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Location-based mobile coupons take center stage for holiday loyalty-building

With better targeting and integration into multichannel marketing plans, retailers including Sears and Kmart are making location-based mobile coupons a more intricate part of their media mixes this holiday season.

There is more of an emphasis this holiday season on cross-channel marketing, and location is one way retailers are looking to mobile as a way to differentiate smartphone and tablet shopping. There is also a move towards using location-based offers to build up loyalty with shoppers.

“It’s important to recognize retail is becoming much more omnichannel with in-store and mobile channels blending,” said Patrick Stack, manager of digital strategy at Acquity Group, Chicago.

“Retailers are recognizing this overlap between in store and mobile and increasingly turning to location-based coupons to drive traffic into their retail stores,” he said.

Save on mobile
Sears Holdings, which operates Sears and Kmart, recently added a feature to its mobile Web and applications that geo-fences stores to let loyalty members know that specials are available in-store.

The feature is tailored for the retailers’ Shop Your Way loyalty members.

“As smartphones become more and more integral to the shopping experience, enhancements like this are examples of how Sears Holdings is on the leading edge of integrated retail innovation, with Shop Your Way members’ convenience and rewards foremost in mind,” said Imran Jooma, executive vice president and president of marketing, online, pricing and financial services at Sears Holdings, Hoffman Estates, IL.

Sears and Kmart are placing a large emphasis on mobile to turn the businesses into member-based retailers.

Leveraging location-based offers is not only a smart way to lure in in-store traffic, but also build up a loyalty program.

More than only commerce
Savvy marketers should be leveraging mobile coupons for more than getting consumers to simply shop on their mobile devices this year.

According to Rick Chavie, vice president of omnicommerce at hybris, Montreal, Canada, this holiday season challenges marketers to monetize their location-based efforts.

“It is less about getting consumers to execute transactions on their phone, the key is to entice consumers to come into the store where they know they have the opportunity to convert an entire basket and shopping occasion, not just the specific offer that gets the customer to the store,” he said.

Take Apple’s Passbook and other mobile wallets, for example.

The technology is not necessarily new this holiday season, but more retailers are slowly loading SMS and mobile app programs with passes to keep offers top-of-mind for consumers.

Additionally, time – and location-sensitive mobile coupons can help marketers grow their SMS databases.

“One big trend we are seeing is integration of the mobile coupon into a new or existing mobile loyalty list,” said Adam Lavine, CEO of FunMobility, Pleasanton, CA.

“Retailers tend to have pretty good email lists, but their capture and use of mobile phone numbers has lagged,” he said. “A simple way to start is capturing a mobile loyalty list segmented by store location, so you can simply provide mobile offers to your existing customers. This is fast, cheap and easy, and has a great response rate.”

Additionally, iOS 7 adds the ability for consumers to scan a QR code from a print ad to create a pass that is then location-sensitive.

This could be particularly useful for marketers with a big focus on newspaper circulars and print in increasing coupon redemptions and offers.

Targeting competitors
Marketers have also stepped up their location targeting over the past year, which will also likely impact how marketers offer location-based coupons this holiday season.

For example, geo-conquesting, which is a form of geo-fencing where marketers target competitors’ locations with aggressive offers, has gleamed a significant amount of interest from marketers this holiday season.

“Location-based mobile coupons are uniquely positioned to engage consumers in real time and incentivize them to go to a nearby store,” Acquity Group’s Mr. Stack said.

“This shift to more location-based mobile coupons is indicative of several larger trends,” he said. “With the rise of smartphones as a primary shopping and research device for consumers, marketers are shifting spending and making larger investments in mobile because it’s a very effective way to reach consumers.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York