M-coupons may be inevitable for digital marketers

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By: Wise Marketer Staff |

Posted on October 2, 2013

M-coupons may be inevitable for digital marketers

Marketers are increasingly seeing the mobile channel as a necessary extension of digital marketing, with online and mobile campaigns increasingly being run together. But the real successes of tomorrow will lie where companies help their customers in everyday life, according to Oliver Felstead, managing director for Coupons.com UK & Europe, who here examines at the evolving UK coupon market and dispels some surprisingly common myths.

Recent PwC/IAB figures showed that mobile advertising spend has broken through the £1/2 billion barrier for the first time, while Mark Zuckerberg declared Facebook "a mobile company". To date, across all sectors, the focus has been on mobile advertising - but companies need to look past the hype and ask themselves a simple question: do consumers really want this?

As Bob Greenberg, RGA founder, said: "What works in mobile is things that are useful". Success will therefore come, says Felstead, where companies are able to deliver solutions that help people in their everyday lives and are easy for customers to use.

To understand why, Coupons.com has examined the evolving UK couponing market and dispelled the most common myths about it, as follows:

  1. "The only way is Mobile" There is a growing misconception that mobile is not just the most effective form of couponing, it's the only way to go. The rapid advances of mobile technologies have certainly convinced many marketers that mobile is 'sexy' whereas paper is simply functional and old-fashioned. But whilst mobile couponing will undoubtedly bring many benefits in the future, the grocery sector faces some very different challenges to other sectors within retail, and mobile uptake will naturally be slower. In many respects, in the supermarket environment, paper still trumps mobile at present - particularly from a customer experience perspective.

    For example, research shows that paper coupons are particularly useful for providing a physical 'trigger' to the customer, reminding them to redeem their coupons in-store. Almost three quarters of people (72%) that receive paper coupons keep them in a specific place - such as on a fridge or a pinboard - so that they don't forget them when they next go to the supermarket1. However, when the coupon is moved into the mobile domain, it becomes virtual - and that important trigger is lost.

    Likewise, when it comes to speeding up supermarket queues, it might be natural to assume that a mobile coupon would be faster for the customer to locate in a hurry. However, 46% of consumers say they would find it harder to locate digital coupons on their mobile phone at the point of sale1. Only 18% believe that paper coupons would present a greater challenge1. This not only has an impact on the customer experience, but it is also has implications for retailers who are understandably keen not to slow down progress at the checkout. Although customers may complain that tearing out coupons from a DM pack - or printing money-off vouchers at home - can occasionally be a hassle, by the time they reach the supermarket environment, paper is fast and effective to process at the tills. As such, paper is mutually beneficial to both shoppers and retailers alike.

    Lastly - if you want to keep customer frustration down to a minimum, the universal acceptance of print coupons issued by brands means that paper remains the most straightforward medium for customers to use. Brand-led print coupons are valid everywhere; from major supermarkets to independent and convenience stores. The industry has worked hard to allow consumers to redeem print coupons across the whole trade rather than via specific retailers - and it's proved very effective. Mobile solutions, however, tend to be retailer-specific - a far cry from the retail-wide acceptance that paper coupons currently enjoy. Until the infrastructure is universally in place to process and clear mobile coupons right across the trade, paper will continue to be an attractive couponing solution for consumers.  

  2. "The mobile movement will be industry-led" Despite rhetoric to the contrary, it is highly unlikely that retailers and manufacturers across the grocery sector will collaborate to develop a uniform, industry-wide infrastructure for mobile couponing. The mobile movement will be led by individual retailers, many of whom have already invested heavily in the development of loyalty programmes to communicate with their members - and are now looking to enhance it by exploiting digital and mobile channels.

    Many retailers currently spend a large share of their direct marketing budgets mailing money-off coupons and vouchers to their top-spending loyalty card members, typically on a quarterly basis. Despite this significant outlay, as many as half of schemes' members miss out on promotions as retailers cannot justify mailing all customers. These retailers therefore have a vested interest in moving their coupon and voucher promotions to digital channels as it will not only reduce their costs, but it will also enable them to communicate more frequently with their whole customer database. Clearly, mobile couponing has a major role to play in supporting retailers' loyalty marketing efforts.

    But, in a competitive marketplace, the major supermarkets are unlikely to seek a consolidated solution - not least because some retailers have undoubtedly got a head start on others. Loyalty programmes such as Nectar, Tesco Clubcard, myWaitrose and Boots Advantage Card have little incentive to level the playing field and help give their rivals a competitive edge.

    For this reason, the development and implementation of an industry-wide mobile coupon solution serving FMCGs may not ever happen. Moreover, it is unlikely to mirror trends in the high street retail sector where consumers are able to add a branded coupon to their mobile wallet and redeem it anywhere across the High Street.

    This shift will undoubtedly change the dynamic between brands and retailers - with the former required to go into partnership with the latter if they wish to optimise the mobile opportunity. It appears inevitable that retailers will build their own mobile models and infrastructure to suit their needs, and brands will need to work within them. As a consequence, the opportunity for brands will be at a trade marketing and promotions level. Brand managers will no longer arrange coupon promotions themselves, they will need to engage with their retailer customers to design retailer-specific promotions.  

  3. "It's all about the barcode" A lot of attention gets paid to barcoding - in particular, regulation surrounding what can be scanned at the point of sale. But in truth, it's not about the barcode - it's about identifying customers. Retailers want to be able to customise offers to individual customers who they can identify at the point of sale. Mobile can provide a great opportunity for them in this regard, allowing customers to redeem discounts that are best-suited to them via their retailer-led loyalty programme. But, beyond the barcode, there may be other means of achieving this. For example, mobile coupons could actually be redeemed at the checkout simply by swiping a loyalty card or scanning an NFC-chip on a mobile phone.

    At the same time, mobile coupons may become more suited to multi-brand programmes where offers can be aggregated together and presented to consumers in a targeted and easy to access way. Consumers do not want to be viewing offers from a variety of different places all over the internet. They will prefer to view and access everything from one source - the individual retailer - and select the offers that are most relevant to them.

"The introduction of mobile couponing solutions in the UK will undoubtedly be incremental. Adoption will happen on a retailer-by-retailer basis - and it will take time," explained Felstead. "In the medium term, digital, mobile and social couponing will form part of brands' trade marketing and promotional activity. But, while the evolution takes shape, brands should not be quick to dismiss paper especially when it comes to what is 'useful' to customers."

For example, print-at-home coupons remain an effective form of couponing. And as companies increasingly look to the digital channel to provide performance and efficiency gains, many are recognising the benefits of migrating traditional direct marketing activities into a hybrid: print-at-home coupons. This methodology provides a happy balance between digital and print, allowing retailers to improve the efficiency and cost of distribution, and delivering customers additional value that will increase brand loyalty and engagement, at a time when value is a key consumer priority.

Recent research by Coupons.com found that 56% of UK consumers who receive supermarket coupons via direct mail either remove the coupons and discard other content (45%) or disregard them altogether (11%).

As the market moves steadily toward retailer-led mobile couponing, paper coupons will continue to be regarded as useful by consumers, and digital print-at-home coupons can give consumers and retailers the best of both worlds. And anything other than that is a myth.

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