A daily deal start-up headed toward a summer launch aims to combine online discounts with consumer reviews of local merchants. LocFree Network LLC could start offering deals via LocFree.com in New York City in early summer, says Timothy Peterson, company co-founder and chief marketing officer.
What will make this local deal provider different from competitors, he says, is the review requirement: Consumers who receive deals must provide e-mail addresses, and those consumers must review their merchant experiences after using the deals. “Say you get first entrée for free,” he explains. “Then you must write a review, negative or positive, for the LocFree site.”
LocFree will not allow consumers to take advantage of future deals until those consumers review merchants who offered the previous deals, he adds. Merchants can contact consumers via e-mail to offer other deals, too.
LocFree hopes to launch in New York City with at least 90 days worth of deals ready to go, he says. The deals will involve not only restaurants, but also museums, retailers—including, perhaps, local outlets of national chains—and entertainment providers. Offers might come to consumers via text messages, too. “We are looking at social,” Peterson says.
He says LocFree will occupy a relatively lonely space. “A lot of companies are in the review space and deal space,” he says, “but none really do both.”
Peterson will speak at the Internet Retailer Conference & Exhibition 2012 in Chicago in a session entitled “Attracting and retaining talent in a competitive market.”
Research shows that shoppers are mobile–this article featured on eMarketer explains how consumers are turning to mobile to do product research before purchasing items in-store.
While consumer usage of smartphone and tablet devices for shopping purposes is on the rise, the devices’ place in the purchase path is varied. According to several pieces of research by Google, ForeSee Results and Nielsen, shoppers may start in the mobile channel for product research but then purchase in-store. They also may use mobile for product research on the go, then later purchase online on a PC or tablet.
Nielsen’s Q3–Q4 2011 “US Digital Consumer Report” indicates that 29% of smartphone owners use their phone for shopping-related activities. The top mobile shopping activities include in-store price comparisons (38%), browsing products through the mobile web or apps (38%), and reading online product reviews (32%).
A 2011 post-holiday shopping study by Google and Ipsos OTX also depicts consumers using their smartphones at many different points in the purchase path. For instance, 46% of smartphone users who used their mobile device for holiday shopping said they researched an item on their smartphone then went to a store to make their purchase. And 37% said they researched an item on their smartphone then made their purchase online on a computer. Holiday shopping data indicates that no matter the purchase channel, mobile devices are likely to play a role in a mobile user’s purchase process.
The Google study also shows that 41% of smartphone users researched with their mobile device and went on to actually purchase on the smartphone. That data point is higher than in some other mobile commerce studies. For example, a study released in January 2012 by customer experience management firm ForeSee indicates that during the 2011 holiday season only 15% of online shoppers used their phones to make purchases. The phone was most commonly used as a research and price comparison tool. However, Google/Ipsos OTX studied only smartphone owners while ForeSee looked at online shoppers as a whole, a group that includes many feature phone owners as well.
Whether a consumer makes a purchase via mobile or elsewhere, Google’s industry director for retail, Todd Pollak, told eMarketer that retailers need to improve the way they connect the mobile experience with the in-store or web-based shopping experience.
“You would think retailers would be hugely invested in ensuring you’d have an optimized experience on the mobile device, as well as trying to understand how people use it,” he said. “But consumers are way ahead of retailers in terms of their investment in mobile and how that plays into the purchase process.”
Although the path to purchase may appear unclear as consumers conduct the shopping process across multiple channels, Pollak encouraged mobile marketers to think about factors such as a consumer’s distance from a store and the days and times when mobile usage spikes. For example, tablet usage peaks during after-work hours and smartphone usage spikes during weekend days. Connecting and strategizing based on those statistics will help mobile marketers provide more targeted and personalized campaigns akin to the marketing experiences consumers are accustomed to on the web.
What does the future hold for digital couponing? This article takes a look at the growth of coupons in the past decade, touching on daily deal sites, mobile couponing and social sharing.
Couponing had seen unprecedented growth in the past decade due to a combination of factors — one of which was the economic recession in the U.S., combined with an increased consumer interest in mobile technology and devices.
Because of this, marketers began to heavily fund digital platforms. The coupon industry, specifically, saw record growth within the digital realm, and by 2010, SavingStar estimated that “49 million people used printable or digital coupons.”
