Package-Goods Giants Roll Out Mobile Coupons

P&G, Clorox, Del Monte, K-C, General Mills Team With Kroger to Try to Make Promotions Relevant to Younger Consumers

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SAN FRANCISCO (Adage.com) -- Five top package-goods manufacturers are using mobile phones in an effort to revive the art of coupon redemption.

Procter & Gamble, Clorox, Del Monte, General Mills and Kimberly-Clark are teaming with retail giant Kroger for what will almost certainly be the biggest test of wireless coupons to date and perhaps even one of the most significant ventures into mobile marketing in the U.S. The aim is to reach the generation between 25 and 34 who are likely to have growing families in need of baby, home-cleaning and household products, but who don't read a lot of newspapers.

"Promotions still work -- the problem is finding where we need to talk to them in a relevant way," said Irma Tavilian, baby-care and childcare consumer promotional marketing team leader at Kimberly-Clark. "The whole industry is trying to figure out these channels."

Roger Entner, senior VP-communications sector at IAG Research, went so far as to predict "Mobile couponing is the future -- hands down." Besides avoiding the fuss and muss of cutting out coupons, he said, mobile coupons are never forgotten at home.

Scissor-less coupon-clipping
Under the test, consumers download Cellfire, a mobile-marketing application similar to a ringtone or mobile game, to their cellphones. That allows them to peruse Cellfire's mobile shopping mall to see which discounts are being offered. If the shopper finds one of interest, he or she "checks it off" on the phone, creating a mobile shopping list.

The choices are automatically sent to the computers at Kroger, which identifies the consumer by his or her loyalty-card number at checkout, and the discount is automatically applied there.

Ms. Tavilian said during the initial days of the program Kimberly-Clark will stick to the same discount offers available in the newspaper for two brands, Huggies and Cottonelle.

The test participants declined to discuss details of the program's costs. Sunday free-standing-inserts have about a 1% redemption rate and a $10 cost-per-thousand. Other, more behaviorally-targeted coupons are more expensive, with a 10% redemption rate and a $100 cost per thousand.

'Millions' of potential customers
Cellfire has about half a million users today, and 70% are under 35, said CEO Brent Dusing. "There will be millions of people on this program in the future," he said.

The service can be downloaded over the PC web, the mobile web, from all the major telecom carriers, and through text messages. Kroger will promote the program with in-store marketing.

Cellfire, which has a share-with-friends feature, also can be spread virally. Other retailers working with the company include Hardee's, Hollywood Video, Taco Bueno and 1-800-Flowers.

Karl Schmidt, director-promotional marketing for General Mills, said the program has the added bonus of having some green value in eliminating the cost of paper, printing and shipping.

Does that mean the FSI will go away? "Hard to say," said Matt Kemme, P&G's brand manager-grocery products. Said Andy Alcock, Clorox's retail consumer marketing manager: "It all comes down to what the final financial model looks like."
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