Commentary
Mobile Coupons & the Waning Impact of Printed Circulars
- by Chuck Martin , Staff Writer, August 29, 2013
Maybe, just maybe, mobile commerce is having an effect on those
traditional, printed circulars.
I just came across a rather interesting stat from Catalina, the marketing firm noted for its shopper history database.
In a study being released later in the fall, Catalina points out that while grocery stores spend as much as 70% of their ad budgets on circulars according to Nielsen figures, they aren’t being overly effective these days.
After analyzing 6 million transactions in 260 stores, the digital media firm found that more than 66% of transactions during the Memorial Day shopping period contained virtually no items that were promoted in the holiday circular. Zero. None. Nada.
And it’s not like the circulars were not loaded with promoted products, since they listed more than 1,100 items, according to Catalina.
Of the 6 million transactions, 17% included one item advertised in the circular and 17% had two or more.
To put this in context of m-commerce, just about every study looking at mobile consumer shopping behavior shows that deals and coupons are the top drivers.
Studies have shown that even small incentives of a few dollars off can influence a mobile shopper.
Mobile coupons have several obvious advantages over printed circulars, especially since they are in the phone and with the shopper all the time.
Rather than turning paper pages, mobile coupons can be digitally searched by shoppers. They can be automatically associated with products on a shopping list.
They can be offered based on aisle location of a shopper, and so on. You get the idea.
By next year, the number of U.S. mobile coupon users will reach 53 million, according to eMarketer. This will be an increase from 12 million just a few years ago.
By next year, one in four mobile phone users will redeem a coupon from their mobile device, says eMarketer.
I’m guessing many of them will be leaving those printed circulars in their recycle bin.
Chuck Martin is Editor of the AI & IoT Daily at MediaPost and writes the daily Connected Thinking column. He is a NY Times Business bestselling author and his latest book is “Digital Transformation 3.0” (The New Business-to-Consumer Connections of The Internet of Things.) He is CEO of Net Future Institute and a frequent keynote speaker internationally. Follow him on Twitter @chuckmartin and contact him at Chuck@MediaPost.com.
Ah yes, those poor "traditional, printed, old-school circulars..." Another print bashing rant, eh? According to location analytics company Placed, who did a recent study of back-to-school-shopping preferences of 12,000 smartphone respondents that were asked which ways they prefer to receive back-to-school promotions, 46.3% said “print ads,” ahead of direct mail from the store or brand (41.3%), email from the store or brand (41.1%), brand or store Web site (28.4%), deal Web sites (26.1%) and was far ahead of social media (21.2%). There could be other factors, such as industry, age, location, but please, let's not relegate print to the recycle bin just yet...
Print is easier. You can see it. You can clip it fast. You don't have to use your own ink. Expiration dates aren't that long and it is easier to keep track. You can compartmentalize separately. You can pass on what you don't need. You can see all the stores in front of you at the same time to compare when using flyers and can organize when and where you are going and what you are going to buy ahead of time and get out of the stores faster. Print is consumer oriented. Mobile phone is phone corporation oriented.
As the author of numerous printed book, I'm with you there, Greg. A larger point here is the lack of targeting/personalization, which may be a reason for relatively low conversion rate. And we did cover the Paced study as well.
Not so fast. The vast majority of POS scanner systems being used by supermarket chains today can't even read a UPC bar code on a phone, so there's no way they can handle the scanning of mobile coupons at checkout. Yes, coupons can be tied in to the consumer's loyalty card account so that the entire process is hassle free, but it's probably a lot easier to do that using a desktop computer rather than a phone.
What NEEDS to happen is that digital circulars need to be pushed to consumers..via email and on to their mobile devices..tablets etc...
WE need to create dynamic signatures that allow marketers to populate intelligent circulars based on the transactional profile of consumers…
This is NOT about consumers seeking digital coupons..This IS about consumers receiving intelligent digital circulars and shopping from them. Absolutely no problem with creating a digital form factor that resembles the print circular digitally as step one. Heck..combine the offers with a little content marketing from Grocery retail brands and you have your own "shopper" magazine.
You are very right about the POS issues, Gian, especially in the US market, where mobile scanning is not as ubiquitous as in some other countries. Many are working on the issue.
Great points, Al. Intelligent (and more automatic) mobile couponing that is relevance based is where it's at.
Let's do some quick math here:
There are about 250 million adults in the US.
56% have a Smartphone, says Pew Research.
So: about 130 million consumers able to transact a mobile coupon.
