The click-and-convert conundrum of mobile couponing

In the final part of our series on Cisco’s VNI forecast, we look at how Canadian retailers could optimize for an emerging channel

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The premise sounds simple enough. Get those mobile coupons into peoples’ phones, seat back and watch customers troop to the cash register, a smart phone in one hand purchase in the other and clicking away to activate those digital discount vouchers.

Yet while many retailers are rushing to cash in on consumers’ love for mobile devices and the increasing popularity of mobile shopping, businesses still face many hurdles.

Take the example of United States-based discount retailer Target’s early SMS mobile couponing attempt in 2011. Previous surveys show that Target already has a thriving digital engagement with its customers. The store sought to extend this further by offering customers $10 discount coupons SMS.

Target’s decision to use SMS instead of a mobile app was bang on. At that time SMS enjoyed a 72 per cent adoption rate compared to just 100 per cent for mobile apps.

Yet, the store managed to disappoint a lot of customers because at a time when only 30 per cent of users had a Web-enabled phone, Target’s text message to customers actually directed them to the company’s mobile Web site to sign up for the coupon.

The question for retailers is no longer whether or not to adopt mobile retail but rather when and where to deploy it and how to provide a smooth, no fuss mobile shopping experience to customers.

“Mobile retail is increasingly becoming a critical factor in fostering customer loyalty,” says Victor Woo, director of the Internet of Everything for Cisco System Inc. “Because we are able to do so many things these days on our mobile devices, the expectation is very high that stores should be able to serve us through our phones and tablets.”

Mobile users are potential mobile shoppers and their ranks are growing each year, according to Cisco’s Networking Index forecast released just last month.

In Canada, there were about 25.6 million mobile users in 2013, up three per cent from about 24.7 million the previous year.

By 2018, Cisco expects Canada to have no less than 28.9 million mobile users. By that time, there will be an estimated 26.2 mobile Internet users and 91 per cent of all mobile device users will be mobile Internet users.

An earlier Cisco survey also found that more than 70 per cent of digital shoppers in North America already begin their shopping process on their mobile phone or personal computer. The same survey found that 34 per cent of all consumers are interested in scavenger hunt-type promos that offer discounts to customers who scan QR codes while at a store.

Retailers however need to consider a few issues carefully before rushing into mobile retail:

  • A major drawback of offering customers coupons and deals through mobile apps is that a long and complicated download process could turn off a lot of potential mobile customers
  • Use QR codes rather than ID barcodes on coupons. Many phone screens are designed for displaying photos and video but not barcodes. Most lasers from point-of-sale barcode readers bounce off the reflective glass and backlit displays of mobile devices
  • The process of a customer handing his mobile device to a cashier to scan a mobile coupon could create a bottleneck at the checkout counter when a customer needs to redeem multiple coupons or if many customers are doing the same thing
  • Outdated polices can also become a hurdle. Sometimes redemption policies require retailers to turn in physical coupons to the manufacturer

To ensure their mobile retail campaign is on the right track, Woo suggest retailers keep in mind these questions that consumers have on their minds when considering a mobile marketing pitch:

  • Do they know who I am?
  • Do I get special treatment or offers?
  • Will it work on my device?
  • How long will this process take?
  • Is my information safe?

We’re always told that the idea of online and mobile commerce is to replicate the in-store experience. Somewhere along the line it seems customers have decided they want the mobile experience to be even better.

Image courtesy of ddpavumba /

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