Tuesday, November 27, 2012

Mobile coupons: People are the weakest link

I’ve just been reading an article over on Monty Munford’s blog by Rob Thurner about the ‘three things that need to happen before mobile couponing kicks off’. They’re both friends of mine but as a veteran of the mobile couponing business, I feel I should add a comment.

Some of you already know that I have many years experience at the coal face of retail. For those of you who don’t know, I spent the best part of 10 years working in fashion retail and working my way up from sales assistant to store manager in the early years of my working life. I’ve worked my way from the wilds of Worcester High Street to the bling of the West End and Knightsbridge. There’s not much I haven’t seen from store openings to store closings to being held at knifepoint for refusing someone a refund on something they’d clearly stolen. Yes, really. I was also lucky enough to work at the world’s first mobile couponing start-up, ZagMe, where we sent text messages to shoppers at Lakeside and Bluewater shopping malls. I think I know a bit about how this couponing and retail thing works.

Couponing in the UK is nothing like at the obsession levels that you’ll see in the US. They have shows over there about ‘Extreme Couponing’. I kid you not. We still like a bargain here, but we’re not quite as bothered about it. But it’s still big business and seems to be made for mobile. Well you’d think…

Like many things, usability isn’t quite there yet. But there are workarounds. Back in ZagMe days, we sent coupons via text message. We couldn’t event concatenate the message (that means combine two messages as one). Some phones could only store 10 text messages at the time. Can you believe it?! We’re talking 2000 and 2001. Yes, that long ago. Mobile couponing is not new. The ZagMe texts we sent had a code in them which was generated based on your age, gender, retailer and time of sending. That meant you might see a different code to your friend who received the same message so it looked like they were uniquely generated codes. Now of course, it is entirely possible to put a unique code into a SMS. If you want to. But it really depends on why you’re sending the coupon in the first place and how it’s financed. Since most coupons and discounts are funded out of margin, it doesn’t usually matter whether or not the coupon is shared or replicated. Indeed, that can just reduce the costs for the retailer that they’re getting free distribution. So chances are, you don’t need a unique code necessarily, you just need a way to manage the coupon or discount.

The way to do that is to set up a discount barcode for the specific promotion and have it reside by the side of all of your tills. You’ll need to train your staff properly so they know what to scan and when. And in the text message, email or whatever other coupon format you want to use, you make sure you put in any limitations on the offer – this usually means the date. Don’t have an open-ended offer. And if there are terms and conditions, make sure those are available for both the customer (perhaps via a link to click in the message) and the store staff (at POS and included in the training for example), so there’s no question about when the offer runs out. As it happens, I still have an Ann Summers coupon lurking on my hard drive offering me £5 off any purchase. There is no expiry date. It’s just a gif file. Maybe I should try redeeming it….

In his article, Rob goes on to explain about keyed entry, scanning and NFC as redemption methods. These are all coming. Some retailers who are further ahead have already embraced them. And as each retailer reviews their EPOS systems, they’re going to be thinking about mobile, tablets and offer redemption as part of the new system so we’ll see more. But these systems don’t get replaced every year like mobile phones or school shoes. They’re in place for many years and replacing them isn’t easy and it’s expensive as they impact on the whole supply chain.

But there’s no need to miss out on mobile commerce via couponing for non-food retailers*. You don’t have to wait until you implement your fancy new EPOS systems. Think about workarounds. Think about how secure your couponing needs to be (in which case, you can turn to Eagle Eye for a solution). SMS can still work here and it doesn’t have to be complicated. Or particularly techie for that matter. You just need to think about the customer experience and how you’d like that to be and then work out how to achieve it. And I suspect that eight, if not nine, times out of ten, you won’t need to have something particularly complex.

However, you choose to implement your discount offer – be that on mobile, email or pigeon post – please remember to communicate to your staff. It is no good having the fanciest mobile couponing system in place if your staff have no clue what to do when a customer turns up wanting their £5 off. Your people will be the weakest link if they haven’t been brought up to speed.

*caveat – grocery retail is a lot more complicated than other sectors of retail and the couponing rules are different.