Online sales grew by more than 30% in the fourth quarter, but store sales slid by 6.1% year over year.
Conventional scanners can’t read bar codes on mobile phone screens—the laser reflects off the screen. But optical scanners can, and every Target store is outfitted with optics. That’s enabling every Target store to now accept shoppers’ mobile coupons.
Mobile coupons have been slow out of the gate-few consumers have used the technology, which typically involves receiving a text message with a redemption code or accessing a mobile-optimized site for a code, which store cashiers then enter as the shopper checks out.
The ultimate in mobile coupons would be to make them like paper coupons, which can be scanned by hardware at virtually every point of sale in America. The problem is virtually all scanners are laser-based, and lasers reflect off the screens of mobile devices, making them unable to read the codes.
The solution is optical scanner hardware, which emits no light and can read bar codes on any surface. Unlike other retailers, Target Corp. has completely outfitted every one of its stores in the United States with optical scanners. And it’s capitalizing on this investment with the introduction of mobile coupons with bar codes.
“We know that mobile phones are an integral part of our guests’ lives, and mobile coupons are just another way we’re providing convenient, on-the-go shopping solutions,” says Steve Eastman, president of Target.com.
Customers can opt-in to the program on their PCs at Target.com/mobile, on their phones at m.Target.com or by texting COUPONS to Target’s telecommunications short code, 827438 (TARGET). After opt-in, customers receive a text message with a link to a mobile web page that contains multiple offers, all accessible through a single two-dimensional bar code, which stores data both horizontally as well as vertically. This follows Target’s rollout in February of mobile gift card redemption at the point of sale using 2-D bar codes, which can store much more data than the conventional one-dimensional bar code standard on consumer goods.
“This is great for the mobile coupons market, but there won’t be a lot of retailers that can follow suit because Target is the only retailer that has fully integrated optical scanners,” says Jonathan Bulkeley, CEO of Scanbuy Inc., a mobile 2-D bar code technology provider. “You won’t see a huge groundswell until retailers replace their laser scanners with optical scanners. The average lifecycle for scanners is around three to four years, so it will happen, just not right away.”
Target, No. 20 in the Internet Retailer Top 500 Guide, declined to reveal the names of the vendors providing the point-of-sale optical scanner hardware and mobile coupon 2-D bar code technology.
Experts agree that it is still the early days for mobile coupons, whatever the format; but some say retailers and consumer brand manufacturers need to be planning now for a mobile future.
“Advertisers should not feel the pressure or urgency of a 2010 nationwide launch of mobile coupons given that just a few percent of consumers are engaging with mobile promotions,” says Forrester Research Inc. mobile marketing analyst Julie Ask. “But companies should be laying the groundwork-including pilots-for a longer-term vision to use coupons to engage customers.”