My story tonight on NBR is about a trend called 'mobile coupons' - coupons you receive, not on paper, but on your cellphone. These coupons are typically sent via SMS (text-messaging), or by email (if you have a net-connected mobile phone). But it's not spam. You have to 'opt-in' to receive mobile coupons. This marketing tool is still quite new - JC Penney announced last month it would try out mobile coupons with some of its Houston-area stores. Sam's Club, the wholesale-club division of Wal-Mart, is also looking into mobile coupons. Eric Holmen, the president of mobile marketing firm SmartReply told me on the phone that only about 30 percent of the nation's national retailers have any kind of 'mobile coupon' strategy.
The question I kept asking as I researched this story is "why now?" After all, "texting" on cellphones has been around since the early 1990s. What took retailers (and marketers, for that matter) so long to see the value of mobile coupons? The answer, it seems, is a little more complex. Consumers - and businesses - have to be ready to accept a new technology, or a new delivery mechanism driven by technology. Even now, users of mobile-coupons tell us, it's not uncommon to show a coupon-bearing cellphone screen to a store's cashier, and find that the cashier may not have received the company memo on 'mobile coupons.' And there's the notion of consumer 'critical mass.' It doesn't make sense for a national retailer to plunge headlong into developing a mobile coupon marketing strategy, if the number of consumers who use them are in the hundreds.
While you'll still draw a blank from many people about 'mobile coupons' - I suspect that won't remain the case for very long. As retailers adopt this new marketing tool, so will consumers. Marketers mentioned one statistic to me which I thought was interesting. The redemption rate of paper coupons has always been low - one to two percent, by most accounts. On the other hand, we were told the redemption rate for mobile coupons is significantly higher - on the order of 10 to 20 percent. Perhaps that's hyperbole on the part of mobile marketers. If even 3 or 4 percent turns out to be correct, that's still double what paper coupons receive, and another reason why the use of mobile coupons may rise sharply in years to come.
Comments
I have found collecting and using coupons to be a major hassle on several occassions, and I prefer to look for discounts that do not require them.
The exceptions were when they were made convenient - like the local confectioner who gave me a coupon I could reuse for $1 off any order over $5 throughout the month (which I went out of my way to use several times). Also, some manufacturers placed coupon dispensers beside their products in the supermarket, again leading to more sales because of convenience.
The mobile coupons sound a little clumsy to collect and use, so I'm skeptical of their prospects. I don't care for the online coupons that require me to print out a page (that costs me at least 25 cents worth of ink) either.