Commentary

The Return Of The Sunday Circular

There are few sure things about the future of mobile marketing. The long-term effectiveness of micro-banners, 2D scan codes, branded apps, SMS interactivity, near-field communication technologies and the like are all open and interesting questions. If there is one model I would put my money on, however, it is mobile couponing. Few traditional marketing formats map so well to the phone. Instead of clipping, storing and remembering to carry these paper savings certificates, a mobile device makes it so much easier to locate the right discount and use it on the spot.

I have already recounted in earlier columns my devotion and then disappointment with Borders Books when it started, then abruptly stopped, a program that sent member discounts both to my email inbox and my phone. Ideally, I want to be able to walk into a store, flip my phone and find and use the relevant coupons for my location.

We are getting there. While individual brands are maintaining direct relationships with consumers to drive coupons to the phone, the coupon aggregators are reviving the old Sunday circular model and weekly "Clipper" circular for the phone. Cellfire started the model years ago by trying to aggregate vendors like Hollywood Video and Sears into a single couponing app. When it started I was critical of a model that required users to access a downloadable app that contained a limited and seemingly arbitrary range of coupons. Deck distribution and vendor partnerships always seemed to be the chokepoints. But now that the open app marketplace has proliferated, that Sunday circular model makes more sense.

advertisement

advertisement

On the iPhone I have downloaded and played around with several coupon aggregators. Cellfire remains a disappointment to me for its narrow coverage of vendors and underwhelming interface. Basically the app sorts and saves offers, forwards to a friend, and tracks the number of times you use the coupon.

To be fair, Cellfire seems to be targeting the grocery store market, and many of its partners seem to be outside my area. There is a very cool aspect to the grocery model. Cellfire lets me save the offer to a Safeway member card so that it will show up at the register when my store card is swiped. This method is not as cumbersome as rifling through all of one's mobile coupons at checkout.

The well-publicized Yowza couponing app (A "Heroes" cast member is involved) has a cooler interface but also suffers from limited vendor involvement. I got three stores in my 15-mile radius (Pier 1, Sears and SportsAuthority). The listings are more attractive than Cellfire's, but the same functionality is here. I get a link to a map as well as direct-dial to the nearest store. However, it's all pretty basic stuff, and its utility is entirely contingent on the partnerships, which still seem sparse.

Coupon Sherpa tries to solve the problem of limited vendor cooperation by aggregating Internet coupons that are relevant to your area. So this app actually lists scores of local offerings from the Web. It does a fair job of geo-locating the relevant stores but it pops me over to the Safari Web browser to access the coupon. This is much less convenient than having the coupon in the app itself. All I can do is save the store for later reference. What I gain in coupon coverage I lose in usability and convenience.

I am not entirely sure how much of the MobiQpons catalog of vendors represent direct relationships and how many are scraped from Web offers, but the interface is more streamlined than most of the others in the category. It is easy to add vendors and specific offers to a favorites file. The coupons themselves come up in a dedicated browser, although they often seem too small or fuzzy to be scanned. In its FAQ, MobiQpons warns that some checkout people may not accept the coupons and you may need to email them to yourself and print them out. I will have to try it out on my local Borders checkout fellow because my old favorite reappears in this app.

The four mobilized coupon circulars I have tried are obviously flawed, either in coverage or ease of use. But even if they do overcome their limitations in interface and coverage, they all still risk invisibility on the deck. The coupon circular model for mobile couponing has inherent weaknesses. First, you have to drill through a number of vendors just as you did in the dead tree and ink circulars. And you need to remember the thing is available.

I am surprised that none of these iPhone apps is leveraging the alert system yet or being even more granular in their use of geo-location. Shouldn't I be able to get a store-specific alert when a new Borders coupon is there? Or shouldn't GPS know precisely what store I am in, so specific coupons float to the surface? And why aren't more of them integrating the map as an interface yet? It would seem that the local ratings and reviews services like Goodrec and Yelp already have a leg-up in this regard, and we are just waiting for a map-driven coupon app -- unless there is one in that 50,000-app mosh pit I missed. At some point Yahoo or Google or one of the directory providers has to tumble to the opportunity of overlaying store coupons on maps.

We will get there, I am sure. I can't quite tell yet how these services plan to differentiate themselves to the consumer or the marketer, however. Some apps are smoother than others, and no doubt there will be a land grab for partnerships.

