Grace: The mobile marketplace continues to experience higher and higher percentages of smartphones as consumers upgrade their plans. It's pretty clear that the suppliers and service providers want you to upgrade to a new phone every two years. Predictions on new smartphone penetration rates versus standard feature phones are expected to intersect and surpass the 50% mark as early as Q3 2011.

The even bigger trend is that when you look at what consumers are downloading, they're moving beyond entertainment and games and are embracing useful, time-saving real-life applications that are both informational and transactional in nature. Rich smartphone applications are packed with useful feature sets, including alert notifications that users often find very useful. Of course, it's not just apps. SMS/text messaging capabilities are available on virtually every phone and people are getting used to using these features for both informational and transactional, or two-way, communications. So there's opportunity across the board to reach out to people on their mobile devices.

CT: What are some good examples, particularly of these two-way transactional interactions?

Grace: From a customer service perspective, there are notifications like shipping and delivery status, exception reporting, check-in, reorder, etc. What's important is that while I'm calling these customer service applications, practically all forms of self-service benefit the consumer and the merchant alike by lowering the cost of customer communications and, importantly, driving consumer behavior and revenue.

When it comes to pharmacy in particular, timed refills are an important example. The app can remind me that a refill is due and, once I've confirmed that I want it with a reply, I can then get a confirmation with a pickup time. This kind of interaction has a big impact on compliance. Then there's seasonal information, such as immunizations, or clinical information that you can get out to the patient. There is opportunity in all these areas and more using a rich smart-phone application.

CT: You mentioned compliance, which is clinically critical and important for creating stable pharmacy revenue. So offering mobile apps can be an important chance to influence patient behavior, right?

Grace: Yes, certainly. Mobile technology allows pharmacies to drive many consumer behaviors, especially capturing revenue - which may otherwise be lost. Strategically, pharmacies offering the widest choice in customer communication choices, will receive the most benefit from the use of texting and store-branded smartphone applications. These new methods of reaching consumers, join other convenient technologies that may already be in place - e.g., IVR prescription refill and pickup ready calls, Web refill, e-mail refill reminders with embedded web-links, etc.

And especially from the smartphone application perspective, alerts - known by several names depending on the manufacturer, including push notifications, polling, etc. - provide the most value. Alerts are what can drive consumer action, effectively moving the point of sale out to the consumers phone. A message can go out to a phone that lets the patient know there is an action they can take. They can respond right then, which creates a very efficient closed transaction.

Customer loyalty is also enhanced as consumers embrace and use these new communications channels and become creatures of habit. If we like the experience, we'll continue to use it and this drives loyalty to the pharmacy, right?

So from a prescription revenue perspective, the return on investment (ROI) from offering texting and smartphone communications is very quick. Just a small decrease in returns-to-stock, lost revenue, and pharmacy labor costs can recapture a significant amount of revenue and profit. Also in the ROI equation are additional non-prescription purchases driven by a store visit that may not have happened otherwise. Most estimates we are seeing show around $20 in additional purchases beyond the prescription.

CT: OK, so what's your take on where mobile technology is heading? What will be the drivers in the next few years?

Grace: Most everyone's probably seen the advertisements all over TV when a new device comes out, whether a new smartphone or a new smart tablet. What we end up talking about is a BYOD, or bring your own device, environment where patients will expect whatever device they've chosen to operate seamlessly with existing mobile applications out of the box. As a result, you can't afford to approach apps on a device-by-device basis. The key is offering flexible mobile architectures that can be rolled out to new devices and across mobile operating systems while also allowing new features and enhancements to be added quickly. This provides a great opportunity for the application providers, including Acclaim Mobile.

CT: What are the steps pharmacies can take right now to move into these new technologies, such as texting and smartphone apps?

Grace: The road to having a presence on consumers' smartphones and other smart devices is relatively short and, depending on the provider producing the branded application, can be inexpensive compared with device specific standalone applications.

The first step is to optimize your Web site for mobile devices, whether it for your front of store, the pharmacy, or both. This allows the consumer with the built-in browser in mobile devices, including standard feature phones, to view pages without squinting to see a standard Web page.

This is a good step to take, because it is a prerequisite in moving to a true smartphone application. Of course, some people will ask: Why do I need to move on to a smartphone app, if mobile Web is working for me? The answer is that mobile Web has its limitations. It's still somewhat cumbersome to navigate and it lacks the valuable features only available with a smart device application. What I'm talking about is access to the smart device's native features like access to the GPS, use of the camera and photo gallery, and the all important alerts.

In my mind having a feature-rich smart device application sooner rather than later is the 2011 version of needing a Web site presence starting in the 1990s. Consumers are expecting it.