Location-based Mobile Coupons Slowly Gaining Adoption

Discussion
Oct 17, 2011
Tom Ryan

A new survey shows mobile device users are increasingly open to receiving locally-based coupons, but many are still getting comfortable in how they receive them.

The survey of smartphone and tablet users from Prosper Mobile Insights found that 81.9 percent were open to receiving coupons on their mobile device in one form or another. Sixty-seven percent also "somewhat" or "strongly" agreed that location-based coupons are very convenient and useful.

But the survey also found that only one in four (25.6 percent) prefer to receive coupons on a smartphone or tablet automatically when they are near a store. Also, only 10.1 percent preferred receiving discounts on the spot when "checking in."

The top way mobile users want to receive coupons on their mobile device is via email, noted by 51.1 percent. That was followed by "manually search for them," 32.2 percent; "scan a QR code when inside a store," 31.9 percent; and "receive via text or instant message," 31.0 percent.

Security also remains a concern for many with 44.8 percent "somewhat" or "very" concerned about their location being tracked or other security issues. Another 29.6 percent were neutral while 25.6 percent were not concerned.

Still, the survey showed that the majority of mobile users are engaging in shopping behaviors on their smartphones or tablets:

  • 76.4 percent browse or look for a product or service on their smartphone or tablet
  • 75.0 percent use their device to locate a store or store hours
  • 48.9 percent research specific products
  • 45.7 percent read customer reviews
  • 42.2 percent have used their smartphone or tablet as a coupon (scanning a bar code, showing a text to a cashier, etc.)
  • 39.7 percent have made a purchase directly on a mobile device
  • 36.2 percent have scanned a QR code

The 348 smartphone and tablet users were interviewed on their mobile devices from September 22 to 24.

Discussion Questions: In what ways should and shouldn’t retailers be looking to deliver mobile coupons? What methods may still be a few years away?

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16 Comments on "Location-based Mobile Coupons Slowly Gaining Adoption"


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Lisa Bradner
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Lisa Bradner
9 years 6 months ago

While I question the survey’s overall percentages (they seem awfully high unless they were interviewing a very elite segment of mobile users) I think directionally it points to the core issue of permission. On a personal device where the user is paying for the data to come to them fear of spam is very real. I believe retailers should be focused on those customers in their loyalty and e-mail databases as the first line of likely responders. retailers should not confuse proximity with permission. Location is something I divulge when I have something to gain (connecting with friends, directions, deals, cache). The lean toward e-mail shows that today’s mobile user is comfortable with a metaphor they understand and control. Mobile will be a critical communications channel going forward but retailers need to plan it from the users’ experience forward not the other way around.

Dr. Emmanuel Probst
Guest
Dr. Emmanuel Probst
9 years 6 months ago

Tablets, smartphones and other devices are ‘just’ channels. What matters isn’t really the device but relevance. Retailers have to focus on segmenting their audience and providing each prospect with coupons that are relevant to her. Otherwise, consumers will lose interest quickly, given the range of devices (smartphones, tablets) and coupons (Groupon, LivingSocial, Amazon) made available to them.

David Biernbaum
Guest
9 years 6 months ago

What is most important is that retail executives go out of their way to be sure that their stores are mobile phone friendly for all the above. Consumers become extremely disappointed when retailers are not ready.

Max Goldberg
Guest
9 years 6 months ago

Retailers should deliver coupons in a variety of ways tailored to the needs and desires of the consumers. Coupon delivery vehicles will continue to evolve and retail needs to evolve with them. The beauty of digital delivery is that retailers can constantly experiment with coupon delivery methods and coupon values. When combined with shopper data, retailers have the ability to deliver custom coupons to each consumer.

Doron Levy
Guest
Doron Levy
9 years 6 months ago

From these stats, it looks like retailers should employ all methods to deliver coupons. There are healthy percentages in all aspects of how consumers want coupons. Is 348 users a big enough sample? That’s what I’m wondering. Retailers who employ the location-based vehicle should really stress their own privacy policy to allay customers’ fears of big brother tracking their every move.

Ryan Mathews
Guest
9 years 6 months ago
First of all, like Lisa, I’d like to dig a little deeper into these numbers. They seem high to me too. Next, I think in their zeal to advance the cause some mobile marketers overlook the “creepy factor” or the American aversion to “Big Brotherism.” We live in a nation where a significant — and increasing — percentage of the population is made up of science deniers, Rapture Watchers, and people who are convinced GPS chips are some kind of alien/government plot to control their thoughts. My simple question is, “Are these folks going to warm to the idea that their phones know exactly where they are?” Will mobile marketing become an increasingly important vehicle for retailers and branders? Of course. Does that mean that if you don’t have a full-blown mobile coupon program today you better just shutter the shop? I doubt it. It will be interesting to see what happens as the society continues to devolve and technology continues to evolve but at this point not only hasn’t the fat lady sung, she… Read more »
Bob Phibbs
Guest
9 years 6 months ago

A bit of reality from the NRF show session I attended where they admitted 10% of the heavy users were abnormally skewing the results, that using a smartphone for shopping could include everything from finding someone’s hours, to directions, to visiting their website. I don’t doubt more people are using smartphones, but stories with “facts” such as these seem to be trying too hard.

The nugget I think marketers should really pause to reflect on is that only 10% wanted coupons delivered onsite. Could be a bigger hurdle for LBM than first thought along with other commentators’ thoughts on privacy.

