• silicon.com
• Management
• CIO Insights

By Julian Goldsmith, 13 April 2007 13:34

COMMENT

Forget clipping vouchers out of magazines - why not get coupons sent straight to your mobile phone? Convenience stores are getting involved with a mobile phone-based loyalty scheme but, asks Julian Goldsmith, who will the real winners be?

Plans by convenience store retailers to team up with consumer goods giants and offer a mobile phone-based loyalty scheme is a ringing endorsement of mobiles as electronic wallets.

In the 'Shop Scan Save' scheme, shoppers will receive a text message containing a barcode that can be scanned to score a discount on a number of goods. They will be able to text keywords to get discounts on goods they want to buy.

It's not before time for Co-op, Costcutter, Londis, Nisa-Today's, Spar and about 9,000 independent corner shops to start mining the CRM benefits of a loyalty card system, with other supermarkets years ahead of them.

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Mobile ticketing and vouchering is slowly being taken up. For example The O2 - formerly known as The Millennium Dome - is expected to be filled with mobile ticketing opportunities.

Mobile phone network O2 has been piloting mobile ticketing, where punters have barcodes displayed on their mobile phone screens which are scanned for them to gain entry.

So it's a good sign that corner shops have also signed up to the technology, as it will undoubtedly raise the public profile of mobile ticket and vouchering.

But it doesn't mean it will be a roaring success. The number of loyalty card holders who actually redeem their loyalty points is often low.

It's true the Shop Scan Save scheme will be even more targeted to individual shoppers' needs, and trial results have shown it to be between five and 10 times more effective in encouraging redemptions but that was in conjunction with a 10-week TV advertising campaign. This may tail off when the adverts stop.

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Also, customer behaviour in corner shops is different to supermarkets. These retailers are called convenience stores because shoppers go in at their convenience. Consumer brand identity and loyalty is less strong in this sector.

The key for the retailers - and presumably their consumer goods partners - is the data they will get about customers when they sign up, which will be used in ranging and merchandising decision-making.

But perhaps the real winners will be the mobile phone operators who will be able to make mobiles even more central to the lives of their users.