Retail tech’s most uninspiring achievement: the coupon
Mobile marketing, LBS (location based services), SoLoMo (social, local, mobile) — these are some of the hippest terms being bandied about in marketing circles and any retailer that doesn’t give them serious consideration (at least publicly) is chided.
Essentially, these services are used to learn where a consumer is located — on the street, in a mall, or within a store. Then via any number of promotional tactics, an offer is made to the potential shopper to lure them into a store and/or get them to select a particular product. The attraction: a discount, a perk or, by any other name, a coupon. Really?
We live in a time where even kids have more computing horsepower and interaction capability in their hip pocket than the lunar astronauts had on the moon, yet most of the time retailers, e-tailers, and ad/marketing agencies come up with little more use for it than a coupon. While there are apps that offer more features — price comparison, feature selection, product detail, etc. — in the end, it’s typically the coupon that’s used as a purchase incentive.
There are two big problems with this thinking: 1) it’s unimaginative, uninspiring, and does nothing for brand differentiation/building; 2) it trains consumers to make purchase decisions based on the best price offer they can find. Put another way, high tech couponing is rapidly commodifying both products and brands. And no brand/retailer wins selling commodities.
Don’t take my word for it; as reported by Advertising Age in November 2013, Best Buy’s CFO Sharon McCollam said, "If our competition is, in fact, more promotional in the fourth quarter, we will be too, and that will have a negative impact on our gross margin."
Rather than price slashing their way into shopper’s wallets, retailers need to wake up and start empowering consumers to utilize technology in far more creative ways, be it via their personal mobile devices or the store’s technology. There are numerous untapped tech-enabled approaches to making stores destinations and merchandise desirable that do not rely upon couponing to attract customers, engage them, and close sales.
Consider Apple: they’ve built immense brand value and they avoid discounting.
So it seems that despite all the real advantages that technology can bring to the buyer/seller relationship, retailers as a whole are still content with a Sunday flyer mentality. What a waste.
Will high-tech couponing only serve to further cement our price-driven buying culture? Are any emerging technology-based solutions promising better sales boosting methods than discounting?