The Imperative role digital coupon plays in the retail industry

November 27, 2023 09:36
Photo: Reuters

Coupons, despite being one of the oldest marketing tools, continue to be highly effective even in the digital age. It possesses the power to attract and motivate consumers to make purchases. Research shows that 60% of consumers love receiving e-coupons, and 77% of shoppers agree that discounts can influence where they shop. With the digital coupon market projected to grow at an annual CAGR of 7.3% from 2023 to 2030, businesses can leverage the programmability of digital coupons to create, manage, distribute, track, and seamlessly integrate them into their marketing campaigns.

Conventionally, a consumer journey consists of two parts - the brand journey and the purchase journey. The brand journey resembles a marathon, it takes time to build from awareness to brand loyalty. On the other hand, the purchase journey encompasses immediate considerations, such as deciding what to eat for dinner or choosing an outfit for upcoming festivities. Both aspects are equally significant.

In today's vibrant and dynamic retail market, consumers can experience multiple bursts of purchase considerations in one day - this is where digital coupons play an imperative role in expediting the decision-making process during the purchase journey by providing purchase incentives. Here are some emerging trends we are observing in the market:

1.Tap instead of scan

In the current market, digital coupons mostly come in the form of QR codes, which some people find challenging particularly the older generation. However, we've observed that the majority of local customers in Hong Kong prefer a simpler approach - tapping. Hong Kong consumers are already familiar with NFC (Near Field Communication) technology, thanks to the Octopus card's introduction 26 years ago. With the widespread use of smartphones, shoppers now prefer to 'tap and pay' using their mobile devices instead of physical cards. Leveraging these insights, the first patented NFC digital coupon solution has been introduced to the Hong Kong market, ensuring a seamless customer experience during shopping.

2.AI customer service integrated with e-coupons

AI chatbots, such as ChatGPT, have revolutionized how businesses engage with their customers, partners, and employees, and the retail industry is no exception. Through advanced algorithms, it is now easier to create personalized offers that cater to the specific needs of consumers. The future of digital coupon marketing lies in leveraging AI to identify the most favored products among target audiences and determining the optimal moment to offer discounts that prompt purchase decisions. This personalized approach significantly increases the likelihood of coupon consumption, enhancing overall marketing effectiveness.

3.E-coupon reminders during window shopping

Many consumers have encountered location-based marketing, where businesses send targeted offers based on smartphone location data. A similar concept can be applied to trigger NFC tags during window shopping, without requiring consumers to share personal information. By utilizing this approach, consumers will receive timely discount offers when passing by a merchant's location, stimulating potential purchase considerations.

In the face of economic uncertainty, the retail industry as a whole is encountering challenges. However, it is crucial to proactively identify strategies that will set you apart from competitors in the marketplace. Embracing and harnessing emerging technologies can provide significant advantages and unlock a range of benefits.

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Co-founder & CEO, Mezzofy