Arby’s Starts Mobile Couponing

US fast-food player, Arby’s has just announced that it’s starting to experiment with mobile couponing with Cellfire.

This is evidence that mobile couponing is slowly starting to go mainstream, although these things always seem to take longer than you think. However, the couponing industry is massive and certainly mobile seems to be an obvious way for it to develop in the future.

Consider that in a relatively small market like the UK, around 8.2 Billion coupons are processed and redeemed each year and perhaps as many as 800 Billion issued in the first place (I’m using an average redemption percentage from 1999, so this might not be totally accurate). This would be dwarfed by the US, home of the Free Standing Insert.

The mobile couponing market is such a huge opportunity though, because if it works, it’ll attract FMCG companies to digital marketing with spends that we can only dream about so far. This is because (with a few notable exceptions) FMCG marketers haven’t done much with the web, mainly restricting themselves to a pretty website and having ticked that box, move onto something else.

However, couponing is an area they understand, that is measurable and accountable and that they already invest billions of dollars in every year. So what’s stopping them trampling all over each other in the rush to start mobile couponing?

The main issues come down to retail redemption. Companies like Arby’s are in control of their own destiny as they own the redemption process and the retail environment (or at least it’s a franchise). Therefore, they can install the technology needed to process mobile coupons, which can range from a high-tech approach (say, a bar code reader) to low tech – a notebook at the till for staff to record redemptions in.

With FMCG players, other retailers control the redemption environment, which complicates the process considerably. Not only do these retailers need to be persuaded that mobile coupons make sense, won’t interrupt the checkout flow and install the right technology, but (and this is the big area everyone forgets about) their staff need to be trained. There’s nothing worse that presenting a coupon (mobile or otherwise) to be met with a blank stare from the store clerk.

I’m sure FMCG couponing will happen eventually and it’ll be incredibly disruptive for all the existing players, unless they get in first. Consider NCH Clearing in the UK, with 85% market share of the coupon processing business. If mobile couponing takes off, it’s going to wreck their current business model. But whoever does succeed in the new world will benefit from a chunk of a billion dollar business, which is a prize worth the game.

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