What Businesses Need to Know About Mobile Coupons This Holiday Season

By PF Wilson - 01/12/2011 09:04:00

When most people think of coupons, they think of savings. However, few people realize that coupons weren’t invented to save people money; that was merely a by-product. Coupons were invented to drive consumer traffic into stores, and subsequently to specific products. History is repeating itself as mobile coupons become more and more popular with consumers, especially around the holidays.^[1]

 

Today, instead of clipping coupons from the Sunday paper, consumers can obtain their savings via their mobile device. More importantly, mobile coupons can be targeted.  Not only can coupons entice customers to purchase items or services of interest, but also deliver the coupon while the customer is near the merchant or restaurant. This is done via sites such as FourSquare, GoWalla, and Yelp. Consumers who use these social networking sites are often sent offers and discounts based on their location^.[2]

 

Mobile coupons offer even more advantages over their paper counterparts, particularly to retailers. A recent study by eMarketer shows that one in ten mobile users currently redeem coupons. That’s much greater than the rate of redemption for paper coupons.^[3] The study also found that 20 million people will use a mobile coupon this year—either from an app, mobile web browser, SMS text, or all three. In addition, the usage of mobile coupons will almost double by 2013.^[3] That’s a lot of traffic being channeled into retail locations, and there are numerous entry points through which businesses can  take advantage.

 

Nearly everyone has heard of GroupOn, the dominant mobile couponing site; however, there are about 700 other companies in the same space according to Greg Sterling of Opus Research.^[4] It’s the dream combination of right place, right time marketing. “It’s pretty compelling as a way to drive people into physical stores,” he tells Dice.com on that site’s YouTube channel, “or to give people content that they can act on.” He also notes that while mobile users are hostile to many forms of advertising on their devices, they welcome money saving offers. “Response rates have been pretty significant for offers on mobile devices,” he adds. And those responses mean foot traffic into a retail location.

 

Another advantage to retailers, according to Sterling, is that mobile coupons provide much more trackable data than paper coupons. On a website, a retailer can follow the customer through the entire purchasing process, but in the store’s brick-and-mortar locations, the data isn’t nearly as comprehensive.^[4] Mobile couponing, on the other hand, allows retailers to track the customers' shopping experience down to the point of sale.^[4]

 

The advantages are clear, as retailers can get a clearer picture of their inventory needs. This allows them to avoid excess stock, which can be very expensive to maintain, not to mention the tax obligations that can result from too much inventory.

 

Couponing, both mobile and paper, also has a somewhat hidden benefit. According to Time Magazine’s “Moneyland” blog, affluent consumers, those making more than $70,000 a year, remain the biggest users of coupons.^[5] Extending that to the mobile platform could drive prosperous consumers to spend  at retail locations with  targeted offers.

 

There are several ways for businesses to explore mobile couponing. The easiest way is via SMS (texting), according to the blog GetLimed. Business owners will need to build a database of phone numbers, though they can set up text-only numbers that can be used for consumers to request more information about their product/service. This allows them to develop a customer database based on legitimate consumer interest. Since the channel is all text, there’s no need to develop images or other display mechanisms, making SMS an inexpensive entry point.^[3]

 

GetLimed recommends several websites that can help businesses make their first foray into mobile marketing via SMS. These include mobilecoupons.com and mobilestorm.com. Both offer a way to experiment in the space, with mobilestorm.com offering metrics that businesses can use to track their coupon offering efforts.^[3]

 

Online shopping continues to increase, but people still like to get out of the house from time to time. Mobile couponing seems to be the best way to direct those folks into restaurants, stores, and other real-world locations. In fact, the next few years may have consumers returning to brick and-mortar establishments as mobile couponing increases.

References

 

[1] Jacobson, Clare. “Mobile Coupons for Holiday Shopping.” Undertheradar blog. Web. 11-18-11 <http://www.undertheradarblog.com/blog/mobile-coupons-for-the-holidays/>

 

[2] Pemberton, Joe. “The Mobile Coupon Guide.” Mint.com Web. 11-18-11 <http://www.mint.com/blog/trends/mobile-coupons-08102010/> 

 

[3] J, Jen “Simple Mobile Marketing for the Holidays: Get Your Coupon On!” GetLimed.com. Web. 11-21-11<http://getlimed.com/2011/10/simple-mobile-marketing-for-the-holidays-get-your-coupon-on/> 

 

[4] DiceOutLoud. “Marketers are Salivating over Mobile Couponing Analytics.” DiceOutLoud YouTube channel. Web. 11-18-11<http://www.youtube.com/watch?v=LRoS3TCjDsA&feature=related>

 

[5] Tuttle, Brad. “Affluent Consumers Clip Coupons. Poor People? Not So Much.” Time. Moneyland.Time.com. Web 11-21-11 <http://moneyland.time.com/2009/09/04/affluent-consumers-clip-coupons-poor-people-not-so-much/>