The benefits digital interactions offer coupon companies are vast. For starters, online couponing allows for great promotion and wider distribution for brands. It also provides companies with better reach and the ability to track consumer preferences and patterns. Data from Leo J. Shapiro and Associates determined that the digital coupon consumer base was primarily comprised of young married couples with disposable income. Groupon has targeted this demographic, lending digital couponing a social reputation.
Daily deal couponing continues to be a popular tool among consumers and marketers, and many major companies have implemented their own version of the trend.
What Business Owners Need to Know About Daily Deal Couponing
Although intriguing for consumers, daily deal platforms like Groupon have not always been beneficial for business owners, who often see a spike in business but little customer retention.
A Rice University study found that 66% of the 150 businesses surveyed reported that Groupon promotions were profitable. However, more than 40% of the organizations said that they wouldn’t run a Groupon offer again.
Daily deal platforms have revealed the social nature of contemporary couponing. For example, Cornell University reported that many Groupon users see themselves as “marketing mavens,” and “on the front edge of market trends and price information.”
Additionally, users claimed in the survey that they would not have tried a restaurant or store without a coupon offer. Contemporary couponing has highly influenced social branding, greatly increasing the popularity of daily deals.
1. Social Leads to Social Sharing
The social, daily deal strategies made popular by sites such as Groupon and Living Social have certainly spawned many copycat initiatives within the digital couponing realm.
One such example is SocialTwist, a platform that states it “allows users to share in order to receive a better bargain.” Basically, consumers can turn a $1 coupon into a $4 coupon simply by sharing it with four other people.
This method will likely continue to increase in popularity in 2012 — we already saw evidence late November 2011, when Foursquare announced it would incorporate a new “social sharing” button on its site.
2. Getting Mobile-Ready
Given these newer strategies, companies are mobilizing their virtual and physical platforms to better reach and retain these social, mobile customers. Most companies are aware that their mobile presences have to be dynamic and user friendly. With roughly 91% of the population using mobile devices and 26.3% accessing the Internet, it is important to have a mobile site for on-the-go reading and utilization.
Additionally Google reported that 95% of smartphone users have searched for local information, proving that location-based, deal searching is vital to digital couponing.
The same study found 38% would use a mobile device to find a store location, 34% to compare prices, 28% to research deals and coupons, and 27% to find a product review.
3. Resolving Mobile Couponing’s Redemption Pitfalls
Mobile couponing, an obvious extension and result of digital distribution, has been popular despite its “mechanical” issues. With the rise of digital coupons, there was also a surge in consumers who used their mobile devices to reference coupons visually on their smartphones. Unprepared for this development, the redemption process, such as the scanning of digital coupons on mobile devices, has proven difficult until recently.
“Mobile coupon redemption has always struggled with ensuring a seamless experience at the point of sale,” says reporter Steve Smith. So, business giants like Walgreens are “retraining salespeople to handle the process and equipping stores with hardware that can recognize 2D codes on LCD displays.” This nationwide initiative was just launched and underwent testing during the 2011 holiday season.
Walgreens released an app for iOS, BlackBerry and Android, which includes a new coupons section that issues up two to three new exclusive weekly deals for customers using the mobile apps.
Rich Lesperance, head of digital marketing and merging media for Walgreens, told Media Post that “the program is the largest deployment of in-store mobile coupon scanning of which he is aware.”
Looking Ahead to the SoLoMo Strategy
In short, the “social-local-mobile” trend is the next cutting edge move for digital businesses, and a necessary consideration for coupon brands. SoLoMo gets specific when it comes to targeting your ideal market and allows your ideal consumer to find you. The combination is a win for both parties, as well as the logical next step for consumer activity based on current digital engagement.
This infographic by Microsoft Tag deals with the growth of mobile coupons, including engagement rates, preferred methods and general statistics.
Consider this — a full 20% of smartphone users currently acquire and redeem mobile coupons on a regular basis, with that number expected to grow to 30% by 2013. In addition, a full 10% of ALL mobile phone users redeem mobile coupons on a regular basis, growing to 16.5% by 2013. These are pretty powerful numbers when looking at the big picture, and even more powerful when you look at the engagement rates mobile coupons generate.
People love saving money, and having the ability to acquire, store and redeem coupons directly from a device we all carry around with us everywhere we go is a powerful thing. Take a look at the graphic below and see if it falls in line with your own usage of mobile coupons.