Why Mobile Couponing Explosion is for Real

by Agustin

Currently digital coupons are still very small and represent less than 3% of all coupons redeemed. However, the latest Juniper Research report predicts that by 2016 more than 90M Americans will have redeemed at least one digital coupon, and 45% of mobile device users will use mobile coupons. Is the mobile coupon explosion real?  Yes, and this time it is for good. There are several underlying reasons for this related to these silent but profound changes that are reshaping the way consumers and brands interact. Mobile couponing is one of these reasons. A report from Forrester Consulting in 2014 shows that consumers find digital coupons by using their smartphones in many different ways like text messages from retailers, search engines, coupon specific apps, emails from retailers and/or coupon companies, push notifications, browsing mobile sites,  and QR codes on digital signage or catalogs.  Another way which makes absolute sense, which ScanLife provides, is product coupons in the UPC barcodes of products, so consumers just need to scan the UPC with their phone to get a coupon for that product or a related one. In order for physical stores to be able to redeem mobile coupons, standardization of mobile coupons and the interworking of mobile couponing platforms needs to occur. Currently, most large retailers create their own digital coupons.  However, there are NO platforms in place where manufacturers can create mobile coupons to be redeemed at any retailer. Furthermore, many retailers cannot currently accept mobile coupons, because their laser scanners can’t scan smartphone screens or their loyalty cards or systems simply cannot accept coupons. In January 2015, worldwide industry associations and standardization bodies (like GSMA and GS1) have published a white paper with recommendations for the mass distribution and acceptance of mobile couponing. They strongly push for the use of GS1 Digital Coupon Management standard to create unique serialized coupons for each unique offer created by an individual company.  These recommendations enable digital coupon players to interwork, gain approval from retailers willing to accept the coupons before the campaign is launched, and to verify if the coupon has been redeemed beforehand. For this reason, retailers need to connect online to at least one “standard” connected platform. This scenario will eliminate fraud in mobile coupons and will set the ground for the massive use and adoption of mobile coupons. Scanbuy’s mCoupon cloud platform is one of these couponing platforms. It complies with GS1 standards, follows the GSMA recommendation. Additionally it enables ANY retailer to connect to the platform independently of their technology at the point of sale or the use of a loyalty card. mCoupon identifies the consumer at the checkout using most of the current methods (Loyalty card, NFC, QR code, phone number),  but also enables the identification of the consumer at the checkout, by making the consumer scan a specific unique QR Code at the checkout counter. The business model is clearly a digital business model where manufacturers only pay for coupons redeemed, they are notified in real time every time a coupon is redeemed and the whole settlement process is done overnight.

Retailers that open their point of sale systems to redeem mobile coupons from manufacturers will largely benefit from the explosion of manufacturers’ mobile coupons. They will increase their margins because they will be able to reduce the amount of their own discounts since many more manufacturers products will have discounts paid by them. This will also increase store traffic because manufacturers will use their promotional/advertising spend (increasingly mobile) to publish and distribute coupons for their products to consumers.

Consequently, consumers reached through digital and traditional media outlets will be able to redeem coupons at retail locations. Consumers will use their mobile phone to engage with whomever they want, whenever and wherever they want, favoring the brands that create content and services that are life enabling, life simplifying and navigational.