Mobile Coupon Redemption Rate Will Reach 8% By 2016

American-Eagle-OutfittersThe mobile coupon model that has rapidly taken hold in the Far East and China will migrate to U.S. and Western European markets over the next few years, helping to drive worldwide redemption rates to 8%. Juniper Research is projecting that by 2016, 600 million people will be using mobile coupons as these promotions become an effective tool for consumers and brick-and-mortar retailers.

When tied to the kinds of personal, geotargeted promotions that mobile platforms allow, these promotions can drive traffic into stores in ways that paper and online coupons cannot, Juniper argues in a new report. The total redemption value of mobile coupons will rise from $5 billion in 2011 to $43 billion in 2016.

Report author and Juniper analyst David Snow notes that while mobile coupons are poised to reach redemption rates that far exceed the typical paper and digital rates, the road to achieving this goal may be uneven. Consumers and retailers will need to go through a period of experimentation with offers and delivery formats.

In just the last few years, new promotion and couponing models have emerged via daily dealers like Groupon and LivingSocial for whom mobile has become an important marketing and delivery mechanism. Coupons are also being delivered across multiple means, from SMS and MMS to mobile Web, apps and now Near Field Communications (NFC). Snow says an initial burst of interest and strong redemption may be followed by a decrease as consumers, marketers and retailers settle on consistent channels.

Snow says: “As with all new mass markets, there is an initial ‘shakeout’ period. North America and Western Europe are at that stage now. For the next few years, users will be signing up for multiple coupon schemes and deciding on the ones they like best.” He recommends that this be approached as a crucial time for brands and their agencies to establish a loyal base of users they can direct to the appropriate channels. 

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