Free Standing Inserts (FSIs) will continue to be the mainstay for coupon distribution in 2014. However, their share of redemption will continue to be challenged by the increasing popularity of competing promotions. Digital coupons will remain a relatively small – but important and growing – part of the total industry.
That’s the view of key coupon executives who shared their predictions for the new year with CPGmatters.
“Marketers must continue to focus on delivering dynamic, relevant content to targeted shoppers via their preferred touch points,” recommends Travis Lewis, President, Digital Solutions and CMO for Inmar. “A holistic approach to promotions – across all platforms – must be embraced that is market-specific, leverages all available shopper data and is closely coordinated with shopper marketing plans.”
Ron Fischer, President of Redemption Processing Representatives, has not seen a decline in the redemption of paper coupons, but says counterfeiting will continue to be a critical issue based on published alerts. Last year, RPR posted alerts for 4,890 coupons with Face Value totaling over $26,000. “Fortunately, we received very few counterfeit submissions from our retailers,” he says.
The solution for fraudulent coupons, says Jon Robertson, Executive Vice President of Marketing for the Intelligent Clearing Network (ICN), is real-time validation, which he predicts is on the horizon.
“Electronic real-time coupon validation will at last bring the retailer’s coupon handling and payment processes into the digital age – with all of the associated benefits,” he says. “A real-time electronic solution sees the contents of the entire basket and needs to intercept the scan of a paper coupon before the POS application can validate it. The scanned paper coupon data needs to be sent via a real-time service so the paper coupon can be validated. In addition to validating the paper coupon, the solution will need to check for fraud against a negative or positive master file. When a paper coupon cannot be validated against items purchased, or is identified as a fraudulent paper coupon, a customized message could be sent back to the POS in milliseconds.”
He lists several benefits of real-time coupon validation:
- Customer service for shoppers with coupons will be enhanced
- Cashiers will no longer need to be the coupon police
- Manufactures will pay for all the coupons processed through an accurate electronic real-time solution.
“This technology would provide these services for both paper and digital coupons,” Robertson says.
Wade Allen, President of Coupon Factory, sees more consumer interest in digital coupons at the expense of FSIs. He says the gap between the percent issued and the percent redeemed among paper coupons will continue to widen, indicating a greater demand among consumers for digital offers. Digital print-at-home will continue to be the primary digital coupons issued by brands and redeemed among shoppers, but digital clip-to-card and mobile will continue to grow at a greater rate than digital print-at-home.
“Mobile penetration will continue to grow among the general population, putting further pressure on brands and retailers to adopt solutions that allow shoppers to redeem coupons via mobile phones and/or a virtual wallet,” he says. “Brands and retailers will further embrace social media – Facebook, Twitter, and Pinterest – as a means to reach and specifically reward consumers with exclusive digital coupons and promotions.”
Adam Lavine, Chief Executive Officer of FunMobility, predicts five mobile promotion/coupon trends in 2014:
1. The mobile-sized web emerges as a required medium, starting with email. There are now two web formats: desktop and mobile. According to email analytics firm Litmus, 48% of emails are read on a mobile device. However, many if not most, emails link to a desktop-sized web, as anyone who has had to pinch and zoom after tapping an email link can attest to. In 2014, that will start to change, as marketers realize their conversion rates will improve by linking to mobile-optimized landing and promotion pages.
2. Marketers start to adopt a “mobile-first” mentality. Savvy CMOs are realizing they need to put mobile at the center of their marketing efforts in order to build a long-term brand relationship with their customers. Home Depot’s CMO Trish Mueller is an example of a CMO with a “mobile-first mentality” with “right-sized content” when it comes to digital promotions and marketing campaigns. This way of thinking will become the norm instead of the exception for CMOs, and marketers who adopt this way of thinking will gain crucial competitive advantages in 2014.
3. Mobile opt-ins will become more important than email opt-ins. Most loyalty programs use a consumer’s email address as the primary way they communicate with their customers. However, the average consumer has four email addresses, and they will more likely than not use their “junk” email addresses for loyalty or promotional programs, contributing to low open and click through rates.
Mobile messages on the other hand have a 97% open rate, generally within five seconds, according to the Digital Marketing Association. Marketers need to give consumers a good reason to give up their phone numbers, but the effort will be worth it.
4. Mobile Coupons will continue their march to the mainstream. Consumers have exhibited a clear preference for mobile coupons. A recent Business Insider survey showed that mobile coupons have a 10x higher redemption rate than traditional coupons. Mobile coupons have the added advantage that they appeal to the traditional 35-54-year-old coupon user, but also a younger 18-34-year-old demographic. In other words, they work for existing coupon users, but also draw in a younger audience.
5. Marketers will get serious about TCPA, and some will be burned. The updated Telecom Communications Privacy Act or TCPA puts new and clear requirements and penalties around mobile communications. Most marketers will leverage vendor or in-house expertise to be fully compliant, and will begin building new, robust mobile loyalty lists. Others, however, will play fast and loose with these requirements, or simply will not understand them, risking stiff fines and penalties.