Digital Coupon Providers Thrive in Tough Economy
Brands and retailers are turning to digital coupons, particularly mobile coupons, to sweeten consumer offers, in response to the spread of Internet-enabled phones and the tightening of consumer budgets, companies and analysts said. Distribution of coupons across social networking sites and mobile platforms increased last year. It will again in 2009, companies said.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Start-up mobile coupon companies like Cellfire are gaining momentum. The company is working with retailer Kroger to roll out a nationwide campaign across 2,000 locations, Cellfire CEO Brent Dusing told us. He said a 219- store trial produced redemption rates up to 20 percent, compared with the 1 to 2 percent typical in print campaigns. The company’s revenue growth -- mostly from national consumer package goods companies and retailers -- has continued the past six months, he said. Cellfire is working with carriers like AT&T, Verizon, T-Mobile and Alltel to promote the marketing company on carrier portals and in the wireless stores, he said. Cellfire delivers coupons through a downloadable application and a wireless Web site. Users can be alerted to new coupons by SMS or e-mail.
Other players, some based on IP platforms, also are growing. Subway restaurants chose Modiv Media to handle mobile coupons for outlets in New York and Washington state. Yahoo worked with Internet company Coupons Inc. to create a mobile platform. Coupons Inc. has unprecedented growth as it extends the digital promotions platform to in-store, in- application and mobile phones, CEO Steven Boal said. Coupon- aggregation sites like RetailMeNot, CouponChief.com and Savings.com emerged last year. About 38.6 million consumers turned to the Web for coupons in 2008, 13 million more than in 2005, said research firm Experian Simmons. Coupon site visits were up 33 percent year-over-year in October, comScore said.
Mobile coupons will be used by about 200 million mobile subscribers by 2013, said a recent forecast from Juniper Research. Most coupons are paper-based, but the mobile phone is the ultimate individual marketing device and mobile coupon pilots show greatly increased redemption rates -- often by double digit percentages, said analyst Howard Wilcox of Juniper Research. The new wave of marketing offers direct connect to the customers, said Gerry Purdy, analyst with research firm Frost and Sullivan. He said the store, the user and Cellfire all win.
But Wilcox sees significant hurdles, including the lack of needed technology at supermarket checkouts, he said. Dusing agreed, saying mobile coupon applications directly tie into the retail point of sales systems. Another obstacle is that most mobile coupon campaigns rely on mobile bar codes or SMS technologies that not all devices support, Wilcox said. - - Yu-Ting Wang