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Tuesday, March 9, 2010

Target Puts Mobile Coupons on Customer Cell Phones

USA Today

Using your cellphone during checkout at Target could soon earn you discounts.

Starting Wednesday, the giant retailer will allow customers to take advantage of special mobile-coupon offers on their handsets.

The coupon is redeemed when the bar code on the phone is scanned at checkout. Offers are good only once and expire on the dates listed. "We believe it's a competitive advantage for us," says Target.com President Steve Eastman.

Target (TGT) says it will be the first major nationwide retailer to exploit the bar-code technology in all its stores. It almost certainly won't be the last.

For example, J.C. Penney is testing similar scanner-based technology at 16 point-of-sale registers in Houston. But at the rest of its stores, checkout clerks still must manually enter alphanumeric codes tied to discount coupons, rather than using scanners.

Scanning bar codes makes the process faster and easier, says Dan Kihanya, vice president of consumer marketing at Cellfire, the mobile-coupon company working with J.C. Penney on its Houston tests. "Any time you have data entry, you have to worry about errors."

Mobile coupons, while not new, are still in their relative infancy. "It's an area ripe for growth," says ABI Research analyst Neil Strother. Not everyone clips coupons, virtually or otherwise. But most people crave a bargain when the economy is tough. And coupon technology works with more and more cellphones.

U.K.-based Juniper Research recently forecast that more than 1-in-10 mobile subscribers in developed regions around the world will use mobile coupons by 2014, generating nearly $6 billion in redemption value.

Kihanya of Cellfire says mobile coupons are redeemed at a 5% to 20% rate, compared with about 1% for print coupons. Cellfire does much of its business with grocery chains, such as Kroger and Safeway.

Shoppers interested in Target's program must "opt in" by registering at the company's online or mobile websites, or by texting the word "COUPONS" to 827438. Opting in addresses privacy concerns, Target says. Once registered, shoppers receive a text message on their phones with a link to a mobile Web page with various offers, which can all be accessed through a single bar code. Target says the program works with any phone that has a browser and data plan.

New coupons will be issued on a monthly basis as older ones expire, although the number and frequency may evolve as the program expands. The coupons cannot be used on Target.com.

Currently, coupons are not tailored to the interests of specific customers, although it is something Target is considering as part of its mobile SEO program. "If privacy becomes an issue, we'll make an adjustment," Eastman says.