The next topic we studied this week was Mobile Coupons.

In my previous post, I wrote about how JC Penney launched a mobile coupon campaign as a pilot project in Houston, Texas in September, 2009 that involved 16 of their metro stores.

Their customers had to sign up to receive the coupons, and once they did, they could redeem them at the point of sale for a discount without ever having to print them out.  This would avoid forgetting them at home and give the customer more control over their purchase.  In turn, it was a way for JC Penney to tie directly into the end-user experience.

The focus was on retaining customers, and building brand awareness, as well as acquisition of new customers.  JC Penney also wanted to see how the consumer would interact with the coupon and how it would actually work in the store for redemption.  These coupons would be exactly like coupons that would be sent to other consumers via direct mail.

JC Penney expected to reach a younger demographic who are more apt to be avid cell phone users.  Their target demographic would be female, 25 to 44 years old.

They were willing to invest in this trial to see if their redemption rate would be similar to the 10% to 20% that other brands were reporting.

“Do you feel that JC Penney will find success with their “mobile couponing” pilot project?

I was certain that it would be successful enough for them to continue a mobile coupon program, it’s just too easy for the customer since they carry their phone with them everywhere they go.

Further research indicates I was correct, an article published in the Plano Courier Star on February 4, 2010 reports that JC Penney will take advantage of the mobile advertising opportunities and modify their program to include all store locations.  Instead of the 2D scannable image they previously included in the mobile ad, the store clerks will manually enter the coupon code and use new “hot buttons” on the register.

Their provider, Cellfire, reports that “the average redemption rates for paper coupons is about 1%, while the average redemption for a mobile coupon is between 15% and 25%”.  They also reported that “during the five consecutive quarters beginning October 2008, consumer coupon use increased 16.7% and brands issued 367 billion coupons in 2009”.

Do you think “mobile couponing” is a fad or a sign of the times?

Mobile couponing is definitely a sign of the times.  I definitely believe it will be extremely successful.  Reports of success are everywhere.  One recent article titled “What a Girl Wants:  More Mobile Advertising”,  by Jolie O’Dell, cited these statistics for Mobile Advertising:

• 85% use the mobile Internet almost daily.
• 70% expect their mobile Internet usage to increase in the future.
• 84% have noticed mobile advertising, and 57% have clicked on mobile advertising.
• 67% are interested in receiving mobile coupons or vouchers.
• 93% are always on the lookout for bargains.
• 93% like being up-to-date with new technology.

Those are some pretty convincing numbers when it comes to deciding on whether to launch a mobile coupon program!

Additionally, 86% of these women stated they accessed Facebook, Twitter and similar sites with mobile advertising, and you have more than one way to launch your coupons!

More and more online coupon start-ups are popping up.  One I just found from my “hometown’’ in the Tampa Bay area of Florida called “Send Savings.com”  allows mobile users to sign up for coupons and discounts, determine how many times a week they want to receive the offers, and for each time they get one, a donation is made to their favorite charity.  They use text coupons.

Sources:

http://www.dmnews.com/jcpenney-takes-coupons-mobile/article/149790/

http://www.planostar.com/articles/2010/02/04/plano_star-courier/news/148.txt

http://mashable.com/2010/05/05/women-mobile-shopping/

https://sendsavings.com/signup/individual.php

This week in my Mobile Advertising and Design course, we are studying digital coupons.

This assignment is based on an article dated November 11, 2009, titled,  “Coupon Clippers Drive Incremental Sales”.

The article cites that digital couponing is on the rise and 1 out of 3 consumers report using more coupons than at the same time a year before, and that males age 18 to 34 were doing more comparison shopping and actively searching for coupons.  Further, as much as 59% of consumers will forsake name brands for generic brands based on price.

The next question raised by the article is whether the coupons drive incremental sales or cannibalize existing sales.  The study found that coupons do, indeed, drive incremental sales by as much as 40% and those customers are either new or lapsed buyers.  The study also cites that 63% of the redemptions drove incremental volume and did not cannibalize existing sales.

Our instructor then posed the question:

Does “digital couponing” cause consumers to forsake brand name products over cheaper products or services?

To that question I would have to say no.  I believe that digital coupons help drive the sales of name brands over generics when the coupon brings the price inline with the price range of the generic.  If I am shopping and I prefer the name brand product, but buy the generic to save money, I will use a coupon and purchase the name brand.  For example, the price difference is 50 cents and the name brand gives a coupon for 35 cents, I will choose the name brand.  That confirms the findings of the study, as I would have been considered a “lapsed” buyer.

There are some items I simply will not buy generic replacements for.  Instead I will shop the ads and when there is a really good sale, I will pick up a couple of the same item, saving me money in the long run.  A good example of this is Heintz Ketchup.  I grew up on it, it’s the only kind I like, and yes it’s more expensive but I will not buy any other brand – it’s the taste and the consistency.  Now, if I get my hands on a coupon, it’s a happy day, and just like the others cited in the article, I will look for a coupon.  I am not loyal to Heintz per se, I will buy generic brand relish, mustard and other products that Heintz sells in order to save money, but I will not scrimp on my ketchup!  This sale would have been categorized as a “cannibalized” sale.

I really do not think Consumer behavior can be so easily categorized in those terms.  We live in interesting times right now.  Things have changed drastically with the steep recession we are in, and everyone is doing the best they can to get by.  What I find interesting was stores like Publix who would run their ad specials in conjunction with manufacturer’s coupons so if they were selling something 2/$4 this week, you could also use a manufacturer coupon to bring the price even lower.  I am sure that is why Publix is gaining market share and increasing revenues.

