How Visa and Toys R Us Are Embracing a Mobile-First Future

DDB and the 2 brands discuss how they're evolving

Visa is betting on connected cars for mobile payments.
Getty Images

As consumers use smartphones more while simultaneously demanding more from their phones, brands continue to grapple with how best to reach their audiences.

“We cannot be ham-fisted anymore as a brand,” said Wendy Clark, CEO of DDB North America. “It’s unacceptable and really diluted. It’s not only if you don’t have a strategy, it’s actually negative and dilutive to your brand when you’re not taking advantage of just the basic table-stakes technology that’s out there and how consumers expect you to behave.”

During an event for brands and agencies hosted this morning by Adweek and Bloomberg Media, executives discussed how the shift to mobile has affected their brands and how they’re learning to evolve with it.

Credit cards are more than just plastic

In a mobile world, credit cards are choosing to identify less as pieces of plastic and more as a tech companies. Kim Kadlec, svp of Visa’s global marketing platform, said she views legacy tech and telecoms companies like AT&T, GE and IBM as role models when it comes to inspiration for her brand.

Kadlec said Visa has made a “big bet” on the Internet of Things. For example, in January at the Consumer Electronics Show, Visa and Honda partnered to equip the automaker’s products with in-vehicle payment technology. She said the estimated 380 million connected cars that are estimated to be on the road by 2020 present a “big opportunity.”

“Mobility has become a much broader concept,” she said. “And I think at the end of the day, creativity in any of those formats is important, and certainly from a user’s perspective, enabling seamless payment technologies is our game. And that’s what we’re focused on. Through your appliances, through your Alexa (Amazon’s voice assistant), running shoes—those are all things we’re working on.”

Asked how marketing shifts in a zero-sum world where someone might add a credit card to Uber or Amazon and then forget about it, Kadlec said the brand focuses on driving brand preference for consumers. It’s also more focused on partnering with other brands to further integrate payment from Visa.

“Our dilemma is that brand equity dilemma,” she said. “When Visa is running behind the scenes—kind of the ‘Intel inside’—and Apple Pay is marketing, there is an awareness play.”

"Mobility has become a much broader concept."
-Kim Kadlec, svp of global marketing at Visa

Smart audience targeting can build or break brand affinity

Brands that don’t understand how to contextually target consumers based on their interests or demographics increasingly will begin to appear out of touch with the people they’re trying to reach. For example, Clark mentioned getting targeted with baby products—which she said was unlikely to be relevant to her as someone in her mid-40s.

Carla Hassan, global chief marketer for Toys “R” Us, agreed. She said there have been several brands that have had a negative impact on her by being irrelevant to her interests and needs.

“It’s one that you’re going to talk about in a not-so-good way, and I think it then just goes back to us as marketers to take the human element of you not as a marketer but as a consumer,” she said. “It then impacts who you hire and the talent you want to bring in because you need specialists who understand.”

Clark said agencies need to focus more on the crossover between the IT, product and marketing departments. She said marketers misfire on messaging, which is why it’s important to have others who can test for accuracy and to make sure the consumer experience is done well.

In-app experiences have risks and rewards

Through its mobile registry app, Toys “R” Us has been able to lower cart abandonment by 25 percent, while engagement has increased by 50 percent. Hassan said consumers have chosen to visit the app, which is reflected in the revenue.

“You’ve got to be very careful to give them the right content to be there,” she said. “That is the single most important thing. Don’t screw it up.”

While apps have driven mobile growth, creating a poorly performing app can negatively affect consumers’ expectations of a brand, according to Paul Sweeney, U.S. director of research at Bloomberg Intelligence.

“I think expectations of consumers in the app environment is very hight, and if you don’t get it right, it’s so glaring,” he said.

"You cannot stop at simply driving a behavior in a new category. You've got to demand the preference for the brand you're marketing for. It's the classic challenge."
-Wendy Clark, CEO of DDB North America

Innovation should have business objectives

Earlier this month, McDonald’s worked with DDB North America to launch its own ordering app while expanding delivery. Clark said that is providing insights into how the brand should approach offering more services for users while still financially benefiting McDonald’s.

According to Clark, around 20 million users have downloaded the McDonald’s app, and about 50 percent of users open the McDelivery app on a regular basis. However, she said that if McDonald’s only succeeds in filling a category of food delivery by partnering with Uber Eats but doesn’t increase its brand preference, it doesn’t benefit in the long run.

“You cannot stop at simply driving a behavior in a new category,” she said. “You’ve got to demand the preference for the brand you’re marketing for. It’s the classic challenge.”

She said the app could over time help drive incremental consumption and behavior while just “scratching the surface” of its potential. For example, it might experiment with near-field communication technology that could allow McDonald’s to start making a customers’ meals when they are within a certain distance.