Contactless technology launches into mobile space

As the lines blur between traditional prepaid gifting and promotional activity, the digital voucher industry’s star is most certainly on the rise.

This could be the year of the mobile phone voucher. Whether it is discount coupons downloaded via iPhone apps, barcodes sent to mobiles offering free products or gift vouchers for retailers, it seems that portable discounts are in vogue, with Kellogg, Oasis, Blockbuster and MasterCard among the brands getting involved.

Although traditional paper gift vouchers and plastic cards are still popular, the digital voucher industry is seeing serious innovation. While websites often provide printable vouchers and discount codes that can be used on and offline, mobile apps now allow these deals to be sentdirectly to consumers.

Kellogg is running its first mobile voucher promotion where consumers have the chance to win £2,500 when they text a code found on Rice Krispies Squares bars. A barcode is then texted to consumers, which they can then exchange for a free bar in stores.

Beth Armstrong, Kellogg consumer promotions manager, says: “This is a good way to communicate with the product’s target audience of 16- to 24-year-olds, rather than using on-pack coupons, which target mothers.

“Paper and internet coupons still work well, but the target market for the product is hyper-connected in terms of mobile phones. We have good distribution on the multipacks but wanted to push our single product – the text mechanic works very well in the convenience market,” she says.
Downloads of the coupon can also be tracked to specific locations, towns and times of day so that Kellogg can build a picture of how they are redeemed to inform future campaigns.

“It’s great for the retailer as it is cost-efficient and trackable and there is no paperwork to fill in [as with paper vouchers],” says Pete Armstrong, creative director of agency Iris Manchester, which worked on the campaign.

Kellogg aims to attract children passing smaller stores on their way to and from school. “It’s all about fitting in to the target audience’s life and their consumer journey,” says Armstrong.

Electronics retailer Comet has also launched a voucher downloadable on a mobile handset, which firms can use for employee rewards. Meanwhile, women’s clothing retailer Oasis rolled out a consumer mobile gift voucher last December (see Client View, page 32), which can be bought online and used in-store with chip and pin machines. Parent company Aurora Fashions will roll out mobile vouchers to its Karen Millen, Coast and Warehouse brands before Christmas.

Vouchercloud and similar brands make their commission when vouchers are redeemed and Le Tocq has recently added a merchant dashboard, allowing client brands to see how past offers have performed. He says: “Brands can choose how many non-transferable vouchers they want to send out and see transaction receipts when redemption took place.”

Meanwhile, the Myvouchercodes website is hoping that innovating with location services will get more consumers using its codes. It is about to launch a mobile app where customers can locate the shops closest to them and then download appropriate vouchers.

“That is the future direction of the industry,” says Myvouchercodes founder Mark Pearson, adding that taking things mobile means there will be no chance for people to leave their paper vouchers on their desks.

brand stories

John Sylvester
director, motivation and incentives at P&MM

Mobile vouchers are causing a bit of a buzz and this is largely driven by brands being able to offer coupons by tracking people’s locations; and apps sending specific discount vouchers to consumers depending on where the recipient is.

This clever stuff on the couponing side is some way ahead of where face-value [gift] vouchers are, which makes it all sound a little less exciting. Face-value vouchers are moving into the evoucher and mobile voucher space.
The challenges in the evoucher and face-value voucher market are specifically around the viability for the retailers to invest in the infrastructure.

The vouchers need to interact with electronic payment systems and retailers need to be convinced that is secure.

Evouchers are not developing as fast as I would like. We buy and sell about £60m worth of paper vouchers each year and we would like to convert those to evouchers. Effectively, we are buying the bits of paper in bulk and sending them out again after all the electronics have gone on. It would be very easy to send them out on an email or text message.

But there’s a view on how acceptable electronic gift vouchers are to the market as a whole. If you have a young target audience, it’s probably more appealing, but it may not come quite so naturally to certain, older age groups.
For a retailer, to get something like this up and running usually requires investment and they are not looking for ways of spending money at the moment. They have invested in gift cards and I think they are probably still waiting to get the full return on those before they move on to the next stage.

I have heard it said that the plastic card will be the shortest-lived currency in the history of mankind and that we will be on mobile technology very soon.

client view

Rod Anthony
ecommerce research and development manager at Aurora Fashions

We have identified a technology solution for mobile phone gift vouchers, brought to the market by Eagle Eye Solutions. It is a very good return-on-investment model that we can use as an addition to our traditional paper vouchers. We rolled them out to our standalone Oasis stores before Christmas last year.

The premise behind it is that more people are likely to carry their mobile phones with them rather than a paper gift voucher, so in terms of redemption it’s fantastic and the potential to run marketing campaigns off the back of it is phenomenal.

The mobile vouchers are proving very successful. They are readily available and I think most of our customers understood the technology straight away. For every £1 spent buying paper vouchers online, £3 is spent on mobile. You could be out for dinner with your partner and have the voucher delivered to your mobile phone with a message. I think there is a lot of potential for marketers to use this in the future.

We don’t use plastic gift cards. We go for mobile or traditional paper vouchers. Mobile vouchers keep the inventories down. It’s a very cost-effective initiative because people are more inclined to have their mobile with them than any other accessory. It is also great for the environment.

We have a very sophisticated analytics tool and a back-office system where we can look at both buying and redemption activity. All our brands will be able to offer mobile vouchers before Christmas. The next one is provisionally Karen Millen within the next two months.
There is always going to be a place where people would like something tangible as a “proper” gift. But mobile vouchers allow you to appeal to

new segments. It is the get-out-of-jail type approach – it allows female retailers to market towards the male demographic for last-minut purchases.

topline trends

innovation in vouchers

  • Mobile phone discount vouchers and coupons are rising in popularity, especially with the advent of new apps such as Vouchercloud.
  • Personalised gift cards are becoming more popular, such as those offered by MasterCard that feature a photo chosen by the giver and can be used in a variety of stores.
  • Prepaid tags that can stick to mobile phones, watches and key fobs are being tested for small purchases rather than gifting.
  • The line between gifting, loyalty, discount vouchers and other types of promotion is blurring.

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