The Rise of SMS Mobile Coupons

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A text from Target today reminded me that my mobile coupons were about to expire, suggesting that if I’ve lost them to text OFFERS to Target and they would be re-sent to me.

I had not so much lost them but missed them in some past text messages. Sure enough, Target responded right away and re-sent a link to their latest ‘personalized’ coupons.

The coupon headline: “It’s time to save big on Valentine’s Day gifts and more.” Wait. What? I know I was at the MediaPost Mobile Insider Summit last week so missed Valentine’s Day in person, but this notice just seems a bit, uh, dated.

On the positive side, the Target SMS coupon deals provide clear cashier instructions and the barcode scanners at checkout actually will work with a mobile phone, which is better than at many other retailers. But an SMS promo for a holiday five days later?

The reality is that many consumers, especially women, want to receive SMS-based coupons on their phones, with 42 percent citing that preference in a recent study by Radium One.

And even though many checkout systems still can’t scan barcodes from phones, most women (52%) prefer cashing in coupons by flashing their phones, according to the research.

“With 97 percent open rates, mobile coupons delivered via SMS/MMS offer the single most impactful way to deliver an incentive to a consumer,” says James Citron, CEO of MMS pioneer Mogreet. “Our retail partners have found that MMS coupons routinely drive four times the in-store traffic of coupons delivered via email.”

Mobile consumers, for the most part, are still relegated to cashing in mobile coupons by printing them or showing their phone, hoping the cashier knows what to do, even if their checkout technology doesn’t.

The good news is that mobile payment systems such as Square at retailers like Starbucks are helping educate mobile consumers on how they can use their phones to be scanned and receive value.

At least I’ll be ready for Presidents’ Day mobile SMS coupons, likely coming at the end of this week.

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7 comments on "The Rise of SMS Mobile Coupons".

1. Paul Tomes from PassKit
   

   commented on: February 19, 2013 at 8:15 p.m.
   Many of our clients and partners have experienced a far better coupon redemption rate (and increased customer base) when they combine SMS/MMS coupon messaging with Passbook passes. They send a PassKit Pass link within the SMS/MMS and then when the customer/prospect opens the SMS/MMS they have the option to quickly and easily store the 'coupon' as a Passbook Pass in their smartphone (and they don't lose them among all the other text messages- as you experienced). They then experience the convenience of location and date reminders (displayed on the lock screen) as well as all 'offers' stored in one place (their native smartphone wallet) Any business can quickly create and distribute Passbook Passes to all smartphones (not just iPhones), whether via SMS/MMS or other distribution means (email, app, website, QR codes etc..) by using the Pass Designer at create.passkit.com
2. Chuck Martin from Chuck Martin
   

   commented on: February 19, 2013 at 8:49 p.m.
   Great idea about including them within Passbook, Paul. Curious, are you finding more usage via iOS or not?
3. Paul Tomes from PassKit
   

   commented on: February 19, 2013 at 9:32 p.m.
   Chuck, Great question and in all honesty it depends. Across all Passes worldwide, it's currently around 90% usage on iOS. That is changing over the last month and we have seen more uptake by Android users since PassWallet integrated push updates for all PassKit passes. (so now PassWallet is very similar in functionality to Passbook, albeit device owners still need to download an app, unlike iOS6 users). For some clients, where they are actively marketing Passes to all smartphone users, the usage can be as much as 50/50 (ie 50% usage on iOS and 50% on Android). We are only seeing a handful of Blackberry or Microsoft users - although PassKit Passes can be used on any smartphone.
4. brian riker from A. Eicoff and Company
   

   commented on: February 20, 2013 at 10:50 a.m.
   This is certainly something our CPG direct response clients are relying on more and more, not only are they seeing an increase in sales which pleases themselves and their retail partners but the "text to receive" response mechanism is allowing them to track response accurately from their ads in a way that CPG's have never been able to.
5. Chuck Martin from Chuck Martin
   

   commented on: February 20, 2013 at 12:46 p.m.
   Thanks, Brian; are they also seeing a segmenting of the market, that is, more active of higher-buying customers responding to SMS/MMS or more across the board?
6. Ariya Priyasantha from 2ergo
   

   commented on: February 21, 2013 at 8:07 a.m.
   Although I agree SMS has a great response rate, - (we run Orange Wednesdays in the Uk and so we're well aware of the phenomenal response rates), the biggest issue we have found with SMS/MMS coupons is how do you redeem them at the Point of Sale? Passbook is cool to centralise coupons in one place for the consumer, however the retailer can't scan them in unless they have a special optical scanner (most retailers don't), and also they need to upgrade their POS system to feed that code back to Passbook to strike it off. We have a solution called podifi that makes it easy for retailers to adopt without upgrading their POS - just plug in a low cost, and vey small hardware device into the cash till. It's really simple for consumers to use, and we don't use NFC, so it works on all smartphones right now. What we've found with our customers, is most people who redeem are on iOS (about 70%), and the most popular offers are for everyday lifestyle items like free coffee.
7. Chuck Martin from Chuck Martin
   

   commented on: February 21, 2013 at 11:04 a.m.
   Point of sale is a very big issue, as you point out Ariya. And you are right, many of the scanners don't work with phones. That sounds like a high iOS redeem rate, any insights on why?

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