Industry insiders predict consumers worldwide will redeem over $43 billion worth of mobile coupons by the year 2016, according to Juniper Research. That's an increase of eightfold from the estimated $5.4 billion cashed in during 2011. Challenges for retailers in making the coupons available, and consumers in adopting mobile couponing behavior are many, and the technology linking the two, smart phones and mobile apps, will play a part.
The jump in popularity of mobile couponing can be tied to the greater adoption rates of web-enabled smart phones by many consumers. And especially for brick-and-mortar businesses, mobile coupons may be the connection between advertisements, loyalty programs, and mobile payments. But it's important to remember that the process must be fairly seamless for both consumers and businesses alike, otherwise resistance to the changes could be significant.
Here are some of the latest trends and developments in mobile couponing.
Leveraging existing bar code scanners to read mobile coupons.
When retailers started creating mobile coupons that could be presented on a smart phone directly at the point of sale, many companies discovered a problem. The red laser bar code scanners used in grocery stores, supermarkets, and other retail stores couldn't read the coupon bar codes from the mobile phone screen. This forced cashiers to enter the codes manually, slowing down the checkout process and dampening the enthusiasm of many consumers for the mobile codes.
But that could be changing soon, because of the efforts of a California company specializing in light-based communications technology. Creating and developing new technology which enables existing point of sale systems to easily read mobile coupons from smart phone screens, the San Francisco-based Mobeam has already entered into a partnership with Procter & Gamble.
While there's still plenty of work to be done before a true all-digital coupon system is in place, retailers like P&G are excited about the advance since all the changes in technology would occur on the mobile phone side rather than the POS. And the advantages of digital coupon processing are many, including greater scanning efficiency over paper coupons, and the ability to measure campaign effectiveness after the fact.
Distributing mobile coupons via location-based services.
Another trend in mobile couponing might signal the beginning of irrelevancy for the ad circulars customers are used to seeing. Last month drugstore giant Walgreens Co. announced a plan to join with location-based social network Foursquare in sending scannable, mobile coupons to customer's phones when they check-in at a nearby store.
Designed to allow users to check-in at restaurants, retailers, and other businesses as well as connect with their friends, Foursquare may, with the advent of this partnership, soon become the go-to mobile coupon source for consumers. As the first retailer to offer mobile coupons via Foursquare, there's no opt-in or action required for Walgreens customers to unlock the coupons.
And there's no shortage of marketing ideas that could emerge from this trend. By combining a loyalty program component with the location-based check-in, customers might be rewarded with mobile coupons based on volume or type of purchase.
Offering mobile coupons over a wide variety of channels.
Currently, most mobile coupons are offered and delivered via SMS (short messaging service), also known as text messages. While this strategy makes sense for many consumers, retailers and marketers should remember that limiting themselves to just one channel of communication with customers isn't always the best strategy.
Instead consider the different ways that consumers interact with your business and look for ways to offer coupons during regular communications. For example, many of your most loyal customers never fail to open your emails. For those people, consider dangling mobile coupons via an email list. Or your customers may follow your communications via RSS feed. You can bring them into the mobile fold via that notification strategy.
Once you understand how and where your customers find and follow your company or brand, you'll be ready to show up in front of them with the mobile coupons they are most interested in.
Integrating mobile coupons into the overall mobile shopping experience.
While much of the mobile coupon experience may be consumer-driven, your goal is to be ready to show the customer a relevant offer when they take an action that relates to that product. And the process doesn't have to be complicated.
For example, when you have a customer in your store using a mobile phone to scan a product bar code or QR code and then following the link to get more information about that product, don't drop the ball. Be ready to pull the trigger and give that customer an opportunity to buy at a discount.
Like all the other pieces of your marketing plan, the more you look for ways to integrate mobile couponing into your global strategy, rather than keeping it in the "mobile" silo, the better chance you have to pull customers in.