Dan Frechtling
Guest
9 years 6 months ago
The answers you get depend on who you ask and what you ask. Some observations before taking these results at face value: 1. Respondents answered using their mobile devices. Accordingly, the results are not representative of all users with mobile phones but those within the SSI panel who commonly fill out surveys using their mobile devices. It’s not unusual to see optimistic findings through this type of survey. In fact, a July SSI Panel survey found a full 7 out of 10 mobile users pay attention to mobile ads. 2. This survey apparently did not distinguish between offers from preferred retailers and nearby retailers. Would respondents prefer to receive email offers from ANY retailers that had live offers at the time or from stores they commonly visit? There’s a big difference in how those questions would be answered. 3. This survey was fielded to understand one form of coupons: location-based. But there is the larger picture of mobile coupon preferences. According to a larger survey (n=2000) by Luth Research, a full 60% of smartphone users… Read more »
Gene Detroyer
Guest
9 years 6 months ago

“…only one in four.” “…only 10%.” If we assume communication is in the power of the receiver, these are huge numbers. With 25% or even 10% getting only coupons they want, the pay-off is much greater than the broadcast delivers of magazines or FSIs.

Ralph Jacobson
Guest
9 years 6 months ago

The limiting factors for adoption are the segment of retailing and the country of operation. Outside the US, consumers are far more adept at utilizing this service. Here is the US, we seem to be more concerned with security and privacy than other industrialized nations. Also, there are differing adoption rates for grocery, versus apparel versus DIY. Just as our smart phones have evolved with more features that only 5 years ago, these services will evolve for US consumers to better embrace them in the years to come.

Renato Pia
Guest
Renato Pia
9 years 6 months ago

I would like to see coupons on my device screen that can be scanned at checkout.

Matthew Keylock
Guest
Matthew Keylock
9 years 6 months ago

Regardless of the debate on the data in the article, we are still far away from “relevance and value” and in danger of moving further into the orchard of cherry-picking.

So many coupons and deals are switching or acquisition oriented that very often have a very high value relative to the product/service on offer. Such offers are not sustainable for brands if they went to their actual buyers, and are training customers that any good offers must be really deep discounts. Further expansion of this model will either be unsustainable for brands or unsustainable for consumers … or likely both. The added risk is that this also has the potential to be an escalating “race to the bottom” especially in current economic conditions.

A more strategic consumer-centric approach is needed instead of a channel-event-sales orientation.

Until retailers and brands adopt a longer term outlook with more focus on relevance and value rather than short term units/dollars we will likely see an acceleration to deal-centricity and cherry-picking.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
9 years 6 months ago

Of course in a very small sample of 348 smartphone and tablet users who respond to interviews via those devices, the surveyed shopping behaviors would be heavily skewed in favor of more shopping-oriented usage rather than less. My reaction is that as soon as some reliable research becomes available, retailers should take heed. And, I learned something about research a long time ago while matriculating at Ketchum Advertising in San Francisco: The best researchers always provide/offer/suggest solutions or courses of action with their research findings. Research without recommendations is ridiculous.

Ben Sprecher
Guest
Ben Sprecher
9 years 6 months ago
I think these survey numbers are interesting, but not particularly meaningful for the general population. I’d venture that 348 smartphone and tablet users who willingly fill out surveys on their mobile device are not representative of the population as a whole. Nevertheless, we are in the early days of location-based and mobile couponing, and we still have a lot to learn. Retailers should start experimenting with different tactics and technologies now, so that they can develop best practices and expertise while the stakes are low and the audience is largely composed of early adopters who, by their very nature, are more tolerant of a less-than-seamless experience. No matter what, though, retailers must keep offers relevant and must respect consumer preferences about how they are marketed to. I love Lisa’s comment, above, that “retailers should not confuse proximity with permission.” But once you have permission, it is even more important that you don’t squander it. Irrelevant, tone-deaf, “spray-and-pray” type offers delivered over a mobile handset are still crappy offers. They are just more annoying because they… Read more »
David Slavick
Guest
David Slavick
9 years 6 months ago

My suggestion is to develop a Preference Center. This is where it needs to start and it’s not “snap your fingers” easy. The reason for consumer reaction to options is intrusiveness. Not surprising. Ask the customer who is opted in per MMA guidelines what they want and how they want to receive it and you will achieve high marks for asking and listening to their preferences. Short of that — recognize where they are, but don’t push an offer right off the bat as the first communication — offer an opportunity for them to use their smartphone device to share their preferences. Everyone laughed when they saw Minority Report and the GAP ad said hi to Tom Cruise’s character as he navigated an open environment. That’s a word to the wise, take your time and engage in dialogue leading to permission and Tom won’t mind being addressed personally on their mobile device.

Ramesh Kumar
Guest
Ramesh Kumar
9 years 6 months ago

The fundamental thing consumers care about is relevance, timeliness and ease. You can effectively deliver coupons using texts as long as they are relevant, timely and easy to redeem. I worked on the Orange Wednesday 2-4-1 cinema mobile voucher program for over 7 years. Customers were redeeming over 70% the coupons delivered. Text message based coupons contributed over 90% of the coupons requested and delivered. Consumers can use other methods like IVR, Mobile internet and mobile app to request mobile cinema vouchers.

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