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From Paper to Mobile: The Transformation of Coupons

Posted Feb 14, 2017

For decades, advertisers have intrigued consumers with coupons. Although the format has changed over the years, the tactic — particularly with mobile coupons — is still as effective as ever.

For decades, people have used coupons to cut household costs. Since the 1960s, families have been cutting coupons from the Sunday paper, ultimately hoping to add a few more cents into their savings. As time passed and technology improved, coupon delivery shifted from print to digital channels,  such as websites and email. Now, people can even receive discounts through their mobile devices.

As the ownership of smartphones increased, companies began delivering coupons and other offers to customers through text messages, in-app messaging, and push notifications. As smartphone ownership is expected to reach 2.5 billion by 2018, one question remains: what will technology morph coupons into next? First, let’s take a look at what’s being done today.

The Rise in Mobile Coupons
According to eMarketer, mobile discounts use is on the rise. Indeed, 88% of smartphone users increased their use of mobile coupons in the past 3 years.

Although the trend of using mobile coupons is increasing, it is important to note that other formats are still popular. In fact, according to a recent AYTM Market Research study,  79% of US consumers still use traditional paper coupons and 38% use coupons printed from websites.

Loyalty Apps
Grocery stores have also jumped on the mobile deal wagon by developing apps with additional discounts for its consumers. By offering more savings through an app, grocery stores are more efficiently able to track their customers’ spending habits.

By coupling this information with location targeting, retailers are now able to deliver customized messaging and offers at the ideal moment through a mix of app notifications and highly-targeted mobile advertising.

Paper Hangs On
While some might argue that mobile coupons will mark the end for their paper predecessors, that day has not yet come. According to eMarketer, the use of paper coupons increased 58% last year, while mobile coupon usage only increased 38%.

However, when only smartphone users are examined, the growth rate for paper coupons is less promising, as a third turned away from paper coupons in favor of mobile alternatives. As such, the death of paper coupons might be more imminent in more developed markets.

The Future of Mobile Coupons
Another signal that paper coupons might soon meet their demise is in the behavior of key retailers. Indeed, some companies are beginning to remove printable coupons from their stores completely.

According to Coupons in the News, Target has completely removed printable offers from its website, pushing customers to download their Cartwheel app in order to utilize discounts. This move from a substantial US retailer may mark the beginning of a new era, as 27 million users have already installed the app and have saved over $600 million USD to date.

From Coupons to Experiences
Of course, for the savviest of retailers, mobile coupons and other in-app perks are only the beginning. For instance, some retailers are beginning to create app-integrated shopping experiences built on not only saving customers money, but also time.

One example of this is Amazon’s Go Grocery Store, which gives patrons the power to shop directly in store and without standing in a checkout line — all thanks to smartphones. While the Seattle store is still in testing, Walmart recently announced a similar shopping experience through its app.

As retailers begin to offer shoppers ways to both save money and time through their mobile apps, there is no doubt that the way consumers currently purchase and save on goods will become a thing of the past.

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