Savings apps are data gold mines for retailers
Customers love them — and so do brands
A version of this post was originally published on www.ibm.com by Neil Ungerleider on December 11, 2017.
On Black Friday and Cyber Monday 2017, shoppers around the country turned to their smartphones and laptops. According to Adobe Analytics data, American shoppers spent approximately $6.6 billion on Cyber Monday and $5 billion on Black Friday. [1]
For value-savvy shoppers, there was one extra ingredient in the mix: Apps and websites offering online-only coupons and discounts. As an inducement for customers to purchase more in the holiday shopping rush, mobile apps from Amazon and other retailers sent push notifications about online-only discounts.
Using these sites and apps has become instinctual behavior for many users. As Michael Schneider of the travel discount app Service puts it, “Ten years ago, I don’t know if I would try to find a discount code, but today it’s sort of a standard practice to save money just because it is so easy to check and see.”
Starbucks’ mobile app and loyalty system, which offers micro-segmented promotions, is one of the best known success stories of the app industry [2]. Supermarket firm Kroger integrates their loyalty card program into their smartphone app, and combines customer-facing coupons offering deep discounts with a loyalty program that collects massively detailed shopper analytics [3]. Target, meanwhile, offers special mobile app-only discounts as a way to compete with online retailers. [4]
There are also more conventional coupon apps for smartphones designed specifically for grocery shoppers that function more like the coupons in a Sunday newspaper circular than anything else. These apps, such as Coupons.com and Cellfire, are aimed directly at value-conscious shoppers hoping to wring the most value out of every dollar. Because smartphones are portable, they are an ideal format for such shoppers, especially those who might no longer subscribe to newspapers, where coupon circulars have historically appeared.
These discounts targeted at users are a win-win for customers and brands. Customers receive free items or discounts on items to purchase, and brands leverage huge amounts of data collected through mobile apps, credit card transactions, and loyalty card programs to steer customers towards items they want them to buy (at full price, of course) in the future.
As Starbucks’, McDonald’s’, Target’s and Kroger’s investments show, store apps with coupons are also an easy route for marketing innovation. Coupons are offered as enticements for customers to try new products or visit a retailer more frequently. In exchange for these discounts, retailers then use mobile apps in conjunction with in-store beacons, website cookies and more to gain a deep knowledge of shoppers’ habits and purchase journeys.
As it turns out, mobile apps and granular web promotions offer a new frontier of engaging and reaching customers for brick-and-mortar and ecommerce outfits alike. The next time your phone gets a push notification about a sale at your favorite retailer, remember: There’s a lot of data behind it.
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