Will supermarkets get behind cellular coupons?

Articles
June 10, 2009

Will supermarkets get behind cellular coupons?

Sporadic efforts so far to raise the likelihood of coupon redemption by involving convenient cell phones in the process have yet to provide a clear answer to two questions: How will consumers take to it, with respect to savings vs. privacy and security concerns? How much uptake will supermarket operators need to see in pioneering chains before they educate store managers about the incremental sales potential and consumer satisfaction that could accrue from accepting cellular coupons? First, Cellfire credited savings from cellular coupons to users’ frequent shopper card accounts, automatically at checkout upon purchase of the required items. The mobile-to-POS integration at Kroger was reported to be the first of its kind. Now, a Unilever four-week test of cellular coupons on five of its major branded items (Lipton iced tea, Ragu pasta sauce and others) uses Samplesaint technology in a ShopRite store in Hillsborough, NJ, to deliver savings in a different way: A cashier swipes the phone’s screen over the checklane scanner, which reads the UPC barcode image. The user gets the discount, and the coupon is deleted so it can’t be used again. Which approach will break the ice with the majority of retailers—Cellfire, Samplesaint, Shortcuts.com, or yet another player to emerge? SupermarketGuru.com believes it will be the one that appeals not only to younger, tech-savvy consumers, but bridges the generational gap through ease of use and proven security, and is speedy and hassle- and fraud-free for retailers. Imagine the value and convenience edge that could go to food retailers promoting their acceptance of cellular coupons, in a recession or post-recession environment where people want their savings and convenience.

Sporadic efforts so far to raise the likelihood of coupon redemption by involving convenient cell phones in the process have yet to provide a clear answer to two questions:  How will consumers take to it, with respect to savings vs. privacy and security concerns? How much uptake will supermarket operators need to see in pioneering chains before they educate store managers about the incremental sales potential and consumer satisfaction that could accrue from accepting cellular coupons?

First, Cellfire credited savings from cellular coupons to users’ frequent shopper card accounts, automatically at checkout upon purchase of the required items. The mobile-to-POS integration at Kroger was reported to be the first of its kind.

Now, a Unilever four-week test of cellular coupons on five of its major branded items (Lipton iced tea, Ragu pasta sauce and others) uses Samplesaint technology in a ShopRite store in Hillsborough, NJ, to deliver savings in a different way: A cashier swipes the phone’s screen over the checklane scanner, which reads the UPC barcode image. The user gets the discount, and the coupon is deleted so it can’t be used again.
   
Which approach will break the ice with the majority of retailers—Cellfire, Samplesaint, Shortcuts.com, or yet another player to emerge? SupermarketGuru.com believes it will be the one that appeals not only to younger, tech-savvy consumers, but bridges the generational gap through ease of use and proven security, and is speedy and hassle- and fraud-free for retailers.  Imagine the value and convenience edge that could go to food retailers promoting their acceptance of cellular coupons, in a recession or post-recession environment where people want their savings and convenience.

Food stores are already the hotbed for coupon redemption: A recent study by ICOM Information & Communications showed that 87% of consumers who used coupons in the prior month redeemed them in supermarkets, more than twice the rate at restaurants (47%) or department stores (41%), reported The Wall Street Journal. We believe that’s motivation enough for food stores to want to work through any problems in becoming the home of this technological innovation as it finds its legs.

There could well be a limit to what shoppers are willing to do on their cell phones, however. A Harris Interactive study of more than 2,000 adults revealed that less than half (46%) “would be willing to shop using their cell phones even if safety was not an issue,” noted coverage in Brandweek. A generational difference surfaced: 59% of those 18-34  expressed that mobile shopping is “somewhat safe,” compared with 34% of adults over 55.