This is just one of many "digital voucher" campaigns that are hitting our shelves (and the press in the retail and mobile worlds). Coca Cola seem to be leading the way with trials in differnet countries including the one mentioned above in the UK.
Essentially, mobile digiital vouchers are simply a replacement for the traditional paper vouchers you use today, but are more cost efficient and much more effective. Vouchers come in many forms and generally give the consumer the ability to redeem them for money off purchases, free gifts or other benefits. Typically, they come in the form of barcodes or numerical codes and appear in newspapers, magazines, mailshots and, increasingly, on websites.
Accordingly, mobile vouchers are very similar, except that instead of having a paper voucher the voucher is received and held digitally on your mobile phone. This could be in the form of a graphic representation of a barcode or as a numerical code. The voucher is then redeemed at the point of sale as a paper voucher would be, by keying in the code on the point of sale terminal or scanning the barcode. More about the pros and cons of the two methods later, together with a glimpse into the future where Near Field Communications (NFC) technologies will enhance the redemption experience.
The problem with digital barcodes is that the flatbed type scanners which are popular in large supermarket stores cannot read a barcode displayed on a mobile. However, thanks to advanced high-resolution screen technology used on most mobile phones these days, the hand held scanners can quite readily read a barcode from a mobile phone screen. In the old days the poor, highly reflective quality of the screen prevented accurate reading of barcodes. Not the case any more. However, many digital voucher promotions still use an alpha-numeric code that is sent to the mobile via SMS and then keyed into the till at the retail point of sale. Effective and cheap, and requires no integration work, but can cause delays at the cash desk for large volume campaigns.
NFC is where it gets really sexy. A small chip in the mobile phone automatically connects and talks with a receiver chip in the point of sale device simply by waving the phone within a couple of centimetres from the reader. The beauty here is that the chip in the reader can take it's power from the transmitter and doesn't need its own battery or power supply. That means it can be tiny and truely portable - perhaps being embedded in a poster or display sign - but more on that in a later post...
So why bother with mobile vouchers, what's wrong with paper coupons, afterall we've been using them for years from world war two food ration books to Tesco Clubcard vouchers. Well, according to analysts (e.g. Frost & Sullivan and Gartner) the average redemption rates for paper vouchers are as low as 1.5% - that means for every 100,000 vouchers you go to the effort and cost of printing only 1,500 are used. Ignoring the fact that certain individuals may be redeeming more than one voucher, that means you're missing the opportunity to get the remaining 98,500 remaining consumers that received your voucher to sample your product. On the other hand, case studies for mobile vouchers show redemption rates as high as 30%, with 20% being fairly common and 5% being worse case. iMovo recently issued a press release that claimed a trial undertaken with Coca Cola (yes, them again!) had a redempton rate of 87%!!! Another benefit is that of cost. If managed properly a mobile voucher marketing campaign can incur lower costs. If you think about the direct and indirect costs behind a paper voucher campaign and then compare this to a mobile voucher campaing, you'll understand what I'm getting at. Both methods have certain costs that are the same, such as the actual cost of advertising your campaign - posters, newspaper ads, package design and printing etc. However, paper campaigns incur additional costs for the actual design and printing of the voucher itself. The cost of the paper that the voucher is printed on, the cost of handling the voucher once redeemed, manually sifting and counting them etc. A mobile voucher is simply sent electronically to a mobile phone and so incurs only one cost for distribution, the cost of an SMS or MMS message.
Another benefit is that of fraud, or a reduction in the risk of fraud. Paper vouchers can be copied relatively easily and there are several major examples of this type of fraud. If the technology is deployed correctly then a digital voucher can be practically fraud free. Real-time validation of vouchers at the time of redemption can block duplicate or suspect voucher codes and campaigns can be suspended easily, quickly and without large costs.
For the marketer or brand owner, another benefit is the amount of quality data that is available during and after a campaing. Data on redemption is available by individual (based on mobile phone number), product, retail store, time of day, day of week etc etc. If mined effectively this can be a very valuable commodity. Also, the captured mobile phone numbers can potentially be used for push marketing services although the regulation around this activity can be quite restritive (another post will cover this).
So digital mobile vouchers are starting to become a reality. We're likely to see more and more digital voucher campaigns over the coming months with more brand owners wanting to get in on the action. My company, Innovativo Limited, offers its own range of end to end solutions in this space bringing together a number of partners to ensure the complete supply chain can be delivered (see www.innovativo.co.uk for information).
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