But for now the category, several years into its evolution, still feels under-imagined and kludgy. There must be greater value-adds somewhere in this model for both ends of the chain, buyer and seller. Cellfire's integration with the savings card is a smart innovation. I am curious what other marketing and promotional services these vendors will start dreaming up.

Just consider the original model. Sunday circulars were occasions for advertising, not just coupon distribution. Placement, prominence, timing to sales and seasonal events -- all helped drive the experience. Rudimentary as it is now, I am sure that coupon aggregators will catch up with the real-world analog that informs them.

8 comments about "The Return Of The Sunday Circular".
Check to receive email when comments are posted.
  1. Shelly Kramer from V3 Integrated Marketing, June 30, 2009 at 1:37 p.m.

    Terrific article, Steve. Great insight and I'm with you ... it's only a matter of time. Thanks!

  2. Hugh Jedwill from Mobile Anthem, June 30, 2009 at 1:41 p.m.

    Steve, you've done a great job reviewing the better-known mobile couponing solutions. I also like your reference to Sunday circulars. Do you find it interesting between the two big coupon books (called FSI's within the industry) we don't see either of them presenting a mobile solution? I've been in talks with one of them and they admit that mobile is the solution for the future. But they can't get the organization out of the old "newspaper" mentality. Sad.

    There are over 3 billion coupons redeemed annually. 1/8 of them are the closed-network coupons, like the Urban Outfitter's test and Sears, Borders and the others you mention. Almost all of mobile coupons today are targeted to these. 7/8 of the coupons are from the Sunday FSI books. These represent the big consumer goods companies. There have been some testing of these but nothing that's currently in the press will work.

    That is because the manufacturers like Unilever, Kraft, P&G, General Mills, etc. all pay for these coupons and need to see a corresponding lift in sales to justify the spend (basic ROI stuff here). As a former brand marketer, I can tell you that we look at and evaluated this continuously to watch for the payout. A single FSI coupon can easily cost into millions of dollars.

    The problem with today's solutions is that NONE of them solve for this incremental sales lift that the CPG companies need to see. Currently, a shopper will load the coupon at home onto their mobile account and then gets redeemed at the store register. However, the mobile interface needs to work in front of the shelf where the shopper makes her decisions. She looks at the brand options, looks at her coupons, determines the best value and then decides what to pick.

    In the model that Cellfire and most others use, the shopper never realizes what's on her mobile coupon wallet until she sees it show up at the register. This is too late. Too late to influence the shopper's decision, too late to create the lift in sales for the CPG company. For this reason a new model is needed. A handful of companies are working on it, but it's necessarily more difficult. This model incents not just the retailers but also the CPG companies with a sales lift.

    Keep your eyes/ears/keyboard open for this. When it happens (which will be soon) this is what will truly make coupons a mobile version of the Sunday circular.

  3. Brian Elkin from valpak, June 30, 2009 at 2:01 p.m.

    valpak.com has local relevant coupons and grocery coupons that are also available on your PDA. Easy to access by category and scannable.

  4. Paula Lynn from Who Else Unlimited, June 30, 2009 at 2:07 p.m.

    I see this as a major organizational problem for the consumer. Not so much for an individual store, but as aggregating individual products along with store item promotions on a weekly basis. Example: 3 different coupons for 3 different brand sizes and choice of soup along with whatever the store has on sale. Which one has the value to purchase to put in the cart where a decision is made in seconds. (All 3 will probably not make it in.) The mobile screen is so tiny that it's hard enough to read what one says, let alone 3+ more at once to compare. An e-reader opportunity? And you know, ease of use is an abrakadabra of monitization.

  5. Jon Erdahl from 3D MediaVentures, June 30, 2009 at 4:17 p.m.

    Superb work Steve. Your Borders example drove me nuts as well. Could not believe they would treat loyal customers like they have. Bottom line, when I was working a multi-platform deal with a soft drink company (years back), I came up with a cross-marketing piece between the soft drink company, radio, and a radio web site. You could secure the coupon through codes (on air) or as part of a frequent listener club. You secured the coupon, it appeared on the phone, and you hooked in the deal at the Point of Purchase location. Instant metrics with happy customers and larger budgets next avail. If done correctly, and using creative partnerships such as this radio example, it became win/win for everyone. Jon Erdahl 3D MediaVentures

  6. Jim Dugan from PipPops LLC, June 30, 2009 at 9:48 p.m.

    I gotta comment before I go to bed, folk ~

    Steve, I responded to you before, so my wife asked me why you didn't mention my advertisers' mobile site www.GripOffs.mobi and I said, Honey, (sometimes I also call her wiseass like I chewed you out for calling your daughter months ago, 'cause she didn't want to go to the iPhone and be like you - wait in line at 4 in the morning for an iPhone) - but, I said, Honey ~

    Anyway, we're just a few short weeks from being nationwide, and, unlike some of the other companies you've mentioned, our focus is local advertising anywhere in the world.

