Digital Offers Increase the Channel Conversion Rate

30% of Consumers Use Digital Offers from a Retailer’s Mobile App

Written by: Sue LeClaire

Coupons are here to stay. As much as some retailers would like to retreat from using offers as incentives to shop, other retailers realize that consumers are heavily influenced by the availability of offers. For those retailers who use coupons as part of their pricing strategy, the current issue is the viability of digital offers. Even with all of the attention mobile coupons have received in the last several years, the use of paper-based coupons is still significantly higher than digital offers. Considering consumers have fully embraced mobile, it’s time for retailers to do likewise by fully embracing mobile and deliver digital coupons via other channels besides paper (besides, it’s more cost effective to use mobile rather than continue to create and distribute paper-based offers).

According to a recent study, “The State of Digital Coupons”, “68% of consumers believe that coupons build brand awareness, 68% also state coupons generate loyalty.”

State of Digital Cpns Report

The same study goes on to state, 30% of consumers use digital offers from a retailer’s mobile app that they have downloaded to their mobile device. As both mobile coupon usage and mobile app downloads continue to rise (mobile app installation increased by 70% year over year in 2014, State of App Downloads and Monetization, 2014), in-app mobile coupon usage will increase.

Retailers committed to delivering digital offers to consumers from within their mobile app have a unique opportunity to create a compelling customer experience designed to improve the direct channel conversion rate. Specifically, retailers can enhance their mobile app to deliver personalized digital offers that will build customer loyalty. The short-term benefit of customer loyalty is improving the in-app conversion rate. Longer term, retailers will realize a higher customer lifetime value.

Following are specific capabilities retailers can implement to enhance the in-app customer experience using digital offers:

Personalized digital offers delivered to the retailer’s mobile app based on:

  • Past purchases. Mining a retailer’s CRM database can provide a wealth of data about their customers. Knowing what the customer purchased last and delivering a mobile offer for a complementary product can be a powerful tool in building brand loyalty. According to The State of Digital Coupons report, “47% of consumers are likely to try a new brand when receiving a coupon on their smartphone while shopping in-store.” For example, “Stephanie, Payson’s milk and salmon are on sale this week” where Stephanie regularly purchases the store brand milk and salmon.
  • Specific customer attributes. Messages with data applicable to a particular customer (e.g., first name) is a great way for retailers to engage with their customers. Examples such as “Dan, your Rx is ready for pickup at the 6th & Broadway store” provide the personal connection that allows the retailer to rise above the noise creating a truly unique shopping experience.
  • Generic attributes. The next best practice is delivering digital offers based on more generic data such as a customer’s sex, age, or where they live. Delivering a coupon in January for shoes to customers who live in the south versus boots to their northern counterparts improves the quality of interaction between the retailer and their customer.
  • Location-based via beacons. By bringing consumers to a retailer’s mobile content quickly and effortlessly, the retailer links their soon-to-be customer to the information the consumer needs to make a decision to buy while still in-store. In addition, the retailer has the option to deliver a mobile coupon good for that day only as an added incentive to close the deal.

Capabilities retailers can provide when delivering digital offers to their mobile app that creates a unique customer experience:

  • Mark-as-redeemed. The retailer marks digital offers that have been delivered to their mobile app as redeemed after the consumer has presented the offer during check-out. Mark as redeemed eliminates any confusion on the customer’s part as to which coupons are still valid versus previously used or expired.
  • Automated reminders. Create a sense of urgency by alerting a retailer’s customers who have not yet redeemed their offer when it is about to expire. For example, send a PUSH notification to the retailer’s mobile app “Only 3 days left before your 10% OFF mobile coupon expires.”
  • Rolling expiration dates. Digital offers expire based on when they are delivered to the mobile app. For example, a digital coupon will expire three weeks from the day the customer requested the offer to be delivered to the mobile app. Once the mobile offer is used or expired, it is no longer valid.
  • Save a digital coupon to Passbook. The customer can leave the digital coupon in the retailer’s mobile app or load the coupon to Passbook, based on customer preference. If the coupon is saved to Passbook, it is automatically updated when the mobile offer is used (marked as redeemed) or expires preventing any confusion as to which passes are still valid.
  • Full integration with an online shopping cart. Retailers can eliminate the inevitable hunting for promo codes that happen just prior to checkout as all discount information is automatically carried forward to the online shopping cart. Automatically updating an online shopping cart can be addressed in a number of ways.

Retailers have a real opportunity to create a compelling mobile app experience for their customers. By delivering personalized digital offers and a unique experience, CodeBroker retailers have found that they are able to 1) grow monthly active user engagement as more consumers download a retailer’s mobile app to have access to digital offers, and 2) drive direct channel revenue by keeping customers in the mobile app to complete a shopping transaction by making it easy for customers use their digital offers.