Mobile

Brick-And-Mortar Retailers Can Reach Consumers With Geo-Aware Deals

Skout Deals

It used to be pretty straightforward for consumers to find deals. They turned to the Sunday newspapers to clip coupons and find out what products were on sale for the week.

But the advent of the internet brought more deals – and offers that are sometimes harder to find than in the weekly circular, Bryan Payne, Co-founder of Skout Deals, told PYMNTS.com in an interview. “The paradox was more deals started to become available, but it was getting more and more difficult to find them,” Payne said.

That was the impetus behind Skout Deals, a location-based deal-finding app that allows brick-and-mortar merchants to provide nearby consumers with offers and coupons. The idea is consumers would be able to use Skout Deals instead of searching for a deal through multiple apps, websites, emails, newspapers, flier inserts and mailings.

In order to post a deal, merchants must offer 25 percent off or more on an item. Still, merchants can promote all sorts of products and services from dinners to dishwashers. Small merchants to national retailers can post deals on the app – and Skout Deals counts multinational chains, such as Best Buy, as its clients.

The Business Model

Compared to other services, which may charge a fee for each click or deal, Skout Deals runs on a subscription model. Merchants pay a monthly fee on a per-location basis to use the service.

To allow small and large merchants to compete on a level playing field, Skout Deals doesn’t allow one merchant to pay more to be promoted on its platform. “There’s no advantage to one business over another because it’s location-based,” Payne said.

For large merchants – such as Best Buy – Skout Deals will integrate into their computer systems. The app’s software can comb through hundreds of thousands of a merchant’s products for items that are discounted more than 25 percent. And, for small businesses, Skout Deals offers a desktop version of its platform.

Through the app, merchants can offer both coupons – which come with barcodes – or in-store promos. They can also post the same deals that appear on their in-store signage or newspaper ads.

To promote the deals, Skout Deals uses social media platforms such as Facebook and Instagram for most of its social media advertising. Payne finds those two platforms to be the most successful social media mediums because of their reach.

“They’ve been successful in that they have enough users, that we’re able to target users through those two mediums,” Payne said, adding that he has used Twitter and Google AdWords as well. “We’re not limited by just Facebook or Instagram, but I would say we would use [them], at this point, about 70 percent of time.”

Compared to other sites, Skout Deals competes on the premise that it doesn’t take a cut of the deals – leaving more on the table for merchants.

Digital Coupons

Skout Deals’ app comes as consumers consider digital coupons an important part of merchants’ omnichannel offerings. Forty-four percent of consumers rank digital coupons as the most important omnireadiness feature, according to the PYMNTS Omni Usage Index.

In 2016, 47 percent of mobile users ages 14 and older said they would use their mobile device to research competitor store pricing in-store when shopping for the holidays. And 36 percent of respondents claimed they would use their mobile device in-store to look up product reviews before purchasing.

Additionally, about 30 percent of consumers said they planned to use their mobile device to sign up and receive in-store promotions and discounts. And 16 percent of consumers plan to use their phones to scan QR codes.

Mobile has grown as a means of purchase, couponing, door-to-store and in-store research in recent years. And a BDO survey from October of 2016 found that nearly 60 percent of marketers plan to leverage mobile in their marketing strategies for that year’s holiday season. 

The Road Ahead

Currently, Skout Deals offers its platform to consumers across the U.S. In addition, the app also offers some deals in Canada – although that’s not its primary focus.

The app was built so that it could be introduced to multiple countries and in many languages, but Payne is focused on the U.S. market for the foreseeable future. He said that there are 29 million businesses in the U.S., providing plenty of opportunities in the States.

“Our goal is to get as many of those businesses as possible on the app,” Payne said.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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