Mobile vouchers and coupons by mmcsx


									Tech savvy

… an
opportunity for                               The opportunity to use cell phones as a marketing tool and purchase platform is enormous,

retailers and
                                              especially in the rural market where the majority of the population own a mobile device.

                                              Mobile versus paper                              benefits that mobile marketing present
marketers                                     Unlike paper format vouchers and coupons,
                                                                                               from a direct-to-customer perspective,
                                                                                               we would expect good uptake from the
                                              the mobile versions are received and
                                                                                               rural segment,” he says. A lot of mobile
Mobile vouchers and coupons have              stored digitally on a mobile phone (or PC).
                                                                                               competitions are already run using out-of-
                                              “Although they could be delivered in a 1D
emerged as a smarter and more                                                                  home, TV and radio, which are the dominant
                                              or 2D barcode format, in South Africa today
secure alternative to paper-based             they are typically delivered by SMS using
                                                                                               forms of advertising in the rural sector as a
versions. This is a particularly                                                               mass medium.
                                              a numeric code,” says Rolfe. The reason
useful tool for both retailers and            for this is that most retail point of sale
                                                                                               The ultimate marketing tool
marketers to reach the widespread             (POS) systems cannot accept the more
                                              sophisticated 1D/2D formats, which require       Rolfe takes us through the opportunities
customer base in rural areas, the
                                              dedicated scanners at POS.                       for mobile vouchers and coupons in three
majority of which own cell phones.                                                             sectors, all of which seem to be viable
                                                 One of the main strengths of a mobile
Wholesale Business spoke to Chris                                                              platforms:
                                              voucher versus a paper voucher is the
Rolfe, CEO of Mobilitrix about the            greater distribution capabilities, says Rolfe.
opportunities and room for growth             They can be distributed more widely using
in mobile vouchers and coupons.               online, print, radio, TV, outdoor or direct      ■	 The key product in our opinion will
                                              advertising opportunities. In addition, a           be the coupon (i.e. the SKU/line item
Mobile vouchers and coupons                   mobile voucher can be distributed more              linked discount of a specific brand). Fuel
defined                                       intelligently using customer feedback               companies are not allowed to discount
 A voucher has a specific monetary value,     from questionnaires or delivered based              fuel, and so far we have seem more
which can be used as payment for any          on customer actions. “The improved                  interest in driving promotions around
products and service, while a coupon has a    distribution is a key driver in ensuring            supplier brand (Cadbury’s, Coca Cola,
specific monetary value that only applies     higher redemption rates for digital vouchers        Unilever) that attract travellers to stop
to a specific product or SKU. “Typically,     compared to traditional paper vouchers,” he         at a particular forecourt.
a coupon allows a consumer to buy the         says.                                            ■	 Although forecourts typically attract
product at a discounted rate, or receive                                                          a higher LSM, we think the scope for
added value (e.g. buy one and get one free)   Using cell phone marketing                          differentiating one fuel station from
whereas a coupon can only be used for that    in the lower end, informal retail                   another using vouchers/coupons will be
specific product and cannot be used for       sector                                              a useful tool to attract the higher LSM
general spend,” Rolfe explains.               Rolfe notes that there is very little direct        market segment as well.
   The convenience and greater distribution   marketing in the rural segment at present,
are clear from the start – both mobile        which means that mobile – and its near           Township stores
vouchers and coupons are issued,              100% reach in SA households – presents           ■	 Mobile vouchers and coupons present
distributed, redeemed, reconciled and         the best direct-to-customer channel for             a huge opportunity for this segment.
settled digitally whereas the paper-based     marketers and retailers. “Disposable income         Currently spaza shops, tuck shops,
versions rely on a manual process for each    is lower in the rural areas that urban areas,       taverns and shebeens do not have access
of the steps above.                           and given the low cost and hassle free              to paper based voucher alternatives (the