    The difference between ours and the others is that we let the businesses create their own ads with barcodes, change them at will, see instant results, and really are not as grocery oriented - more entertainment type.

    Steve - Enjoy your articles - Everybody, enjoy your holiday - check out the site sometime at your leisure.

    We'll be unveiling a full site at www.GripOffs.com with a calendar of events and a blog in the next couple months which will coordinate with your mobile.

    We'll be in your city, soon!

  7. Henry Winter from SmartClub Member Media, June 30, 2009 at 9:57 p.m.

    We've been doing mobile couponing here in Shanghai since 2001. From that time until today, the same fundamental issue prevents serious uptake - retailer POS investment, especially staff training.

    The key issue is not on the consumer side, distribution, brand, or even retailer economics. The key challenge is that retailers are not set up to process virtual coupons of significant value (e.g. coupons that would be attractive to consumers).

    A "normal" paper coupon can be treated just like cash. It can be put in the cash register drawer just like money by the minimum-wage staff, and can be counted at the end of the day by the store manager. Paper coupons are difficult to fraudulently reproduce, so retailers feel comfortable to issue higher-value coupons, especially if they can limit distribution to one channel.

    A virtual coupon, however, presents many operational problems for a typical retailer. There's no physical record to put in the cash register drawer. Theoretically, the retailer could re-program a key on the POS to account for the coupon, and then train staff how to use that key. That is a significant annoyance, and most retailers won't do it unless they have a guarantee that the forthcoming traffic will make it worthwhile. It's even more unrealistic to ask minimum-wage staff to carefully check each consumers' mobile phone to ensure the coupon was genuinely received, rather than forwarded from a friend - especially in fast-moving retail environment like F&B.

    The reason 2D barcodes work well is that there is an easy-to-use reader that instantly "beeps" the code in - validating and providing an easy record for the store manager to check. Unfortunately, that requires an infrastructure investment - not only for the device, but of precious counter space.

    For mobile coupons to take off, they need to be paired with retailers with a very modern, centralized POS system. Coupons need to have an easy-to-scan barcode, so they can be treated like any physical product by staff and system. The POS system needs to be able to instantaneously verify the coupon's validity, which usually implies a secure internet connection. Very few retailers can do this now.

    It's important to remember that the client's well-educated marketing director is NOT the person working the cash register! That same client's Operations department has the responsibility to ensure a smooth and secure retail checkout experience - they will get heavily penalized for problems created by a new coupon process, and get no credit for the sales uplift created by the brilliant marketing director.

    Thus the typical mobile coupon is "Save 10%" - a discount offer that the retailer is effectively willing to give to ANY consumer - and therefore not attractive to the end user. These low value coupons don't require special processing, and the retailer doesn't mind at all if they are "fraudulently" forwarded - it's free advertising. But again, takeup is very low, because of the low value.

    When will retailers be willing to make the staff and infrastructure investment? When the consumer mobile coupon base is big enough to justify it. Chicken/egg may be frustrating - but that's the reality.

    Our solution here in Shanghai? Very short-term promotions, like a "weekend blowout sale". The mobile coupon entitles the user to a huge discount, meaning that couponless consumers typically won't participate, which makes the checkout easy for staff - every consumer is using the coupon. The retailer gears up for a one-off processing effort, which is justified by massive promotion via newspaper and web. Because the sale duration is very short, there's no "hangover" problem from fraudulent distribution.

    Best regards from China :)

  8. Maryanne Conlin from RedRopes Digital/4GreenPs, July 1, 2009 at 11:13 a.m.

    Great insights but I'm concerned. If mobile couponing gets smoother and consumers get more organized, redemption rates will go through the roof, which makes this a less cost-effective marketing tactic for manufacturers.

    Yes, it will still be an excellent tool for trial but as a stratagy for incremental sales lift, it could get cost prohibitive.

Next story loading loading..