Facebook, Twitter Expand Pawn Market


When Michael Mack gets in a shipment of ultra-high-end handbags, he doesn’t have to wonder about the best way to move the expensive merchandise. The same is true when a carton full of distinctive Tiffany blue boxes filled with gleaming jewelry arrives.

Mack simply tweets the news to his loyal customers, many of whom will rush in to add another Hermes, Chanel or Alexander McQueen to their collection of clutches and purses. Then he adds the new accessories to his Web page, www.max-pawn. The most luxurious items also — and, in some cases only — land at the Max Pawn and Jewelry Booth on bonanza.com.

Other kinds of Mack’s merchandise, such as musical instruments, bicycles and electronics, can be found on Craigslist. Everything from Rolexes to gift cards is listed on one of the two Max Pawn eBay stores: the general store and rare finds. Firearms are on Auction Arms.

Mack’s physical store in Las Vegas is a lot smaller than the outlets he’s owned in the past. He doesn’t need the kind of display or storage space that was a necessity before esales exploded, he says. Today, the bulk of his sales originate or are conducted entirely over the Internet.

Most pawnbrokers have taken advantage of eBay to extend their marketplace for many years. True, the rise of the auction site has allowed the sale of items that have been gathering dust. But more than that, it has let pawnbrokers take in items they would have had to turn away in the past, because they wouldn’t sell in their immediate area. It also means pawnbrokers can list parts or items for repair to a universe of do-it-yourselfers, making it possible to get something out of items that would otherwise be junked.

But as a while, pawnbrokers have been a bit slower to embrace the use of social media. Maybe it’s the name — what’s “social media” going to do for a business? Quite a lot, as it turns out.

Vital Across the Board

Not all pawnshops have found the kind of high-end niche that Mack has, but that doesn’t mean they’re not prospering in cyberspace.

La Familia Pawn, with 14 stores in Florida and five in Puerto Rico, has tweeting, email and Facebook programs set up, and has even cracked Groupon. And it’s not forcing itself on the market.

“Our customers were away ahead of us in using technology,” says Jennifer Whitcomb, social media coordinator for the chain.

Facebook has been the most successful for them, especially among Puerto Ricans, she says. “They really embraced it,” she said. Customers use Facebook to ask if a certain product is available, of if the store accepts a certain kind of merchandise in pawn.

Some pawnbrokers might be surprised at the social media audience, she adds: age is across the board. “It’s not just the young adults you’d expect.”As La Familia’s experience might indicate, if you think that minorities are less likely to use technology, you’d be wrong about that, too.

Take cellphones, for example. According to a study released in August 2010, African-Americans use the most voice minutes — on average more than 1,300 a month. Hispanics are the next most talkative group, chatting an average of 826 minutes a month. Even Asians/Pacific Islanders, with 692 average monthly minutes, talk more than Whites, who use roughly 647 voice minutes a month.

African-Americans and Hispanics also text — that is, use Smart Message Service — the most. Hispanics send and receive around 767 SMS messages a month while African-Americans send and receive around 780 — significantly more than Asians/Pacific Islanders (384 texts a month) and Whites (566 texts a month). The voice and text results are compiled from one year (April 2009-March 2010) of mobile usage data gathered by the The Nielsen Company, which analyzes the cellphone bills of more than 60,000 mobile subscribers each month in the United States.

A separate Nielsen survery conducted in December 2010 found that almost a third (31 percent) of all mobile phone users in the United States own smartphones, but their adoption is higher among specific minority groups.

Nielsen found that 27 percent of White mobile phone users in the U.S. currently own smartphones. But that rate was lower than the 45 percent of Hispanics, 45 percent of Asians/Pacific Islanders, and 33 percent of African-American mobile users polled who said they have a smartphone.

The adoption rates for smartphone ownership are also rising, especially among minority groups. Over the six months before the survey, 42 percent of White users who bought a mobile phone opted for a smartphone, while 60 percent of Asians/Pacific Islanders, 56 percent of Hispanics, and 44 of African-Americans made the same choice.

In all, according to CTIA, the wireless association, by December 2010 Americans were sending 187.7 billion texts each month — that’s 2.1 trillion annually. The group adds that 264.5 million data-capable devices, including 61.2 million smart phones or wireless-enabled PDAs and 12.95 million wireless-enabled laptops, notebooks or wireless broadband modems, were in the hands of consumers as of June 2010.

Texting Outreach

So what do you have to do to reach your market by text?At the recent Consumer Financial Services Association convention in Florida, Mike Cantrell, president of Solutions by Text, made two major points: you need to update your customer agreement to include a specific SMS policy, and you must always let your customers opt out at any time. Once you get the legal policy out of the way, then set up language templates, Cantrell says. “Begin by indicating the source — your company name — of the message first, the offer or primary info should come next, and the method of redemption of contact info completes the message. Always include an opt-out option.”

When developing your language templates, build around your business model. For instance, you might set up a welcome/thank you; a five-day reminder; a one-day reminder; extension request and re-marketing messages, Cantrell says.

Be sure to use technology to verify cell numbers. Automatically send your customers a text telling them, “For your convenience we provide courtesy reminders and other updates by text. The next step is to confirm your cell number. Confirmed numbers will receive an immediate text reply with authorization code.” Then the message will ask the customer to enter his or her cell number, followed by the authorization code included with the text message.

It short, it’s clear that the days when eBay would be the beginning and end of your online sales effort are over. It’s a big technological world out there, and pawnbrokers can benefit from it.

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