by Jörn Leogrande
November 12, 2015

Customised smartphone vouchers for customers entering the shop – just one of the many benefits

Smartphones represent a major challenge for German retail. The “showrooming” trend is impacting on many merchants: consumers are increasingly looking around shops only to buy the products from another supplier online. If retailers intend to keep pace with the e-commerce boom, they will have to completely rethink their sales process.

Mobile couponing is a starting point from which high street retail can begin to integrate further mobile solutions. It is a popular method for incentivising smartphone purchases. For example, customised vouchers are sent to a customer’s smartphone as soon as they enter the shop. This can then be redeemed immediately at the point of sale. These automated mobile offers are facilitated by location-based services.

The majority of coupon apps are now more user friendly

Another example: instead of having to lug around a whole host of paper-based loyalty cards, consumers can add their individual loyalty card accounts to an app by obtaining a QR code from a merchant and scanning this using their smartphone. The apps used for this are becoming ever more user friendly. For example, many now offer users an overview of all current offers as well as location/time-based discounts in addition to the loyalty card function.

And yet the question remains: how successful has mobile couponing actually been up until now? In a 2011 study by the E-Commerce-Center (ECC) Cologne, it was revealed that mobile vouchers tend to stimulate impulse and additional purchases. In this respect, 31% of participants in the study responded to the question “have you ever revisited a shop after having redeemed a mobile voucher there previously?” with the answer “two to four times”, while another 27.4 percent answered “once”. However, the study also revealed that issuing mobile vouchers rarely results in the creation of a solid customer base: just 6.2 percent of respondents revisited a shop “five to nine” times after having previously redeemed a voucher there.

The findings show that the problem with many mobile vouchers is that, over the long run, customers remain relatively indifferent to them – and therefore also for merchants. If vouchers are not seen as sufficiently appealing, they simply won’t be redeemed; the effect is then lost and the customer may unregister from the bonus program.

Modern vouchers are tailored to the individual customer

Dealing with sales-relevant online retail data may just reveal how the best high-street retail solutions should be structured: in general, vouchers, newsletters, internet ads must be tailored to individual customers. Products which customers have already bought should not be promoted; it is rather a case of highlighting products a customer may like based on their purchase history – this also includes offering discounts and vouchers for any potential future purchases. For example, this could take the form of: “you have recently bought a keyboard and headphones from our online shop. Why not take a look at all our new PC gaming products and take advantage of a 10% discount on your next purchase from our store?”

Similar data obviously also abounds in high-street retail – however this data is not always usable for marketing purposes, which is in stark contrast to e-commerce. This is because it is found in separate, unlinked systems. Creating a networked system from these individual entities and connecting the internet to existing infrastructure is an almost impossible task for many merchants because the systems become antiquated over time and cannot comply with elevated security requirements.

Latest IT systems may rapidly digitise retail industry

However, there are now ever more smart IT systems which have been specially conceived for high street retail to provide a solution to this problem. These innovative networked solutions are digitising physical points of sale. Merchants are therefore able to enjoy greater independence from current infrastructure, benefit from valuable data and are simultaneously able to integrate value added services: information from till systems, beacons (for indoor location-based services to help direct customers to specific special offers inside stores, for example), people counters and e-shops will all be interconnected with real-time processing. This means that data is not only upgraded but also made useful and usable for value added services such as mobile couponing. If merchants can find out in real time which products are likely to be of particular interest to customers and when a customer is perusing the store, using targeted mobile coupons could be of huge benefit.

Real omni-channel marketing means recognising desire to purchase and systematically converting this into actual purchases – this applies to online shopping, smartphone purchases while on the move as well as in person at a physical shop. Mobile coupons help to bridge the gaps – they are suitable for use across all channels and will therefore become an integral part of omni-channel offerings in future. They will fit in with the future world of shopping which will increasingly be shaped by digital infopoints, social media, self-checkouts and logistical innovations in the years to come.