Personalized Mobile Coupons: ARF Interview with Daryl Battaglia, Entrepreneur in Residence at Nielsen

Mobile is changing the face of marketing, and couponing is no exception. To better understand how consumers are using mobile coupons, we talked to an expert on the subject, Daryl Battaglia, Entrepreneur in Residence at Nielsen.

ARF: Who is using Mobile Coupons?

Daryl Battaglia:Our focus has been on Consumer Packaged Goods coupons delivered through smart phones. We looked at users' demographic profile, purchase behavior, and prior coupon usage - using a combination of retailer data, panel data, and customer surveys.

In CPG, mobile coupon users are a cross-section of shoppers and smart phone users, so for the most part the demographics reflect that. Shoppers are more likely to be female. Smart phone users are younger and more affluent. However, mobile coupon users are not as young as smart phone users in general. People of all ages do use mobile coupons. In many cases, mobile coupons are delivered through the retailer's mobile platform. Those mobile coupon users tend to be among the retailer's most loyal customers and spend more overall. As a result of this profile, there are certain products they are more likely to buy.

To date, our research shows that mobile coupon users are primarily coupon enthusiasts. They actively search for coupons and use them through a variety of sources - paper and a variety of digital channels, not just mobile. They use some form of coupons nearly every time they shop.

ARF: Do mobile coupons make shopping more fun? Can consumers become "addicted" to mobile coupons?

Battaglia:Have you seen the show "Extreme Couponing" on TLC? It certainly seems like they're having fun, and they're addicted. But with mobile, the woman who climbed into dumpsters to find coupons from old newspapers will no longer need to do that!

Separate from the people on the show, there is a segment of consumers that really enjoy searching for deals and saving the most money possible. Mobile is an exciting new avenue for them to search and save, which is appealing.

Many other consumers comment that mobile coupons are a convenience that makes their lives easier. They like that they can select the coupons at any time or place – in the store or ahead of time. They appreciate not needing to cut or print coupons, or worry about forgetting their coupons at home. Once mobile coupons are available, most customers that were previously searching for those same coupons online, switch their usage to mobile.

The next step to make coupons even more convenient is to provide a personalized set of coupons for each customer. Currently, you need to scan through many irrelevant coupons to find the ones that you're interested in. However, the display and delivery of coupons can be changed to make it easier to find the coupons you want. The capability exists to predict which coupons a customer will be interested in, products they already buy and products they might buy in the future if offered a coupon.

Brands and retailers can also offer special deals to select customers based on their purchase history. These additional offers can help make a customer feel valued and appreciated, even understood; and they are more likely to be loyal when they feel that connection.

ARF: Will smart-phones replace scissors?

Battaglia:Not anytime in the near future, but mobile is certainly gaining traction. For now, mobile coupons are mainly being used by active existing coupon users. It's adding to their existing coupon usage, not replacing it. We have not yet reached the tipping point where mobile coupons have widespread adoption or are replacing paper coupons.

For mobile coupons to grow, they need to be more available. Relatively few retailers have the infrastructure in place to either scan your mobile device or to allow manufacturer coupons to be downloaded directly to your loyalty card. As this technology is deployed by more retailers, along with delivering a compelling and personally relevant user experience, more consumers will begin to try and adopt mobile coupons.

Also, mobile coupons are just one element of the mobile shopping experience. If mobile coupons are used in combination with the ability to maintain your shopping list, plan your meals, view recipes, earn rewards, and find items on sale, they will become a more integral and regular part of how consumers shop.

Want to hear more? Daryl Battaglia will be speaking at the ARF Re:think 2012 Convention on Monday, March 26 at 11:15 am. Register now!