By 2020 Beacons will Distribute 1.6 Billion Coupons to Smartphones

According to a recent white paper from Juniper Research, brands and retailers are seeking to extend their engagement with consumers, moving beyond creating awareness and facilitating payment, to a deeper, richer integration of loyalty programs. This effort, in turn, has seen digital coupons evolve from being a means of driving consumers to storefronts, to being a core element of promoting and reinforcing brand loyalty.

Digital Coupons Becoming Core Promotional Element

While promoting a product or store still forms a significant part of the coupon’s raison d’etre, the increasing sophistication of digital/​mobile coupons, when used in the wider context of a loyalty framework, enables brands to:

  • Enhance engagement with the end-user
  • Track purchasing patterns and behavior at the level of the individual
  • Analyze the relative success of campaigns, as measured against the yardstick of redemption or engagement
  • Deliver targeted, personalized offers based on a user’s purchasing history or location

"Though ultimately the aim is to use the coupon to drive transactions rather than purely heighten awareness, says the report, digital promotions, when used in the wider context of a loyalty framework, enable brands to enhance engagement with the end-​user, track purchasing patterns and behavior at the level of the individual and deliver timely, targeted, personalized offers," Jack Loechner summarized in a Research Brief for MediaPost.

And couponers are engaging. According to AudienceSCAN, 41.7% of U.S. adults usually make buying decisions based on which coupons they have.

"Provided that a promotion platform/​Application Programming Interface has been integrated with the retailer electronic Point of Sale, that retailer can then capture the Big Data generated by consumer transactions and interactions and determine both the optimal mechanism for engagement with end-​users and the nature/​timing of offers. Netflix stated in 2014 that more than 60% of its rentals came from recommendations derived from hyper-​personalization data."

Your advertisers might be surprised to know that 44.5% of Coupon Users are men, according to AudienceSCAN.

"There is a pronounced trend, says the report, from brands and retailers to offer coupons which are based around location-​aware delivery mechanisms, be it Near Field Communication, Wi-​Fi or GPS. Coupons with a location element typically enjoy far higher redemption rates than those without, particularly in the form of impulse purchases. If a consumer with an enabled smart device with Bluetooth switched on and is in the proximity of a beacon transmitter, the transmitter will recognize the device and can push pertinent content and information to that device," according to Loechner.

During the past month, 52.8% of Coupon Users have used the Internet via browser, tablet or smartphone to find coupons or discount codes, according to AudienceSCAN.

"While rollout has been perhaps slower than was originally envisaged, says the report, a number of leading retailers have now begun to deploy beacons in their stores and outlets. Macy’s has been one of the leading retail advocates of beacon technology, with with an early trial of iBeacon with 4,000 beacons installed, says the report."
Additionally the report includes the experience of several other retailers:

  • In August 2015, Target confirmed that it was in the process of testing beacon technology in 50 stores across major US markets
  • Although Sephora, Walmart and Walgreens all tested iBeacons in several stores during 2014, none of these has subsequently rolled out the technology
  • Outside the US, there has been some traction in markets such as the UK and China. During 2014, UK retailers House of Fraser and Waitrose began installing beacons in-store
  • In September 2015, beacons were installed in nearly 1,500 Pizza Hut restaurants in China to push coupons, movie ticket prizes, special offers and discounts directly to customers’ smartphones.
  • The jewelry retailer Chow Tai Fook installed Sensoro beacons in 237 of its 2,300 stores in early 2015. During the promotion it pushed 34,633 coupons to end-​users, of which 71% were claimed. Of these, 59% of all coupons were redeemed, resulting in a sales uplift to CTF of $16 million.

"While there are concerns over the cost of integrating Beacon technology at the Point Of Sale, it offers an attractive opportunity to retailers as a means of engaging with consumers in-​store, opines the report.  And, though previous research anticipated that consumer adoption would be limited to iPhone users, the last 18 months has seen a spate of activities enabling beacons for Android users, making it a far more attractive option for retailers."

It's good to know that 40.4% of Coupon Users are walking around with Android smartphones, and 29.2% are carrying iPhones, according to AudienceSCAN.

The report ends by forecasting that, by 2020, beacons will be used to distribute around 1.6 billion coupons to smartphones annually, up from just 11 million this year.

AudienceSCAN also found that 27.6% of Coupon Users have used their smartphones or tablets to redeem or download a coupon in the past 6 months.

Courtney Huckabay
Courtney is the Editor for SalesFuel Today. She analyzes secondary customer research and our primary AudienceSCAN research. Courtney is a graduate of Middle Tennessee State University.