On the Road to Mass Mobile Coupons: Printables and Paperless

Traditional and Online Companies Have Joined Forces to Share Content, and More Grocery Chains Are Going Paper-Free

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As anyone who's caught wind of TLC's reality show, "Extreme Couponing," knows, we are living in a uniquely promotional time in history. More of us are seeking deals and discounts at the same time the majority of us are carrying mobile devices. So how do these two behaviors intersect?

The latest report from Ad Age Insights, "Mobile Marketing: Couponing," explores how marketers can use mobile tools to get promotions into consumers' hands at the point of purchase and includes realistic steps to take right now to start testing mobile campaigns and learning what works.

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Ad Age 's latest report digs into how marketers can use mobile tools to get promotions into consumers' hands at the point of purchase.

Mass-market mobile couponing isn't exactly ready for prime time, but there are several steps in motion that will soon make it a reality. The first is replicating the aggregation functionality of a free-standing insert, the largest couponing category, through a hybrid model—coupons delivered digitally but printed at home, then scanned or manually accepted at some retailers or merchants. Referred to as "printables," nearly 60% of consumers seek these coupons online each month, according to a BIG Research/Valassis eCoupon survey.

As of Feb. 28, Valassis Red Plum and NewsAmerica SmartSource (which together represent 86% of traditional couponing) joined forces to share content -- that is , the coupons they offer through each of their sites -- significantly increasing the coupons available to shoppers on both sites. Valassis, as of January, made a similar deal to extend the reach of its site by connecting with AOL's Shortcuts digital-couponing program. That deal distributed coupons from 7,500 grocery stores and gave access to about 127 million U.S. consumers.

The next innovation -- paperless or load-to-card coupons -- is one step closer to mobile couponing, as those discounts are delivered via the web or mobile and also redeemed digitally and through a consumer's loyalty card. Programs such as Cellfire, AOL Shortcuts, Safeway's just4U, P&G eSavers, Coupons.com and Kroger all have paperless coupons. Consumers register at one of these sites to access coupons, choosing their local retailer and entering a loyalty card number. The setup is relatively easy, and coupons then get fed to a virtual cart. Upon "checkout," those offers are attached to the loyalty-card number.

Coupon-industry veteran and consultant Stan Roach said that 2010 was the turning point for paperless, as leading grocery chains like Kroger and Safeway rolled out paperless systems and become some of the 5,000 stores that accept paperless. "And the retailers who have not yet adopted, including Walmart, Albertson's and Winn-Dixie, have RFPs out to look for solutions," Mr. Roach said, estimating by the end of 2011, 15,000 stores will accept paperless coupons.

Then there's mobile phone-based redemption. In 2008, Cellfire announced a pilot program with Kroger that used a simple cellphone app to aggregate coupons, with Procter & Gamble, Clorox, Del Monte, General Mills and Kimberly-Clark participating in the test . But "we were too early and it couldn't scale," said Cellfire CEO Robert Drescher of the effort.

It kept trying until something worked and has since created barcode-scanning coupons with JCPenney, deals for Virgin America and put coupons on Fios-connected TVs. It has a smartphone app on all major platforms and a load-to-card website-coupon aggregator. With paperless coupons, some retailers decide to go their own way, and some are partnering. Some CPGs also want control (P&G has its own load-to-card program). Mr. Drescher's goal now is to make it easier for CPGs to connect with merchants and standalone paperless programs so they can "select their couponing program by demo and store and be able to easily control the offers."

Kathryn Koegel , founder of Primary Impact research consultancy, is author of several Ad Age Insights white papers.
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