Digital promotions are becoming increasingly critical to acquire and retain customers, with mobile device-based coupons expected to become key to retaining the most valuable, according to Gartner.
The majority of participants in a recent Gartner Retail Peer Forum indicated that they were already working on one or more digital programmes across multiple channels ranging from text messaging and mobile commerce to the mobile replication of websites.
Digital coupons were already the most popular form of promotional activity for the mobile channel, however, and the trend was only set to continue as the rise of the so-called ‘digital consumer’ continued to reshape the buyer/seller relationship.
The reason behind the rising prevalence of digital coupons was two-fold, according to Gartner’s report entitled ‘Peer Insights: Digital Promotions Up the Ante to Acquire and Retain Coupons’.
On the one hand, mobile users exchanged one trillion text messages last year, making it the most ubiquitous mechanism for peer-to-peer communication. On the other, the number of coupons redeemed rose between 2008 and 2009 for the first time since 1995, up 20% on the previous year to nearly three billion.
The increased use of coupons was attributed to difficult economic circumstances, which meant that shoppers were putting more focus on ‘value’. This situation, in turn, created opportunities for retailers to grow their market share by promoting individual brands. A survey undertaken by Gartner in December 2009 also revealed that nearly three quarters of consumers welcomed personalised offers from brands that they trusted.
A grocery retailer member of the Forum, for example, found that by integrating an opt-in mobile device-based digital couponing initiative with its loyalty card scheme, it was able to connect more effectively with its most valuable customers and drive their behaviour accordingly.
Although its offers were not personalised at that point, 80% of consumers saved the coupons sent to them within 3.5 hours of receiving the message and some even redeemed them just minutes after they got them. The prime demographic for redemption was 35 to 54 years old.
The system not only helped to reduce fraud but also improved promotion planning. The digital nature of the information generated meant that consumer behaviour was easier to track.