Cellphone coupons arriving at a fast clip

The Dallas Morning News – February 1, 2010 – If you hate keeping up with coupons, soon you may love them.

Retailers and product manufacturers are quickly embracing digital coupons - often sent as text messages to shoppers' cellphones.

Dallas-based 7-Eleven Inc. just completed a test in San Diego where shoppers received digital coupons for a free Slurpee, Big Gulp or coffee by texting a five-digit number from their cellphones.

Next month, Plano-based J.C. Penney Co. is rolling out mobile coupons to all its stores after testing it at 16 Houston locations last fall. Supermarket chains Kroger and Tom Thumb have offered mobile coupons through Cellfire Inc. since 2008 and 2009. Fast food chain Taco Bueno, based in Farmers Branch, also sends out digital coupons through San Jose-based Cellfire.

Companies are responding to the explosion in consumers' use of coupons during and after the recession.

And they're trying to attract younger customers who depend on their phones to stay connected vs. e-mail. It's an acknowledgement that a coupon sent to a teen's cellphone is more likely to be used than one thoughtfully cut by mom and left next to his car keys.

"The millennials don't go anywhere without their cellphones," said Rita Bargerhuff, 7-Eleven's chief marketing officer. "Mobile marketing is critical for reaching younger consumers."

7-Eleven's San Diego pilot was aimed at shoppers 20 to 30 years old in advertising at movie theaters, on radio stations and at sporting events. The chain also displayed bilingual signs in about 200 stores.

Cashiers scanned a digital bar code from the customer's cellphone to redeem the free beverage. Those without Internet on their phones showed the clerk the test message with a numeric code that was manually entered into the registers.

Plano-based Penney has added a "hot key" on its registers to bring up a mobile barcode entry screen, said spokeswoman Kate Coultas.

Companies are jumping into mobile coupons because they've seen the success of e-mailed versions in recent years. Consumers also are adept at searching Web sites for coupons before they shop in stores or online.

Shoppers can sign up for Target mobile coupons on the company's Web site, and other aggregation sites such as, Yowza and Zavers offer regional coupons. Some sites pitch paperless as a green habit.

7-Eleven's messages included offers to receive future news and discounts. Recipients opted in by responding yes. 7-Eleven won't reveal how many customers participated in the test that ended last month.

The convenience store chain is still considering its next move, said Daniel May, marketing manager.

Cellfire said most of its users are women (60 percent), and the biggest age group is 25- to 34-year-olds. Because younger people primarily communicate via text messages, their older parents are also becoming bigger text users. About 16 percent of Cellfire's users are older than 45.

Redemption rates for mobile coupons are between 5 percent and 20 percent, according to Cellfire. Paper coupon redemption rates historically have been less than 1 percent.

Coupon-processing company Inmar said annual use of both printed and digital coupons rose in 2009 for the first time since 1992.

About 3.3 billion coupons for packaged goods were redeemed last year, representing a 27 percent increase over the 2.6 billion redeemed in 2008. While online and digital coupons are on the rise, Sunday newspaper coupons still represent 89 percent of all coupons distributed and more than half of redeemed coupons, Inmar said.