An estimated 53 million "will" use an electronic coupon next year (maybe: probably for under 35, probably not for over 65)
One-in-four looks about right, leaving well over 100 million folks NOT using mobile coupons.
I think circulars, which are more targeted than given credit for (by zip code at the very least) have some legs to them for a number of years yet, especially with older demographics.
Plus, only measuring which featured items were actually bought (during one specific shopping weekend) does also under-measure the suggestive value of delivered print material.
Mobile is still an opt-in medium, and therefore less able to draw in new customers from competitors. Catalina's research would be more valuable if it crunched through six months of activity.
As usual, both channels offer value: Keep testing the new channels, and testing the old ones too!
Hope we made clear, as did Catalina in its research, that this was just a snapshot over one holiday weekend, Kern. No one is suggesting circulars are dead. But kudos for some nice number crunching.
The shopper needs an elegant, efficient journey when considering accessing a coupon or rebate on their device. Until retailers become willing to truly integrate at POS, the opportunity to exploit the mobile/digital potential is limited. The shopper journey and the "trade" journey to promotional fulfillment must be seamless to be effective. The shopper is way ahead of the marketers and retailers at this stage and only defining the potential has not seemed to be enough to motivate the retailers to make the necessary investments.
Good point, Steve, about the mobile shopper being ahead of the marketers and retailers on this one. There sure is a ways to go here; thanks for your thoughts.
I'm not even sure where to begin in responding to this because the author's bias is so clear. That said, it's important to make a few critical points - 1) ask any retailer, especially a grocer what drives the most traffic (by far) to their stores... it is printed circulars. 2) the problem with the author's perspective is that it takes a migratory viewpoint. In other words, he implies people are dropping one media for another. In fact, most people use multiple sources to shop (from need to stimulus to transaction). 3) the author is correct that mobile has dramatically grown in importance for shoppers, but technology must be simple for the user and productive for the retailer. Retailers are not as far behind as many "tech" experts believe... they just know what really drives their business.
Not sure where you see the author bias, Randy, was just reflecting on a snapshot Catalina study over a holiday weekend. No one is suggesting circulars or printed pages are going away. Also was not trying to imply anything about one media being dropped for another, just what Catalina found in its analysis of a shopping weekend.
Print holds still and lets you read it. Print does not demand your contact information and purchasing history. People who prefer these experiential and privacy factors don't really care if marketers (or anyone else) think they are ancient and uncool or not sufficiently compliant with orders. They know it's still their money to spend, or not.
Look at media consumption patterns folks..Print is dying...It's just a matter of time. All of the romanticizing about what Print provides etc...is wasted breath. I ran print magazines, I sold for Parade magazine, I have been around Valassis and other print circulars..Time is NOT on your side. It's foolish to think that Print is here to stay and that there is no need to begin transforming your business to embrace the new printing platform...digital.
Yes, Cece, print does have some nice physical characteristics. While it does not demand contact info, the converse is also true, in that it cannot provide nay additional value.
Thanks, Al, was looking like everyone was clinging on to the print bandwagon. Not the future, though also not totally disappearing. Will be interesting to look back in a few years. Thanks for your comments.
Chuck, it all depends on what you mean by additional value. To whom is it valuable? Certainly print does not provide the marketer the opportunity to ambush and intrude upon me forevermore. So yes, less value there for them. If on the other hand you are talking about more value for the consumer, there are ways for me to have what I consider value. If value is information that for some reason they couldn't include in the print vehicle, I can contact the marketer and get more information, but do it on my terms.
Heck, I could even, I don't know, walk into a store or something. It's there that I am not only closest to the product, but most in control. You show me what you have and tell me the price and the special offer, I can ask questions and decide if it's a good value for me, I need not even tell you my name if I pay cash.
The marketer may consider a complex and ongoing electronic communications relationship of value to him. But he would do well to be honest and admit that that it may be the opposite of value to some customers, and make it optional. Either that or declare "we don't want you as a customer if you won't play it our way" and see what happens.
Right, Cece. Meaning some consumers will want this and others won't, just as in other mobile/digital interactive opportunities. Was referring to value to the consumer, not to the marketer. Opting out is generally quite easy if no perceived value bring provided.
Thank you, Chuck. And yet some seem quite adamant in insisting that soon there shall no longer be such an option and there will be no way to avoid participation. They should be careful what they wish for. People are quite resourceful when it comes to finding ways to do what they prefer. And smart marketers will help them with that instead of fighting them.
Great point, Cece, and some will figure this out and others won't.
Chuck, in my opinion that is the secret to marketing success in the 21st century, and it's hidden in plain sight!