Chinese consumers are big users of mobile messaging apps and increasingly accustomed to the presence of retailers in their chat apps, and in their chats. That is not the case for U.S. consumers. Yet.
Headphones and related accessories retailer Skullcandy Inc. is pioneering the use of mobile messaging apps to market retail goods and services. It is one of the first participants in mobile app Kik’s keywords and promoted chats programs. Kik enables users to create profiles, connect with one another and chat (essentially free text messaging).
It took Skullcandy a couple of years to get to 108,000 followers on Twitter. It took the merchant two months to get to 230,000 chatters on Kik.
“Consumers increasingly are headed toward mobile apps and mobile messaging apps, especially consumers in our demographic,” says Diego Nunez, senior director of digital marketing and e-commerce. The demographic is twentysomething, active lifestyle, passionate about music. “At Skullcandy, we want to be tech-forward, the earlier you are with these new mobile apps and platforms, the better. And the thing most appealing about Kik’s solution for retailers is the consumer does not have to leave the app, so the brand is not forcing the consumer to break the mobile app experience they chose.”
As is the case with other social sites and apps, retailers can create a presence on Kik for free. To date, 6.5 million Kik users have opted in to chat with brands, and more than 100 million messages have been exchanged between brands and users, Kik reports. There are 150 million Kik users worldwide; 68% live in the U.S., Kik says.
Retailers can market their presence through promoted chats, essentially name and logo placement in places where users commonly search for other users.
And retailers can use Kik’s keywords service, which enables them to send automatic replies when Kik detects certain words or phrases in a user’s message. For example, if a user asks, “Where can I buy your headphones?” Kik can enable the Skullcandy account to automatically reply with, “Just click here to visit our mobile store.” The words “Click here” can be hyperlinked to Skullcandy’s mobile commerce site, which would pop up on Kik’s own mobile web browser within its app, so the app user is not required to link out of the app to the mobile device’s web browser.
Skullcandy, however, has not been pushing the commerce angle much yet. It’s working on racking up chatters, getting to better know them and their likes, and sharing content with them, such as pictures and videos.
“For us, the click-through rate on Kik is between four to eight times the click-through rate of Twitter,” Nunez says. “But traffic is a secondary goal. Our first goal is understanding our audience, engaging with them, being part of this community, and understanding what value we can add to their mobile messaging experience, like videos and contests.”
Kik makes money through promoted chats, the placement of brands’ account names and logos. Brands bid on these placements akin to the way they bid on Google AdWords. Skullcandy would not reveal how much it has spent on Kik placements, but says it costs around 20 cents to acquire a new chatter. Nunez says he likes the auction model because it allows Skullcandy to easily throttle its mobile marketing spending as it sees fit.
Kik has 25 brands participating in promoted chats and keywords today, including Aeropostale, Funny or Die, and Adaptly. Kik says compared with social networks like Facebook and Twitter, mobile messaging apps are better mobile venues for retailers to promote their goods and services because users are intensely focused.
“Our brand clients see really high open rates and engagement rates because we are chat-based rather than public stream-based,” says Paul Gray, product strategist at Kik. “Chat is a much more direct channel. With Twitter, a consumer might easily miss a promoted tweet in a stream. With Kik, when a consumer gets a message from someone or some company she chose to start a discussion with, she will want to see what they are saying. Read rates are around 75% and click-through rates on shared content—pictures, videos, links—range from 6-20%.”
Follow Bill Siwicki, editor of the 2015 Internet Retailer Mobile 500, and managing editor, mobile commerce, at Internet Retailer, at @IRmcommerce.