Analysts are predicting a big year for mobile coupons.
More than 142 million Americans are expected to use digital coupons by the end of 2019, a number that continues to increase as shoppers shift from desktop to mobile.
Even as we get further away from the heyday of Groupon and other daily deal sites, which helped to popularize digital coupons back in 2011 and 2012, brand marketers are still working to perfect their strategies and maximize the effect that mobile coupons have on influencing shopper behaviors.
One person who has seen the evolution in digital coupon strategy first-hand is Katie Wilson, CEO of TapOnIt and a digital advertising veteran. In this Q&A, Wilson tells us why so many brands have started sending coupons via text message and how brick-and-mortar retailers are using mobile couponing to fight back against e-commerce giants.
Q. You’ve been in this industry long enough to see its evolution. How are brands using mobile coupons differently now than, say, five years ago?
A. Over the past five years, smartphone adoption has continued to rise and is expected to reach 71% by the end of 2019 in the U.S., meaning nearly three-quarters of the population have access to mobile coupons at their fingertips. We’ve seen overall increases in mobile purchases, and mobile coupon redemption is also on the rise.
Nowadays, a consumer may be more inclined to visit a brick-and-mortar store if they see a compelling mobile coupon for a local business in their area. Printing a coupon is no longer something people are willing to do, so using a mobile-first approach to coupon distribution is something that local restaurants and retailers need to embrace.
Q. How did Groupon change the face of digital coupons, and what are some of the lingering effects today?
A. When Groupon first came about in 2008, it seemed like a perfect platform for local businesses to drive foot traffic and increase sales. However, Groupon’s model of half-priced deals really changed the consumer perception of what a good discount means. For businesses to discount their product by 50% and then share up to 50% of the revenues generated from the digital coupons with Groupon, it made it difficult for the businesses to participate, and in some cases survive after participating. The model has jaded business owners on providing good deals in fear of the losses in revenues they experienced with Groupon’s business model.
Q. What are some of the smartest ways you’re seeing brands integrating mobile coupons into their marketing strategies right now?
A. Brands are beginning to integrate mobile coupons into their mobile marketing strategy by connecting with consumers via text messaging. With a 99% open rate, and 90% of smartphone owners opening a text message within three minutes of receiving it, brands are able to directly engage with their audience without a large marketing budget. By presenting deals and personalized messages through mobile messaging, brands are conveniently engaging with their mobile-obsessed audience in a way that’s easily accessible and less likely to be perceived as spam.
Q. Do demographics play any role in how you’re seeing consumers interacting with digital coupons?
A. No matter what age, everyone loves a good deal, but the use of digital coupons varies among demographics. According to a recent study, regular and frequent digital coupon usage is up nine percentage points over the last two years amongst millennials. Millennials with children are also more likely to use digital coupons, particularly at the grocery store, where saving money is more critical with more mouths to feed.
If they haven’t already, retailers need to focus on reaching millennials now more than ever since they are projected to surpass Baby Boomers as the largest generation in 2019 and represent over $300 trillion in spending.
Q. What do you see as the future for mobile coupons?
A. According to research, mobile coupons will account for nearly 80% of all coupon redemptions by 2022; so, brands need to have a plan on how they are putting their offers into the hands of consumers in the most direct way possible.
For brick-and-mortar businesses, the focus on driving foot traffic through mobile couponing is even more important due to the convenience of online shopping. We see mobile coupon platforms becoming ubiquitous and affordable for even small businesses to create, design, and distribute their own coupons.
In addition, we will see retailers find new ways to make mobile coupons more accessible and visible to consumers through mobile messaging, geolocation, and personalization.
Stephanie Miles is a senior editor at Street Fight.