A mobile marketing lockout for small business

The combination of a concentrated retail market and strong mobile phone penetration means that big retailers may soon know lot more than they need to about how we spend our money.

Big business will soon be able to track the spending habits of Australians and push personalised marketing messages down their mobile phones.

The technology will allow big retail giants to build a picture of every consumer and ‘sell’ them customised products and services via mobile applications as they approach their premises.

But the technology could be limited to the major retailers such as Woolworths and Coles, as they will be the only ones capable of combining their enormous product range with in-house card payment and loyalty programs, to create tailored profiles on individuals’ spending habits.

Australia’s 320,000 small and medium sized businesses risk being locked out and will be unable to compete.

Australia is relatively unique in that it has both a strong concentration of retail owners, and one of the highest penetrations of mobile phone ownership in the world.

Mobile marketing may be with us within 18 months and will embed big business in every aspect of our lives.

Our smartphones are like little computers in our pocket, allowing rich two-way communication with retailers 24 hours a day. While this new technology could be incredibly useful to consumers, the fact it will be effectively limited to big business ultimately poses threats to consumer choice.

Within 18 months, consumers may be able to download apps, which will see their phone beep as they approach a store, offering customised products and pushing offers onto them.These mobile applications will only be useful if an individual spends enough with a retailer so that a profile of them can be built.

That won’t be the case for boutiques and other small outlets, as it is only the big retailers who have all that information at their fingertips and the marketing power to achieve this.

According to Federal Parliament’s Joint Select Committee on the Retail Sector, Australia has one of the most highly concentrated retail markets in the world, with Woolworths, Coles and Franklins controlling about 80 per cent of all supermarket sales.

Only the big retailers know the identity of cardholders and what they have purchased, while banks know how much consumers have paid in total, but not individual items in a grocery basket.

Computer tracking programs such as cookies follow us on our laptops, soon they will be tracking our entire lives on our mobile phones, but do we really want even more concentration in the retail sector?

Jost Stollman is the chief executive officer of retail payments company Tyro.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles