Electronic Couponing Takes A Big Step Forward
It’s not difficult to predict that a press release about a future trend or product is going to have a big impact if it’s issued under the logo of, say, Wal-Mart or Procter & Gamble because of their sheer muscle mass. Yesterday’s announcement that P&G is going to partner in a new e-couponing technology is the answer to a problem that most of us probably didn’t know existed (although we wondered why scanning smartphones at the checkout counter really hasn’t caught on at the local Piggly Wiggly).
“In this world of mobile boarding passes and QR codes, I had no idea that this was such a hard thing to do,” writes Smart Planet blogger Heather Clancy.
Here’s the problem, according to the release by P&G and mobeam, a Cupertino, Calif.-based startup that recently concluded a $4.9 million round of financing: “While smartphones are supporting users and simplifying life in a host of new ways, until now, phone couponing has not been an option because barcodes displayed on mobile phone screens are invisible to commonly used in-store laser scanners.”
Mobeam has figured out a way to convert the barcode data on packages into a beam of light –- called mobeams -- that can be read by the scanners already installed at most checkout counters.
“Hey, what’s the big deal?” you may be saying, too, “I already feed my caramel macchiato habit at Starbucks this way.”
It’s true that Starbucks has “enabled 26 million mobile payment transactions this year alone,” writes Tricia Duryee in All Things Digital, “but few people realize that Starbucks had to replace all of its scanners in its stores for the app to work.”
There is a hitch here that the imprimatur of P&G will help to overcome. Mobeam has to convince smartphone makers to embed its technology into its devices.
“Mobeam says it is working with handset makers so that tens of millions of phones hitting the market in 2012 will include its technology, though it declined to say what device makers it is in discussions with,” writes Hannah Karp in the Wall Street Journal. “Samsung Venture Investment Corp., the venture-capital arm of Samsung Group, a large maker of mobile devices, recently invested money in mobeam.”
The partnership with P&G will explore and test the technology, which will enable forthcoming devices to work with legacy red laser barcode scanners at the point of sale.
"Our vision with P&G is for the mobeam technology to be used and leveraged broadly by many leading CPG companies, with P&G and other key consumer goods partners as first adopters," says mobeam CEO Christopher Sellers.
"We are excited about the potential for this new technology and our partnership with mobeam to make shopping simpler and faster for consumers. Couponing is a great way for shoppers to try new products or save on the trusted brands their families have come to love,” says Jeff Weedman, P&G’s VP Global Business Development.
More than 300 billion coupons are currently distributed in North America every year, representing a $3.7 billion slice of the consumer packaged goods market. Redemption had been steadily dropping since 1999 from a high-water mark of 4.6 billion redemptions to 2.6 billion when recession hit in 2008.
If you’ve ever tried to navigate something like A&P’s Freshnews couponing system and electronic flyer program –- which requires multiple clicks and the need to print out a physical coupon for what seems to be a measly ROI –- you may feel that sitting in front of a Sunday FSI with pair of shears is probably still a better way to do things.
I envision a system in the future where, on a simple level, you can enter certain keywords like Luvs or Snickers or kumquats and get coupons for such products sent automatically to folders on your device. Better yet, hold the phone up to the barcode of a product and let it retrieve whatever’s relevant –- including competitor’s deals. And if this is what I’m coming up with, there’s no telling what the people who really know what they’re doing are working on out there.
Coupons are poised to continue to come back, writes Todd Hale, SVP, Consumer & Shopper Insights at Nielsen. Hale sees real opportunity to reach beyond Caucasian households, which currently represent 75% of redemption, and into Hispanic and African American households with targeted promotions.
“The potential pay-off -- in terms of volume growth and winning new customer loyalty -- can be significant,” he wrote in an analysis in April 2010. “In addition to expanding the appeal of coupons in general, manufacturers and retailers would do well to target enthusiasts…,” he writes. “With advancements in coupon delivery vehicles that enable both better targeted coupon distribution and redemption, manufacturers and retailers will continue to have real opportunities to use coupons to drive sales for the next few years and beyond.”
More than likely, the announcement yesterday by P&G and mobeam represents a major advancement in a vehicle that will deliver big time down the road.