Digital Coupons vs. Newspaper Coupons:

Another article titled “Gens X/Y, Rich Households Hike Private-Label Sales, written May 6, 2010, affirms my shopping habits since the recession.  In this article it cites a Nielsen report that National brands still drive the vast majority of sales (82.7%) as well as units (78.1%).  During the period of time of the study, store brand sales grew by 2.5%, while National Brands were able to stabilize declines and achieve a growth of 0.4%, due to increased promotional spending.  The study showed that categories with the strongest brand marketing support (Beer, Candy) or those achieving the biggest innovations (deodorants, detergents) were the strongest of the national brand sales.

According to a Research Brief titled “Digital Coupon Redemption Value Beats Newspapers”, dated March 1, 2010, use of digital coupons outpaced newspaper coupons 10 to 1.

This study also cites a Nielsen Online Metrics report stating that coupons/rewards was the fifth fastest growing Internet category in 2008.  Google reported that searches for the terms “printable coupons” and “online printable coupons” grew 186% and 178% respectively during the year.  Yahoo reported searches for “coupons” were #1 on their list of economy-related search queries during the same period.  Futher, the 2009 Savings Index found that Atlanta residents were heavy users of Coupons.com offers in 2009, followed by Tampa, Cincinnati, St. Louis and Minneapolis.

Digital Coupons expected to continue growth in 2010:

In conclusion, I agree with Coupons.com CEO Steven Boal when he said “we expect the adoption of digital coupons will continue to accelerate in 2010”.  We are far from being “in the clear” with respect to this economic situation.  Smart manufacturers will continue to use digital coupons to invite consumers to save on their products.  Digital wins hands down – they are easy to locate, easy to print and while the coupons from yesterday’s newspaper are still sitting on your coffee table at home, the ditigal ones can be retrieved right before you leave work to purchase dinner on the way home!

Sources:

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=117207

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=127527

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=123365

http://promomagazine.com/incentives/news/0224-digital-coupons-beat-newspapers

Kwedit is currently only for digital goods, however, their partnership with 7-11 Stores will create a new payment method that changes the landscape of online sales, especially using Kwedit Direct!

In the New York Times article “Buy Now, Pay Later (Maybe with your allowance), Kwedit bring online purchasing to the under-13 crowd, as well as a tipping point to add new buyer personas to e-commerce.

Currently, Kewdit is being used strictly for digital goods in children’s games, where they can make purchases of digital goods in the game using a promise to pay.  As they do pay for the goods, their “kwedit” score goes  up, allowing them to purchase more on a promise.  Kwedit is reportedly seeking the “sweet spot” where the kewdit limit is not too high, but not low enough to discourage the purchases.  At the same time, the digital goods sellers suffer no real loss for non-payment (except obviously their time in creating them).

The cooler part of this new platform is the potential in the future availability to add “Kwedit Direct” as a payment form for all other online transactions.  According to the New York Times article, the buyer will be able to make a purchase online using the Kwedit account, then print out a bar code and take it to 7-11 to make a payment in person using their cash, or their credit or debit card.

This potentially increases online sales to those who have avoided buying online because they do not want to expose their bank account, credit or debit cards – or they simply do not have one.

This is an exciting opportunity for online merchants and worth watching as it rolls out!

In an online article from Media Post,  Robert Half Technology conducted a recent study and found that in regard to social networks,  businesses complained that “time-sucking social networks hurt their productivity”.

“It takes away from primary responsibility,” Dave Knapp, regional vice president for Robert Half told the San Francisco Examiner. “When socializing on sites such as Facebook, we lose track of time.”

[Is he even SERIOUS? Makes you wonder what kind of people he thinks he employs!]

According to the study, other concerns of these companies included being worried about employees leaking sensitive information.  The survey indicates an amazing 54 percent of these businesses block social networking sites.

So, in 2010 will these Corporate Giants realize the VALUE social media offers to their bottom line and be more creative in using it – or will they continue with the same old rhetoric of productivity losses?

The key issue here is simple:  these companies lack the creativity to do what is best for their bottom line.  In corporate environments C-level executives have an “all-or-nothing” mentality.  Either ALL employees get access, or NONE get it.  Why?  They certainly have IT professionals on staff who can manage their server traffic.  Why not give it to their recruiters and marketing department?

Leaking sensitive information?  I don’t know about you, but that sounds like an excuse to me to continue the “norm”.  After all, how many employees that are not a C-level do you know that have access to sensitive corporate data?  My experience shows that answer to be “NONE”.  If it is the C-level Executives you are worried about leaking it, then WHY are they in those positions?  RHETORIC.

My Solution:  Attend our Feb 18th, 2010 Seminar given by David Meerman Scott, a true Thought Leader!

Don’t use ‘attendance’ as your excuse, either!

We will be providing a LIVE STREAM of the event – and you can experience the power of social networking while you attend because we will have a live chat, Facebook and Twitter feeds!  Our roving cameras will provide you with a front seat so it’s just like being there – and on breaks they will be talking to VIPs, Attendees and even our Presenter, David Meerman Scott!

C-level Executives!  I challenge you to come get creative and increase your bottom line for the New Year!

Source:  Media Post;   SanFrancisco Examiner