Technology/Services: Redeeming Values

Mobile-coupon programs accelerate as more consumers make planned purchases

What’s that vibration? A Waze community-based traffic and navigation app on your smartphone is trying to tell you something. It’s letting you know that you’re close to a store with a food or beverage special that is not to be missed.

As shoppers amble down aisles, shelf beacons are influencing their buying decisions—and they don’t even know it. Placed at ends of aisles, the beacons notify customers with certain smartphone grocery apps of deals just for them.

Mondelez International has seen the positive results Waze and beacons yield in building volume for brands such as Ritz and Oreo. “We found that consumers who received an alert from the smartphone app spent three times more on Ritz products than those who did not,” says Kathryn Sheaffer, a team member on Mondelez’ Shopper Futures initiative, a second-generation incubator program. Built on retail marketing pilots, Shopper Futures has had a profound effect on how consumers interact with Mondelez brands, says Sheaffer.

An impulse-driven industry, c-stores aren’t regarded as coupon and rebate specialists. But that doesn’t mean they shouldn’t be. Industry consultants say more consumers are making purchasing decisions at home or enroute to stores—often with a mobile coupon leading the path to purchase. “As consumers sift for value with mobile apps to research products, read reviews, receive coupons and manage shopping lists, retailers and suppliers need to take action to capitalize on the opportunity,” says Bill Bishop, chief architect for Barrington, Ill.-based Brick Meets Click.

The C-Store Opportunity

Consumers now view smartphones as something of a personal assistant. Price checking serves as the primary task in mobile shopping, with 36% of consumers using it to that end. And 55% of digital-coupon users are mothers, which is of particular interest to c-stores as they seek to cater to more female customers.

The c-store’s biggest players, many of the pacesetting brands, are likewise driving success in mobile couponing. The highest sales growth rates have been registered by brands such as Dr Pepper (24%), Slim Jim (18%), Lay’s (14%) and Reese’s (14%), says Bishop.

But c-stores are also less likely to engage in mobile shopping for several reasons—one being the impulse-laden nature of the business. The other is a matter of scale: C-stores don’t stock the same breadth of inventory that other channels do, and that volume is a driver for adopting coupon programs.

As retail channels start to blur among consumers looking for the best deals, the time is appropriate for chains to engage in some degree of mobile shopping initiatives, Bishop says.

Jason Lobel, CEO of Chicago-based SwiftIQ, a software company that tracks and measures store-level activity and furnishes those insights to CPGs and retailers, says larger c-store chains have jumped into the mobile-shopping arena with positive results. He cites West Des Moines, Iowa-based Kum & Go, which invested in a mobile-couponing initiative that “yields two to four store offers per week of CPG products.”

“While we have seen some success with our mobile offers, we don’t have a lot to share about our program” at this time, says Kristie Bell, communications director for Kum & Go. And, in fact, many c-store retailers approached about the initiatives haven’t taken the plunge yet.

Mobile coupon and rebate programs “will typically come from suppliers,” says Brick Meets Click’s Bishop. Retailers “need to be able to know when the content provided [on user smartphones] will increase the likelihood of a purchase,” then make sure inventory fulfillment supports the demand, he says.