Convenience Channel Driving Growth of Mobile Offers
ADDISON, Texas — The mobile offer industry had a booming 2016, with usage climbing more than 10 percent. The number of U.S. mobile offer users grew 11 percent to 104 million, according to a report by Koupon Media.
Millennials are largely responsible for the growth, as nearly half of the age group used more digital offers in 2016 than they had in 2015, per the report, 2017 State of Mobile Offers, which also found that customers want mobile offers and they become better customers when mobile offers are made available to them.
Also among the trends outlined in the Koupon Media report is the rise of small-format stores and their ability to attract customers through mobile offers. Leading the small-format store pack in growth are convenience stores.
"As retail stores get smaller, marketers are being forced to explore new ways to reach and market products to customers," the report states. "With an emphasis on convenience and immediate consumption, we're finding small-format stores, and CPGs that sell products within them, are turning to mobile offers as a crucial marketing tool."
In the study, the success of mobile offers was measured by reach (the number of customers who viewed an offer) and redemption (the percentage of customers that redeemed the offer). The results showed that food and beverage categories have both solid reach and redemption. Gas and tobacco have low reach, but a high rate of redemption. Snacks and candy have high reach, but low redemption.
The structure of an offer is often just as important, if not more important, than the content of the offer. The research indicates that free campaigns, despite a low reach due to efforts to limit distribution, have a high redemption rate. Discounted prices follow a similar pattern, with relatively low reach and high redemption.
Buy one, get one (BOGO) offers, on the other hand, have good reach, but low redemption. Set price offers have the highest reach of all, but fall behind discounts and free offers when it comes to redemption.
Retailers also have to consider how to distribute a mobile offer campaign. Koupon Media's report makes the case for cross-channel distribution, with campaigns using numerous channels to push the offer. Apps often yield the best results on their own, but email, SMS, social, web, media buys, and connected car channels should be considered as well, according to the company.
One of Koupon Media's most notable mobile offer success stories of 2016 involved a large convenience store chain that had a dual goal of boosting awareness and driving trial for a new line of sandwiches, while jumpstarting acquisition of its SMS database. The mobile campaign that was launched included cross-channel digital promotion, as well as in-store signage. The result? The retailer had 1.7 million redemptions of its mobile offer and gained 160,000 new SMS subscribers over the course of the three-day promotion.
In general, the success of mobile offers for small-format store operations boils down to:
- The ability to shift customers from online to offline consumption;
- The ease of instant use; and
- The capacity for offers to be targeted toward customers.
It's expected that small-format growth will continue, and the growth of mobile offers with it.
Koupon Media's client list now includes 28,000 convenience stores. A total of more than 40,000 retail locations utilize the company's technology. The Koupon Platform helps retailers and brands create and deliver mobile offers across distribution channels and redemption points.