Mobile Coupons: Adoption and Use

Mobile Coupons: Adoption and Use

Te-Lin (Doreen) Chung (Iowa State University, USA)
Copyright: © 2015 |Pages: 9
DOI: 10.4018/978-1-4666-8239-9.ch017
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Abstract

Coupons have been used as a sales promotion tool for several decades. As mobile devices are increasingly becoming consumers' personal companions, the role of coupons is changing. Mobile coupons (i.e., coupons delivered via mobile devices) allow companies to deliver time- and location-specific offers to potential customers. Building on previous knowledge of traditional paper coupons and emerging research in mobile communication adoption, some scholars have applied attitudinal and technology-acceptance models to explore consumers' adoption of mobile coupons. Others have explored the design and mechanism of mobile coupons, or the role of mobile coupons as a unique marketing communication channel. In the near future, as consumers' adoption of mobile communication matures, we can expect research on mobile coupons to grow. The broader influences of this tool on consumer behavior merit further exploration.
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Introduction

Mobile coupons are electronic coupons sent to consumers’ mobile devices that can “be exchanged for a financial discount or rebate when purchasing a product or service” (Mobile Marketing Association, 2013). Although mobile couponing is still considered as in its infancy, more than 28% of mobile device owners redeemed a mobile coupon in the first six months of 2013, and this number is expected to increase rapidly, fueled by the growing population of mobile phone and tablet device owners and the increasing number of mobile apps (eMarketer, Oct. 21, 2013).

In contrast to traditional paper coupons, mobile coupons can be delivered to users via e-mail, mobile apps, and/or messages, making it unnecessary for consumers to clip coupons from Sunday newspapers and stuff them in their wallets. The mobile couponing process, like traditional paper couponing, includes three phases: delivery, redemption, and clearing. However, each phase of mobile couponing is empowered by the advantages of mobile communications. Mobile coupons can be delivered using “push” or “pull” strategies. Pull strategies allow users to access coupons on demand (e.g., searching for coupons using a mobile app while shopping in a mall), while push strategies allow users to automatically receive coupons that are specific to their locations and shopping habits (e.g., receiving coupons via messages when they are entering a shopping mall, or once a week). Coupons may be offered by manufacturers, retailers, or mobile coupon aggregating service providers. As for redemption, rather than carrying a wallet stuffed with expiring coupons, mobile users can redeem coupons and enjoy real-time savings upon receiving them, or they can choose to save the coupons in their mobile devices and redeem them later. The clearing phase of mobile couponing is more flexible than traditional coupons too. Depending on the coupon’s format (e.g., pictures or QR codes), retailers can easily track either one-point or multiple-point coupon redemptions, allowing for more accurate assessment of campaign effectiveness.

Mobile coupons inherit the advantages of traditional couponing, such as driving store traffic, creating excitement, and providing incentives for certain shopping behaviors. For example, according to research by United Parcel Service of America, 47% of consumers viewed the ability to receive coupons or promotions via their smartphones as an important factor driving them to shop with a particular retailer (United Parcel Service of America, 2013). In addition, because mobile coupons are portable, wireless, and location- and time-specific (Shankar & Balasubramanian, 2009), they open up greater targeting possibilities, leverage new distribution options, and promote cross-channel purchasing. When used in combination with social media, mobile couponing creates further opportunities for consumer engagement and loyalty enhancement. For example, mothers—who are usually the purchasing decision makers in a family—tend to share coupons and promotion information with their family and friends on social networking sites significantly more often than they endorse a brand (eMarketers, Sep. 17, 2013).

As consumers become more comfortable with using mobile phones for a wide variety of daily tasks, it is important for retailers to adapt to this consumer behavior and extend their offerings in order to fully benefit from mobile couponing. However, as a type of mobile marketing, mobile couponing is subject to government regulation and must be permission-based (Barwise & Strong, 2002; Jayawardhena, Kuckertz, Karjaluoto, & Kautonen, 2009). In other words, retailers must acquire a user’s consent before they can send promotional information to that user. In addition, the cost of investment in the requisite technology has also made some retailers hesitant to adopt mobile couponing (Okazaki & Taylor, 2008). Therefore, understanding what drives consumers to use mobile coupons and how mobile coupons affect their consumption behaviors is an important topic for retailers as well as for researchers.

This chapter does not intend to provide an exhaustive review of research on mobile coupons. Rather, it offers a systematic summary of representative literature, in the hope of encouraging further research on mobile coupons and their implications.

Key Terms in this Chapter

Mobile Marketing: According to Mobile Marketing Association, mobile marketing is a set of practices that enables organizations to communicate and engage with their audience in an interactive and relevant manner through and with any mobile device or network.

Coupon Proneness: An increased propensity to respond to a purchase offer due to the coupon form of promotion.

Coupon Redemption: Consumers’ usage of coupons in exchange of the monetary value designated on the coupons.

Technology Acceptance: The study of the process that consumers come to accept and use a technology.

Co-Creation: The collaboration between a customer and a company to create unique value to both parties.

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