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App Is Always Ready to Open the Door for User Purchases

Digital marketing firm i3 Brands Inc. is developing a mobile app that uses Big Data and geo-fencing to make sure ads are placed before the consumers who are most likely to make purchases.

The app is called “Watch Out!” It was designed to provide mobile device users with real-time notifications, alerts and buying incentives. These incentives are to be based on consumer locations, buying histories, and personal interests. Michael Lucas, CEO of the Del Mar-based company, says the app has the potential to change the way people shop.

“We see ourselves as the platform that connects consumers to all products in their world,” Lucas said, “Our data makes something relevant available to you when it is important to you. Everyone wants to save money. Everyone is trying to save time.”

Big Data is the process of sorting through computer-generated information to identify the people who are most likely to buy specific products. Once the information is gathered, it must be analyzed so that marketers can determine where to place ads.

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Transaction Fees

The Watch Out app tracks consumer spending habits much in the way that Facebook tracks the habits of its users before targeting them with relevant advertising, Lucas said.

The business model calls for having transaction fees for brands that use the Watch Out app to reach consumers with their advertising. Lucas did not specify how much the ads would cost. The transaction fees will be triggered when consumers open their Watch Out apps to see ads that are sent directly to them through their mobile devices.

He stressed that there will be no cost to consumers.

Lucas expects the Watch Out app to become cash positive by the first quarter of 2018. He forecasts the app will generate just over $5 million in gross revenues by the end of that year.

Paul Chang, who leads IBM’s cognitive solutions for the consumer product industry, said he expects the Watch Out app to impact millions of consumers in the U.S. and abroad. Chang serves on Lucas’ technology advisory board.

Location, Location…

“It is essentially a mobile consumer engagement platform,” Chang said. “Imagine if you are walking by Starbucks and you get a coupon that says, ‘Hey, stop in. Get a hot drink and get 10 percent off.’ Something like that is very relevant versus sitting in an office and getting the same offer. I’ve not seen anything quite like it.’

In addition to being a vehicle for promotions and sales offers, Watch Out can notify consumers about recalls for auto parts, food safety issues, and medications, Chang said.

Ernie Hahn, general manager at the Valley View Casino Center — formerly the San Diego Sports Arena — said he expects Watch Out to become a game-changer and a disrupter in the marketplace.

The app will enable entertainment venues to know more about customers and their interests, so facilities can provide better consumer experiences, he said.

Hahn said Watch Out also has the potential to improve the way consumers buy concert tickets. Today, many fans must buy tickets through secondary markets and pay prices that are greater than a ticket’s face value.

“Nowadays, almost anyone can become a ticket broker by buying tickets and reselling them,” Hahn said.

With Watch Out, entertainment venues would have the ability to determine if the people who come to sporting and entertainment events actually are the same people who originally purchased the tickets, he said.

Hahn said he plans to use the Watch Out app when it becomes available later this year to collect data about consumers who come to his venue. This will enable him to better understand their buying habits.

Hahn said he hopes to use the app to help hold down the cost of tickets, which often are purchased in bulk and resold at prices that are much greater than face value.

Hahn said he envisions a ticket-buying process in which buyers with the Watch Out app register their mobile numbers at the time of purchase. They would display their tickets on their mobile devices upon entering the venue. Ticket takers then would be able to verify that the tickets were purchased by the mobile device’s user.

Lucas said people who buy event tickets and later decide to sell them would be able to transfer them to the new buyer’s mobile number, provided that the buyer downloaded the free Watch Out app.

Dr. Kristin Stewart, an assistant professor of marketing at the California State University, San Marcos, said collecting data on consumers is becoming increasingly common. What varies is how the data is analyzed.

“Everything we do can be recorded,” she said. “What has changed and will continue to evolve over time is the ability to make sense of Big Data.

“Marketers are bridging relationships with IT people,” Stewart said. “They then are building automated models. Marketers can say, ‘I want to predict the likelihood of someone buying this product.’ ”

No Names

To be part of the Watch Out system, consumers will need to download the free app. Lucas said his goal is to get the Watch Out icon on the first page people see when they turn on their mobile devices. He stressed that the app won’t violate privacy.

“Brands can engage with you without knowing what your name is,” Lucas said. “The brand wants to know your consumer habits. It knows the audience demographic range, but not who the consumer is. We have to remain the trusted platform that consumers feel comfortable going to.”

Lucas said Watch Out will be more comprehensive than any mobile marketing app now available.

“We are here to allow brands to connect to what they call the last mile, to know which consumers have their products,” he said.

Plans call for launching Watch Out later this year. The app will incorporate information from government data sources, Lucas said. He noted that i3 already has several brands that specialize in software and data-driven solutions. i3 leverages the expertise and insights from each of its brands to improve the performance of the group as a whole. The i3 brands include:

• TradeMotion, a provider of original equipment manufacturer (OEM) parts catalogs, ecommerce websites, and data solutions to the automotive industry in North America.

• Parts.com, a digital provider of OEM parts, accessories, and merchandise.

• PartsProtection, which offers extended coverage service contracts that include OEM parts.

• Frequenz, which provides serialized data, supply chain traceability, and information management solutions. Lucas said clients can use this technology to track and trace products for safety and recalls.

Lucas holds that Watch Out will benefit consumers and businesses through good and bad economic times. No matter how strong the economy is, consumers always will need to know where to buy the products they need at the best price, he says.

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