ShopText CEO Talks AOL Deal; Cracking the Chicken-and-Egg Couponing Conundrum

ShopText has teamed up with AOL Shortcuts to leverage merchants and consumers who are still feeling out the murky waters of mobile payments. The partnership creates a heavier direct-to-card footprint for brands while giving the consumer the loyalty respect they so often want. got the full scoop from ShopText’s Founder and CEO, Steve Roberts.

(View Roberts’ Innovator Profile: Cash, Check or Text: Mobile Payments for the other 97%) Give us a bit of background about ShopText, as well as AOL Shortcuts? 

STEVE ROBERTS: ShopText is a leader in Mobile Shopper Marketing & Loyalty. We have been working with brands and retailers to engage consumers from any ad, drive sales and to create a new direct-to-consumer mobile channel. We have triggered direct mail, print@home and direct-to-loyalty cards for several years. AOL Shortcuts is the leader in direct to loyalty card couponing. It made sense for us to partner to accelerate the creation of a national mobile-to-loyalty card couponing network. Together, we are cracking the couponing chicken-and-egg problem: brands want a bigger direct-to-card footprint to leverage their national and regional shopper marketing programs, and retailers want to have more direct-to-card coupon offers.

PYMNTS: What new benefits for consumers will this partnership yield? 

ROBERTS: For consumers, we take the hassle out of couponing. Consumers simply “clip” their coupon with a text message the moment they see an ad/offer. They reply with their shopper card number near them and simply swipe at checkout to save. The coupon is redeemed instantly at the POS.

PYMNTS: Who are some of the merchants ShopText has partnered with in the past, and will be partnering with now in the future in light of the organization’s new collaboration with AOL Shortcuts? 

ROBERTS: We have had multiple Fortune 500 CPGs trigger direct-to-card and print@home emails with ShopText from their TV and print ads. Our partnership with AOL takes the conversation to a new level for both CPGs and retailers.

PYMNTS: What type of returns have retailers seen from ShopText promotions? 

ROBERTS: We have hit up to 1.7% of media impressions as a response rate for good offers (FREE, BOGO, Samples) with a great call-to-action. This is about 17x online banner click rates.

About 70% of those who text in successfully complete the coupon process by replying with their shopper card number or email for a print@home. We’ve made the consumer experience really simple, because people know how to text and swipe. For retailers without a loyalty card, we can trigger coupon redemption simply by having the consumer enter their mobile number at the keypad. Redemption rates have averaged 21%, but vary based on the value of the coupon. About 40% of the time, when brands/retailers initiate this type of value exchange with ShopText, consumers opt-in to receive future offers, creating a powerful new direct-to-consumer mobile channel.

PYMNTS: In these tough economic times, how has digital couponing fared versus traditional couponing channels and email couponing?

ROBERTS: It is still early, but traditional paper coupon redemptions are flat or declining as a percentage of the total issued. To date, “print@home” coupons have been defined as “digital,” even though
they have to be printed and taken to the store like a regular coupon. This form of couponing has been growing nicely. Direct-to-card couponing is making an impact as more retailers embrace the power and simplicity it creates: fully digital, no hardware, associate training or new consumer behavior. Kantar recently issued a report showing that at retailers who launched direct-to-card coupons, redemptions grew 170% while print@home redemptions were flat. ShopText essentially enables direct-to-card or print@home coupons to be triggered with a simple text message that works across any phone, operating system and carrier.

PYMNTS: What are your thoughts on the role of QR codes in digital couponing? Are they on their way up, already here or past their prime?

ROBERTS: 98% of all mobile phones are text-enabled. Smartphones account for just 40% of all phones. That said, their use will continue to grow. Because QR codes are free and easy to create, you are seeing a lot of agencies and companies start to include them in their media. The reality is that we aren’t Japan when it comes to QR codes. The readers are only now being preloaded in Android devices and iPhones. This means only a handful of people can actually scan QR codes, as reader downloads and new behaviors are required.  I recently saw a stat that even the most popular iPhone QR code reader is doing about 4,000 scans per day, versus 1 billion text messages being sent a day now in the U.S.

We’ve had clients use a QR code in an ad and call us for the text portion. When this happens, reporting sits in two systems and makes program monitoring cumbersome. That is why we just launched, an integrated QR and text message code creator that enables anyone to create a code in minutes so consumers can decide to scan the QR code or just respond with a text, and the client can measure media response rates and clicks from one reporting dashboard. It’s great for driving consumers to your website, Facebook page, app or YouTube channel from your offline media. Mobile creates additional brand engagement, drives commerce that can be measured in real-time and creates a new loyalty channel.

Steve Roberts launched ShopText in September 2006. Prior to ShopText, Steve’s marketing and internet experience includes COO of McCann Erickson’s $200 million relationship marketing company MRM Partners, CFO of McCann’s $650 million marketing services companies and CFO of Modem Media (acquired by Digitas in 2004). Read More


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