Bill Bittner

Retail Customer Experience: Why Mobile Coupons Are Not the Answer

August 12, 2010

FROM RETAILWIRE:
What people really want, but don't know how to ask for, are ways to save money that are relevant to them. They know about coupons, so they think in those terms. Do you agree that mobile coupons are not the answer? If so, what do you think is the answer?      [more...]

The coupon POS process consists of three steps: presentation; validation; and valuation. Presentation is how the coupon is identified: a piece of paper, a barcode on a phone, an electronic coupon tied to the customer's frequent shopper ID, etc. Validation is the step that confirms the customer has met all the requirements to qualify for the discount: multiple purchases, purchase date, etc. Valuation is the step that involves identifying the discount amount based on various purchase minimums. Of course there are also the back-office processes associated with collecting reimbursements from the coupon sponsor.

All the current discussions seem to be focused on presentation. The goal seems to be to minimize the effort for consumers. But when you really think about it, the most frictionless way for manufacturers to reach consumers would be to simply lower costs. The "dirty little secret" is that the reason manufacturers use coupons is that they are trying to segment the market between regular and price conscious customers. The manufacturer does not really want to make the discount frictionless because they are counting on some customers to still pay full price.

The coupon discount may also be meant to get new customers by offering the coupon to buyers of a competitor's product. Here you are not only addressing price sensitivity, you are also seeking to change consumer behavior. The manufacturer may be trying to get the consumer to give up on a product they have used for several years. I am not sure a frictionless transaction is what you want in this situation. You may need more than a price discount to affect the change. By cutting out a coupon or taking some other overt action to reinforce their decision to try another brand, the consumer reinforces their intent to make a change.

I don't know what the best electronic method for presenting POS discounts will be. It could be that each individual will have their own Internet Cloud-based discount wallet that carries discounts targeted for them. The individual could post whatever they want manufacturers to know about their shopping habits. Manufacturers would post their discounts electronically and consumers would present an ID card at the checkout. Sounds like a Facebook App.