What’s The Deal? The Technology Of Mobile Couponing

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QR Codes, SMS and Near Field Communication (NFC) are sure to shape the future of mobile couponing.

By Ayesha Mathews-Wadhwa (Founder & Creative Director, PixInk)

Consumers love a good find. In 2011, US consumers saved more than $4.6 billion using coupons, which is $500 million more than in 2010. With smartphones now outselling PCs, brands are beginning to invest in discount strategies using mobile commerce.

Google’s “The Mobile Movement: Understanding Smartphone Users” study indicates that mobile users are more motivated to take same-day action than average consumers.

As such, mobile discounting is a viable way for brands to engage consumers already primed to buy. These consumer trends are also fueling technology as marketers seek platforms to engage mobile deal-seekers. Among them: QR Codes, SMS and Near Field Communication (NFC). These technologies are sure to be part of, if not shape, the path of future mobile couponing.

QR Codes: Coupon Data Goldmine

Though QR codes have been around since the 1990s, they’ve just begun gaining traction in the marketing world within the last few years. In contrast to their older sibling, barcodes, QR Codes can encode 10 times more data using the same amount of real estate, making them particularly useful in data transfer. According to ComScore, by mid-2011, 14 million mobile users in the US scanned a QR code on their mobile device. This is encouraging news for brands looking to win big with deal-seekers.

Since QR Codes are omni-directional, they can be used on many textures and surfaces, such as edible items, apparel, birth control, gifts and artistic designs.

QR Codes offer the kind of measurable, location-specific results that help determine the success rate of marketing campaigns. In March 2011, Mountain Dew and Taco Bell released a promotion using QR codes linked to a website that offered free music downloads. Within two months, the campaign generated just under 200,000 QR code scans.

Still, as with any direct response mechanism, QR Codes are not a strategy in and of themselves, but tools that brands can leverage to stay top-of-mind and initiate or extend consumer engagement. In essence, QR Codes need to connect consumers with something of value in order to be successful. This is why they are a logical tool for mobile coupon strategies.

SMS Campaigns: Strategizing Consumer Behavior

The Pew Research Center’s Internet and American Life Project found that of the 73% of adults who text, 31% prefer to be reached by text. It makes sense then for brands to strategize mobile promotions with this consumer preference in mind. This direction couldn’t be more on point as IHL Group and RetailConnections report that 8 in 10 US mobile phone will use mobile text coupons by the end of 2012.

Texting offers bare bones messaging without the bells and whistles other methods require, which make it a relatively simple way to get the word out. As an example, Crocs Inc. earned 94,000 coupon requests within one month using SMS.

Delivering coupons via SMS has sharing and customer relationship potential since brands can use SMS to initiate a 2-way conversation for feedback and follow-up.

Near Field Communication (NFC): Data Transfer Web 4.0-Style

As NFC-enabled smartphones are steadily being added to the roster, NFC is has the potential to be a useful data collection tool, which will help brands personalize promotions.

While Google Wallet demonstrates the m-commerce potential of the NFC platform, the future of NFC will include data communication between NFC devices, and interactive marketing.

To this end, Brad Wasz, co-founder of CouponTrade.com imagines how brands could capitalize on NFC technology: “The classic example is that of two friends near a coffee shop. The coffee shop could, in theory, alert the friends of [each other’s] presence and invite them to enjoy a two-for-one coupon.”

There are several other technologies that could take the stage as mobile couponing gains ground. Augmented Reality, Digital Watermarks and Image Recognition are a few; however, the point is that we’ve only begun to scratch the surface to how mobile technology can help brands entice consumer activity. With these technologies, brands get the opportunity to court their ideal customer in ways that rival brick-and-mortar shopping experiences, and, in some cases, exceed them.

Do you see brand promotions using mobile technology as invasive or ground-breaking? Why? Share your thoughts.

Editor’s note: Got a question for our guest blogger? Leave a message in the comments below.

About the guest blogger: Ayesha Mathews-Wadhwa is Founder and Creative Director of PixInk, a San Francisco-based digital design microagency serving a macro niche: businesses marketing to women, who drive over 80% of purchase decisions. She nurtures emerging brands and strengthens iconic ones through powerful design, insight and a deep understanding of the female consumer. PixInk’s microagency structure works extremely well for Apple and Facebook, among others. Follow her on Twitter at @ayeshamathews.