May 29, 2012
Marketers often call mobile the glue that holds all their media channels together. Rising smartphone penetration and the corresponding increase in key mobile internet-related activities—such as greater access to and redemption of mobile coupons—are two factors driving marketers to mobile as a distribution channel for promotions. All these signs point to mobile coupons playing a central role in broadening the appeal and acceptance of digital coupons among shoppers. Other factors spurring adoption include convenience, improved targeting potential, speed to market and the prospect of high engagement rates, particularly with SMS-based coupons.
Below are a few thoughts about how & why I think mobile coupons are the fuel to the mobile commerce fire:
1. Currently, mobile coupons represent a small portion of digital promotions, but usage is growing at a fast pace. The popularity of mobile coupons extends the trend of searching for online coupons, which emerged as a widespread, money-saving activity during the recession. Mobile coupons carry huge potential because they can influence a consumer in the midst of making a purchase decision.
Recent reports show that both consumers and advertisers are curious about mobile coupons, but that few consumers have trialed mobile coupons. However, they help marketers reach new audiences (particularly those consumers ages 18-24) who are most interested in mobile offers–especially for restaurants, drinks and music.
2. eMarketer estimates that nearly 29 million US adults will redeem a mobile coupon this year, including those received via SMS, mobile applications and mobile web browsers, quick response codes for redemption online or offline, and group buying coupons purchased via mobile. By 2013, the number using such coupons will nearly double, and 16.5% of all US adult mobile phone users will redeem a coupon that year. Moreover, according to Juniper Research, on a global basis, mobile coupon redemption value will reach $43 billion in 2016, up from $5.4 billion last year!
In terms of mobile coupon usage per region, Asia Pacific still leads the way with 52% of total mobile coupon users worldwide, following by Europe, Middle East & Africa with 35%. While the percentage is still low in North America and Latin America, mobile couponing is predicted to grow significantly in these areas as mobile platform innovation and adoption increase. However, there are adoption challenges.
3. Marketers and retailers face several challenges integrating mobile coupons into their marketing mix. First, few have established coherent, well-integrated mobile couponing programs. Many are still trying to understand how to incorporate more basic mobile marketing capabilities into the overall marketing mix. Then they have to sort through a fragmented, complex and quickly shifting technology landscape, such as multiple mobile couponing sources. Training sales associates on the intricacies of mobile coupon programs is a significant undertaking. Finally, many consumers have yet to be convinced of the benefits of using their mobile devices as a payment mechanism, for either in-store or online purchases. Nevertheless, mobile coupons will be critical to the marketing mix.
SUMMARY: Mobile coupons coupled with loyalty programs and mobile payment mechanisms will play a key role in mobilizing commerce going forward. With digital ecommerce now well established, marketers are turning their attention towards capturing the elusive and highly fragmented local commerce opportunity. Many believe that mobile represents a key linchpin to a local strategy because consumers always have their phone on hand, and mobile coupons have expanded beyond SMS to mobile email, mobile payments, mobile applications and the mobile Web. Through coupons, marketers can deliver offers and promotions that incorporate location, context and timeliness are key draws for consumers.