Retailer Target (TGT) is taking coupons into the 20th century with a new technology that will allow shoppers to present digital discounts at checkout.
It’s a simple but intriguing concept. First, consumers sign up for the special mobile coupons that are sent directly to a portable electronic device like a smartphone. Apple (AAPL) gadgets including the iPhone are compatible, as are Research in Motion (RIMM) BlackBerry handsets, among others. After opting in, shoppers will be sent a picture of a barcode on it for discounts on specific items. After shopping, the consumer simply swipes that barcode picture at checkout and the savings are applied.
Target has always tried to differentiate itself from fellow big box stores Walmart (WMT) and Costco (COST) by claiming a more upscale feel. This high-tech promotion may pay off for TGT by both driving cost-conscious consumers to the store as well as boosting the retailer’s image as a trendier place to shop.
Currently, coupons are not tailored to the interests of specific customers, although it is something Target is considering. That could add to even more useful promotions for consumers, and a better connection with shoppers. According to mobile coupon provider Cellfire, digital discounts are redeemed at a 5% to 20% rate, compared with about 1% for print coupons. Cellfire does business with grocery chains, such as Kroger (KR) and Safeway (SWY), so it knows a thing or two about the industry.
Target says it will be the first major nationwide retailer to exploit the bar-code technology in all its stores, although J.C. Penney (JCP) is testing technology at 16 Houston checkouts. At other stores, shoppers can present digital discounts but clerks must manually enter promotional codes to apply savings rather than simply scanning a barcode on a smartphone.
Mobile coupons are a relatively new creation, but are catching on rapidly in this era of tight purse strings. Consumers place a priority on value in the current economic environment, and there’s no doubt that digital coupons provide the savings shoppers are looking for in a much easier form. While some folks may like the quaint ritual of sitting down with the Sunday paper with a pair of scissors, most Americans think the task is a necessary chore simply to save a few bucks.
So how can you get in on the digital discounts at TGT stores? First, consumers must “opt in” by registering at Target’s website or by texting “COUPONS” to 827438. Once registered, you’ll be sent a link to a Web page with various offers. The program works with any phone that has a browser and data plan.
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