• by Steve Smith , Staff Writer @popeyesm, February 7, 2014

Apparently I am not alone in letting RetailMeNot’s geofenced app ping me whenever I pass or enter my mall parking lot. The coupon and offers Web site has only had its app in market a couple of years, with geofencing active for little more than a year. But according to its latest financials, mobile accounted for 13% of net revenues in fiscal 2013, up 213% to $26.6 million. For the fourth quarter alone, it saw mobile account for 15% of revenues, for a 179% gain to $11.7 million. In the fourth quarter, 88 major retailers were partnering with the company -- up from 65 just three months prior.

The results show how mobile is driving growth for the digital coupon industry. For years, many of us scratched our heads over the slow adoption of mobile coupons, as consumers seemed underwhelmed and retailers fumbled at checkout to accommodate advanced users who showed them a smartphone screen to claim a discount. They make such obvious sense. But newness and the slow pace of change in retail retarded adoption. We seem to have broken through.

A number of players in the category are seeing massive growth, according to comScore’s mobile Web tracking. Coupons.com and Savings.com are seeing double- and triple-digit growth in the last year. Groupon is still hands down the leader in the category in overall traffic, but RetailMeNot saw 207% growth between December 2012 and the same month in 2013. Among iPhone apps, the company saw 353% growth in app-driven traffic, bringing it within striking distance of Groupon and exceeding Shopkick. There are similar gains in the Android app, but at even higher levels of usage.

To get a sense of the scale of usage for a premium coupon app, the company tells me that app sessions grew to 116.5 million for the last quarter, up substantially from the 16.7 million in Q4 2012. The app saw 13.7 million downloads in Q4, up from 4.5 million in Q4 last year.

Next week, RetailMeNot will be releasing a Forrester study of its impact on retail sales to companies that partner with it for deal discovery and couponing. Creating a composite company based on interviews and surveys with over a dozen retail partners, Forrester contends that the app helped generate a 6x ROI. The app helped drive traffic to all 800 stores in the composite model and helped increase average order value $10. On the cost side, the composite retailer paid an average of $20,000 per promotion for preferred placement. The fee structure calls for a 7% sales commission.

According to Forrester’s methodology in designing this composite apparel company with $3 billion in revenue, they see a 631% ROI, or a $12 million net from incremental sales of nearly $14 million from the app across 800 stores.  

The stats, while aimed at selling RetailMeNot to retailers, still suggest the sort of proof of mobile impact at retail that we need to see more of in the industry. Part of the omnichannel model has to recognize that consumers will engage offers from countless directions. I think one of the underappreciated aspects of mobility is that it reveals clearly just how variegated the consumer paths to purchase are and how personalized the channels. In other words, retailers may fantasize that all significant interaction with the customer should happen within their branded app, but it isn’t going to happen that way. In fact, an app like RetailMeNot delivers the most recent Barnes & Noble coupon offers to me when I am at the store where I need them. The Barnes & Noble app itself, which I also have on my phone, can’t even let me access the coupons the company itself just sent me by email. I still have to print them out to use in-store.

Of course this is the same B&N app that doesn’t even know who I am when I use it or what my online cart looks like, and it's still recommending romance novels for me to read.

A year ago that was a little quaint. Now it is just stupid.