Business & Law

How Mobile Coupons Make You Buy More: By Forcing You to Walk Through the Store

There is no better feeling for shoppers than walking out of a store feeling like they scored the best deals on their purchases and made out even better with the help of coupons. A recent study by a Drexel University business professor has found that using targeted promotions or coupons via mobile devices can be even more effective in getting shoppers to cover more ground in a store and increase their unplanned spending.

Dr. Yanliu Huang, an assistant professor of marketing at Drexel’s LeBow College of Business, says “Location-based mobile apps could be used very effectively to deliver specifically targeted promotions that would increase shoppmobile phoneers’ in-store travel distances, and result in unplanned spending.”

Huang was one of three researchers to conduct research by tracking shoppers using RFID (radio frequency identification). Their findings were discussed in the paper “The Effect of In-Store Travel Distance on Unplanned Spending: Applications to Mobile Promotion Strategies,” that has been accepted for publication in the top-tier Journal of Marketing.

The researchers say strategically promoting three product categories via mobile devices can increase consumer unplanned spending by 16 percent, and that a coupon that required shoppers to travel farther from their planned path resulted in a substantial increase in unplanned spending versus a coupon that required customers to travel a shorter distance.

How could this change our shopping experience? Huang gives an example of how retailers can take advantage of these findings:

“Shoppers would check-in at a store using a service like Foursquare, and enter a list of product categories that they plan to buy using an app, such as Grocery IQ, that partners with the retailer. Then, based on their planned shopping list, the grocery app would provide targeted offers to the shopper via smartphone, and these promotions might be for categories that are far away from planned product categories, with the goal of maximally increasing the length of the shopper’s reference path and unplanned buying.”

Until that time comes, shoppers can try not to deviate from their planned spending when hunting for deals… unless red sale tags tempt them in other directions. To learn more about the effects of red price tags on shoppers, check out one of my previous blog posts: Study Reveals Men Are Seduced by Red Price Tags

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