Why are we not using mobile coupons yet?

I came across an interesting data set by TSYS, a payment processing company, relating to the consumer use of coupons, daily deals, and card-based rewards programs. For the purpose of this post, I want to focus on the coupon data. Turns out that coupons are still widely used with 83% of respondents using some form of coupon — this includes print and display. Also somewhat surprising is that the heaviest group of users is the 150k+ income bracket. In fact, 47% of high-income earners use coupons more than 50 times per year. So coupons still seem quite popular and the top three sources for coupons are, in order, newspaper, online, and store circular. What I found particularly interesting is that only 1 in 5 respondents source coupons on their mobile device, despite the pervasiveness of smartphones. According to Nielsen’s Feb 2014 Digital Consumer Report, over 66% of US consumers own a smartphone (source). Also, with the success of online coupon companies such as RetailMeNot (NASDAQ: SALE) and Coupons.com (NYSE: COUP), the logical next step would be the mobile device. See here for the full study.

If we look at the startup landscape for mobile coupon startups (see the map here — scroll down to ‘Coupons’), there is no shortage of companies — Scoutmob, Key Ring (Gannett), SnipSnap, and Yowza to name a few. And really, why shouldn’t there be? The value proposition seems clear enough, (in general) consumers get access to coupons based on personalized interest, location, and trending, while merchants have more distribution control and customization options. I believe that one of the biggest hindrances is the adoption and integration barrier.

In the 2013 Mobile Wallet Consumer Report, the survey cited that only 19% of respondents saw a retailer take advantage and offer coupons via a mobile wallet (source). Whereas newspaper prints and store circulars have become standardized, different mobile offerings mean different coupon creation/integration tools. Some companies enable retailers to pull data directly from a product catalogue while others require more manual processes to create, distribute, and redeem offers. There is also an education component on both the merchant and consumer side. With multiple point-of-sale solutions redemption can be an issue, some apps produce bar codes while others may require visual verification. That can make accurate tracking difficult for larger merchants. Consumers may also require a small education component in working with new discovery tools and workflows.

I’m curious to know if you use mobile coupons and if so, do you prefer them to traditional print coupons? Let me know in the comments or by reaching out on Twitter @nsoohoo.

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