Everyone likes a bargain, a reality that explains the persistence and allure of coupons and discount codes.
But technology has evolved coupon clipping from a tedious, physical task to a source of instant gratification, both online and in brick-and-mortar stores.
Because digital coupons are easily accessed from mobile devices, they have gained cachet among customers on the go. They're a recognized source of value — for shoppers as well as for marketers seeking a meaningful connection to customers.
A Way to Say 'Thanks'
Shoppers are not only acclimated to retail offers: They tend to expect them.
Take loyalty programs, for example — which have a longer history than many of you may imagine. As CMSWire contributor L .N. Balaji, president of Paramus, N.J.-based ITC Infotech (USA) Inc., explained, the idea of customer loyalty dates to 1793 when a US merchant started giving out copper tokens that could be collected and exchanged for items in the store later.
"This rudimentary practice was lost in the course of industrial developments, until 1981, when American Airlines launched the first full scale loyalty marketing program of the modern era with frequent flier miles. The airline industry was the first to adopt this practice and it took another two decades for the system to become a necessary part of retail business."
Today, customers tend to expect businesses to offer some type of loyalty program.
Give 'Em What They Want
According to the most recent data available from Colloquy, a publishing, research and education practice for loyalty professionals, loyalty memberships in the US and Canada jumped by 26 percent to 3.3 billion from 2012 to 2014. But the survey also found many loyalty programs lack clarity and ignore what customers truly value.
"They often fall short of meeting consumers’ needs for utility and reasonable time to reward, lack true differentiation and struggle to keep pace with technologies that are emerging at a staggering pace," the report noted.
What to Do
One approach is to find relevant ways to show genuine appreciation for your customers. A coupon, for example, associated with a reward level is a natural “thank you” to customers — and smartphones have made offering those coupons especially easy to offer, especially to customers on the go.
It’s no secret that smartphone users like digital coupons. Chain Store Age explained that concept in a 2012 post, which noted that four our of five smartphone users access retail content through their phone.
And the surge of mobile coupon usage has been steady since 2014. For example, eMarketer estimated in 2014 more than 100 million customers would use a digital coupon.
Other firms have begun to confirm the degree that digital coupons are integral to mobile customer behavior. The International Council of Shopping Centers (ICSC) reported in its Holiday Consumer Purchasing Trend study that getting coupons was among the top reasons shoppers gave for in-store mobile use.
Enhance Conversions, Boost Sales
A coupon strategy integrated into a number of overall digital marketing campaigns may be the best bet in attracting fence-sitting customers into a retail store. They enhance a number of activities along the path to purchase.
Apps that contain coupons, for example, can aid the customer purchase path. Many retail apps, such as that of Walgreens, include coupons in their offerings, allowing coupons to be used while shopping in-store.
Such in-store strategies serve as a complement to showrooming, which involves researching products and prices in a store and then pulling out a smartphone to check reviews or search for a better price online.
Having a coupon available can tempt shoppers to buy on the spot instead of submitting an online order, especially if it is a personalized appeal. Since these digital coupons go directly to the customer, they also make it difficult for competitors to adjust or match the price, since they don’t see the deals being offered.
The coupon opportunity is further strengthened with in-store beacons, which are increasingly important in alerting a customer to in-store offers.
Juniper Research notes that beacons are expected to deliver 1.6 billion coupons annually by 2020. Thus, mobile coupons with beacons take advantage of smartphone-owning customers propensity to act, being an impetus for trying a new product or to head towards a nearby store.
Coupons are also influential in addressing cart abandonment. Clickz noted that abandonment rates have been rising over the past 5 years. The inability to find coupons has been highlighted as one of the top issues that lead to cart abandonment.
To make the most of a coupon trial campaign, retailers can add an analytics tag to the coupons or a related landing page.
Custom variables can also be used for tracking response to several groups of coupons organized across several campaigns.
Incorporating analytics tracking can reveal how well a given campaign succeeds, particularly with personalization involved. For more on personalization, check out my post How to Get the Price Right: Personalize It.
Shoppers love getting a great price on a purchase. Digital coupons on mobile devices address that in a very personal way, potentially improving the customer experience, reducing time to conversion and improving the conversion path.