                                                                                                                wholesalebusiness Issue 1, 2011   29
Tech savvy

   Coupon Clearing Bureau does not service        campaigns offer higher redemption rates         engage with any advertising medium using
   this market – only the FMCG retail             as all steps along the way are 100%             SMS, WAP, USSD or mobile applications”
   market). The ability to redeem vouchers        measurable. This means that the exact           says Rolfe. Mobile voucher campaigns
   and coupons in the informal sector is          campaign return on investment (ROI) can         can help achieve a variety of sales and
   likely to be bigger than the FMCG sector       be measured against specific objectives and     marketing objectives including:
   in 3-4 years in our opinion.                   marketing requirements.                         ■	 Increase sales of a product or product
■	 Again the mobile reach in this informal                                                           line in a specific retail environment
   market sector is 100% – so a mobile
                                                  Enhanced distribution
                                                  capabilities – and at a lower cost              ■	 Encourage product trial of a new product
   voucher/coupon campaign should be
                                                  A mobile voucher is sent to a consumer’s        ■	 Encourage consumers to purchase across
   attractive given the lack of an alternative.
                                                  mobile phone and should only incur the             product lines (up-sell / cross-sell)
   In addition, we know that brands and
   suppliers want to push this as an option       cost for requesting the voucher. This cost is   ■	 Respond to competitor offers
   to move inventory, promote new                 typically the cost of an SMS, WAP or USSD.      ■	 Sell overstocked products or slow moving
   products, or encourage repeat purchase         In the event that the customer receives the        products
   and brand loyalty.                             voucher to their phone because they have
                                                                                                  ■	 Clear seasonal items
                                                  opted in to specific group; there is no cost
■	 Finally there is an element of cache that                                                      ■	 Reward repeat purchase and loyalty
                                                  to them in that scenario.
   the mobile phone presents to this market
                                                                                                  ■	 Increase average basket size value
   segment and the view is that vouchers
                                                  Real-time redemption versus                     ■	 Increase foot traffic to a specific store
   and coupons on the phone will be very
                                                  manual process
   attractive to this price-wise consumer.                                                        ■	 Increase frequency of purchase
                                                  A mobile voucher is validated in real-time
Wholesalers and Cash & Carries                    at the POS in store. The POS connects           The importance of customer
■	 So far we have found large interest in
                                                  via a switch to the issuer of the mobile        profiling and targeting
                                                  voucher to check the exact status of that
   wholesalers who sell into the tavern,                                                          “To increase the 2% redemption rate
                                                  voucher. For a mobile coupon, the real time
   spaza and tuck shop retailers. The big                                                         that is currently achieved using paper-
                                                  redemption includes checking to see if that
   attraction for wholesalers is that they                                                        based vouchers and coupons a more
                                                  product (or SKU) is actually present in the
   can now get to know their cash (faceless)                                                      targeted distribution approach is required,”
                                                  basket at that time.
   customer using the survey and mobile                                                           comments Rolfe.
   voucher/coupon products. The bakkie                                                               The campaign should rely on more
                                                  Reduced fraud and
   buyer for a spaza shop is typically a cash                                                     relevant data to intelligently manage
                                                  increased security
   buyer, driven by price, needs constant                                                         the distribution process. This data can be
                                                  Paper vouchers can be copied relatively
   up-selling to buy greater volume and                                                           captured and filtered by customer responses
                                                  easily and are open to abuse by staff and
   looks for brands at good prices, over                                                          (to say a mobile survey), in store data
                                                  suppliers. A mobile voucher can be fraud
   service from a particular wholesale/cash                                                       (including basket items) or store location
                                                  free for a number of reasons, namely:
   and carry store.                                                                               that the customer visits.
                                                  ■	 Unique codes can be issued that are
■	 Wholesalers have also expressed an
   interest in using the mobile voucher/
                                                     specific to a customer’s mobile number       Cost effective marketing
   coupon products to move time                   ■	 Vouchers are validated in real-time and      campaign
   sensitive stock (expiring or old) and             can be blocked if necessary at the time      Typically a mobile voucher or coupon
   to communicate directly with buyers/              of redemption at the POS                     should cost between R0.50 – R2.00 in
   customers as the need to meet monthly          ■	 The voucher number is taken out of           the South African market place. That cost
   volume targets from suppliers (Unilever,          circulation once it has been redeemed,       may be adjusted depending on campaign
   Tiger Brands etc).                                and this prevents re-circulation or re-use   volumes, customer survey costs, data
                                                                                                  analytics and other services that provide
Advantages of using mobile                        Type of campaigns that can                      valuable insights into the mobile consumer’s
vouchers and coupons for                          be implemented using mobile                     purchasing habits.
retailers and marketers                           vouchers                                          This cost should include the issue,
                                                  “It is optimal that any mobile voucher          distribution and redemption of the mobile
Mobile vouchers and coupons                       or coupon campaign be integrated into           voucher or mobile coupon, although
offer higher redemption rates                     different marketing channels and does not       reconciliation and settlement may incur
Based on more intelligent data and                reside as a stand-alone opportunity. The        further charges, depending on the nature of
improved profiling, mobile voucher                beauty of the mobile phone is that it can       the campaign.

30 wholesalebusiness Issue 1, 2011

To top