Coupons Go Mobile

By TJ Person,

Using a smartphone for everyday transactions is becoming commonplace, with an estimated 86 million Americans using their smartphone to shop every day. They use it to pay; they use it for specials; and they use it to redeem coupons.  

In 1887, Coca-Cola was the first major brand to launch a coupon campaign. Not much has changed in the world of paper coupons since then, except maybe liability. Paper coupons are like paper money: they’re subject to counterfeit and fraud. If retailers misplace them, the payback is lost for good.

In addition to deliberate wide-scale abuse, there is also much mistaken misuse, especially with manufacturer coupons: they can easily be shared, duplicated, and used multiple times by the same person. Even if a retailer is exceptionally cautious to avoid such pitfalls, clearing coupons and getting paid by manufacturers often takes months.

Paper-based POS
There hasn’t been much improvement in the way paper coupons are handled; much of the way the system was set up 100 years ago is still in place today.

Every night when cash registers are emptied and funds accounted, coupons are set aside. At the end of the month, they ship to a clearinghouse where they are sorted and counted, by hand. The totals are calculated, then bills are sent to various manufacturers – Frito-Lay, Procter & Gamble, and so on – who reimburse the retailer.

The process takes 90+ days – a full financial quarter where the retailer is without that cash flow. Yet many retailers stay with this outmoded and costly system, most likely out of habit: but, there’s no longer a good business reason, and the liabilities outweigh the benefits.

Going digital is not only safer and more efficient (the data is real time and lives in the cloud), it is proven to be a powerful tool for reinforcing and enhancing a retailer’s brand.

Many demographics – from young kids to retirees – are experiencing the wallet becoming a thing of the past. We’re more attached to our mobile phone than ever before, and for good reason; and the attachment will only get stronger. Especially as retailers, grocers and c-stores become more and more serious about providing mobile services.

Not only are consumers demanding mobile offers, coupons and loyalty programs, but these programs are easy to implement, easy to track, and fast to deploy and repeat.

For CPGs, it’s all about the brand, and if people enjoy particular products, they’ll remain loyal. Brands are getting very creative in the ways they can harness the power of mobile, often times coupled with social media. One successful campaign to launch a new soda flavor looked like this: major league baseball fans were driven to watch a video online, tag it, and receive a coupon on their mobile phone to redeem a free bottle of soda at specific retailers across the country. The customers had fun with it, and the successful soda brand got 50,000 people to try out a new flavor of soda.

Faster and more effective transactions
Understanding the benefits of going mobile, one of the world’s top c-store chains uses the standard OCR (optical card reader) to scan a smartphone POS coupon for a bag of chips. The customer gets the immediate discount, just as he would with a paper coupon.  

It’s what happens in the cloud that is important to point out here. In a matter of minutes, the transaction information reaches the cloud – the time of day, total register ring, the fact that he also bought a soda, a pack of gum, and a keychain – as well as the fact that he is 350 miles away from home. In today’s world of coupon management, that piece of paper would have been filed until the end of the month, and payment on it would have take months. And, the all-important big data on that customer would have been lost.