships and direct connections with over 65 North American mobile carriers like Verizon, T-Mobile, and AT&T, while simultaneously building a downtown Chicago-based company and a robust platform that focused on creating personal and revenue-driving mobile engagement between consumers and the brands they love.

Today the focus is on continuing to innovate and bringing automated, AI-powered intelligence and marketing recommendations into the platform, to help marketers understand their next-best action so that their campaigns are highly segmented, targeted and extremely effective in building foot traffic and new revenues.

WM: Anything else we didn't ask?

Vibes: It’s important to note that not all SMS and MMS message routing paths are created equal, and that the closer a messaging platform provider is to the wireless carrier, the more timely, accurate and compliant messages will be.

Vibes is one of only four Tier 1 message aggregation companies with direct connections with Verizon, AT&T, T-Mobile and 65 other regional carriers across North America, and the only one that’s US-based. This means our customers don't have to worry about messages “hopping” from company to company to reach their destination, or about messages that arrive late or not at all. We even help companies like Polo Ralph Lauren, The Container Store, Qdoba and Children’s Place automatically optimize their SMS send times for maximum effectiveness.