Coupons offered by digital means are beginning to make a noticeable dent on traditional paper coupons, such as those in newspapers, direct mail and flyers.
In 2009, overall coupon use increased by 27%. This was the first time in seven years that the redemption rate of coupons rose, and companies responded by issuing even more. The reason behind the growth is an economy that remains sluggish and recessionary. Text marketing campaigns that make it easy for their cash-strapped opt-in lists to access money-saving digital coupons will likely experience not only a healthy response rate, but also a boost in customer loyalty and traffic.
There are clearinghouse sites that gather coupons in one place for convenience purposes, but it still means a buyer needs to search for a specific brand name coupon or a product-specific coupon. A text marketing message to opt-in customers, on the other hand, is already targeted to buyers who have confirmed their interest in a company and its products or services.
Digital coupons save consumers time (no more flipping through newspapers) and those that are sent directly by an SMS message are even more convenient for the customer. A Knowledge Networks study shows that nearly one third of all shoppers who use coupons have switched to digital only. Interestingly, digital coupons seem to attract new buyers: over half of the digital coupons redeemed were used by shoppers who were trying a product for the first time. When you’re looking at paper coupons, the first-time buyer drops by 20 percent.
More figures of interest to mobile marketing planners are by way of ABI Research which reports that digital coupons have a higher rate of redemption than traditional coupons, ranging from as low as 5 percent and going as high as 40 percent on great deals that are also highly targeted, but with the average hovering around half that. Comparatively speaking, digital coupons are redeemed at a rate 10 times better than that of paper coupons.
It’s not surprising then that digital coupons are experiencing bounding growth. Kantar Media reports that there was an 84 percent increase in the number of digital coupons available in the first half of 2010 over the same time a year ago, and these coupons are being issued by marketers across all sectors of goods and services. According to Borrell Associates, mobile coupon growth will be up to $2.4 billion by 2013.