Coupons, Mobile, And The Path To Purchase

by Jeff Weidauer , August 12, 2010

Last October, media marketing firm Greystripe released a study of working moms who use their iPhones for everything from banking to social networking to making purchases. Dubbed the "iPhone Mom," this audience segment depends on the iPhone for managing their lives to entertaining their children. Just over half use their iPhones at the supermarket, according to the study.

Of this very active group, only 19% are downloading coupons, trailing by half those who use it to track their shopping list (41.9%) and those who comparison shop with it (39.4%). This survey was taken late in 2009 when the economy was even less stable than today; one would expect coupons would be high on the list of activities for dedicated iPhone users.

There is a lesson here for marketers: Using the latest technology to deliver old-school promotions isn't going to work. Even with the growth of coupons in general over the past couple of years, and the plethora of providers for mobile coupons, this combination has yet to make any real headway. There are a number of reasons for this lack of engagement from shoppers.

First, coupons themselves are not the most effective way to drive sales. Much like lowering prices, they are just another method of temporarily "buying" sales, doing little to drive loyalty. Secondly, there is a more practical concern -- the delivery of the coupon itself. To date, most mobile coupons place a barcode on the screen of the mobile device.

What happens if I want to redeem three or five of these? Sounds complicated. And the very personal nature of the typical mobile device (many people keep it next to their bed) makes the idea of handing it over to a stranger to scan unattractive, to say the least. Finally, cashiers probably aren't enamored with the idea of handling all those phones.

The better option is to think about the "mobile path to purchase," which really begins outside the store. How can marketers help the shopper accomplish her task in a more effective manner that grows sales and drives loyalty? Instead of coupons, let's go beyond that and look at the possibilities of what this technology can do for the shopper and the retailer.

The iPhone is a location-aware, hand-sized computer with always-on connectivity, a camera, and the ability to use dedicated applications. This applies to all smartphones, but we'll stay with the iPhone Mom cohort for now.

Imagine a shopper using her iPhone at home to scan products in her pantry and refrigerator that are in need of replenishment. She adds them to a basic list of regular "fill-in" items that the mobile device stores inside a dedicated application provided by a retailer. This also ties to her loyalty account and, from there, the application adds in relevant offers based on her shopping history and complementary items on her list.

The list reorders itself based on the layout of the store she decides to visit, or she could send the list (and the associated offers) to someone else's phone to shop. Once in the store, she buys those things on her list, and she scans a QR code -- using the built-in scanner in the retailer application on her mobile device -- to find a good recipe for dinner, and a wine to accompany it. Finally, when checking out, all those offers are automatically credited based on her purchases through her loyalty account.

All of the technology to accomplish this level of engagement with the shopper exists today, and bringing this vision into reality requires a willingness to think differently more than anything. The time is now to make the commitments necessary to move beyond coupons and into the 21st century.

commentary, coupons, mobile, retail

4 comments about "Coupons, Mobile, And The Path To Purchase ".

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Noah Sacksteder from Riviera Broadcast Group, August 12, 2010 at 4:59 p.m.
Actually, it's not very futuristic since almost every feature you describe is currently available in the iPhone app called Grocery iQ, you should check it out.
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Bill Deletto from Zavenetworks, August 12, 2010 at 6:09 p.m.

Just a few comments---providing incentives where consumers can find them within their digital lifestle is an approach to leverage the reach web reach potential.

Secondly,designing an intelligent platform which links a digital promotion to a physical sale at retail will enable marketers to better understand promotion incentive behavior and results. This will further contribute to brand loyalty measures.
Linking all screens,web,mobile and TV as well as off line digital promotions thru texting will create a sufficient way be better understand overall path to purchase.

Third,paper less incentives sent to mobile device or enabling consumers to source paper less offers from mobile is a better way to speed in lane transactions--use shopper card and discounts come off receipts instantly.

Fourth-coupons contribute to brand loyalty measures--there are enough case studies to prove this--ask P&G when they conducted a no coupon test in upstate NY in 1996. they lost share in 14 0f 16 categories. Coupons contrbute to brand loyalty but is not the only method--it is part of a mix. Brand Loyalty is not absolute--it is more to degree--and behavior shift makes big differences in sales results--coupons trigger a behavior shift. Two third of US buyers are value conscious meaning they buy on price or with an incentive---and that is not going to change--brands can not sustain themselves with the 1/3 of shoppers who buy on full price....and that is fact. Coupons also serve many other important brand building purposes too--they will never go away----now that digital incentives can be measured to a retail sale instantly--incentive use will improve and lead the way to more complex promotions to get consumers to buy ---like continuity or points and rewards etc.

Cynthia Christopher from Prime Choice Entertainment, August 13, 2010 at 1:32 a.m.

It never ceases to amaze me when men try and write about a working mom's experience in a grocery store. First of all most grocery store clerks in my area (and I go to major chain stores in a major market) Don't even know what a mobile coupon is let alone how to scan your cell phone to redeem it. Coupon's on your smart phone aren't useable in a grocery store without downloading them on your loyalty card. Also, most working moms don't have the time to scan their grocery shelves when they're full dear, and when you do you mostly get sent to an online store and quite frankly I'm not ordering my toilet paper online.

Lisa Foote from MixMobi, August 13, 2010 at 2:17 p.m.

Using grocery / discounter big box as the only mobile couponing (or promotion) venue is problematic. Yes, there are unique challenges to CPG-big box promotion and redemption.
There are worlds of commerce beyond this universe that are quite well suited to mobile couponing and promotions. In many situations (for example, an airport), merchants simply want to drive traffic. They may be perfectly happy with a POS soft key that's always used for the current mobile promotion. Redemption problem solved.
Jeff, I agree with virtually all your point regarding grocery / big box. That situation does cry out for a more sophisticated answer. But don't throw out the mobile coupon baby with the big box redemption challenge water.