Tesco mobile coupon trials pay off big time

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Tesco created a mobile coupon solution, running a "test and learn" campaign to generate practical insights to inform future coupon implementation across the UK.

Case study summary

• Supermarket brand runs "test and learn" mobile voucher campaign

• Ran a three-phase test campaign at London store

• Showed that audience insight is improved by analyzing foot traffic through geo-fencing, which enables offers and promotions to be tailored accordingly

• The campaign was a huge success, generating significant insights which fundamentally influenced Tesco's national mobile vouchering strategy.

The challenge

In order to deliver targeted location marketing activity to drive foot traffic, awareness, and coupon redemption, those targeted had to frequent the vicinity of the catchment area of the Villier Street location. Because this was a new concept store, it was key to target those in the area on a regular basis to ensure relevancy and reduce wastage. Using location technology, Weve was able to build a bespoke consumer segment as well as reach consumers -- ages 18 and up -- in real time.

The pilot effort was focused on a quick-service Food To Go Tesco concept store in Villier Street Central London.

Before launching the effort, insights were gathered in the following six areas:

• Functionality of new point-of-sale scanners both self-serve and at checkout/till.
• Staff understanding and working knowledge of redemption.
• Customer experience.
• Application within new concept-store environment.
• Application of first-party audience and location data to improve targeting and engagement.
• The comparative effectiveness of broadcast location messaging versus real-team location messaging.

This information allowed Tesco to tailor mobile coupons to specific audience segments, such as customers that work in the area versus those merely walking past the store.The campaign was intended to prove the power and effectiveness of mobile to not only uniquely deliver against mobile coupon redemptions but also generate awareness and increase foot traffic to the store.

Key to the success of this campaign was the ability to identify and isolate powerful insights that would allow for future optimization. Success was going to be measured via in-store monitoring, staff interviews, footfall analysis through geo-fencing, customer surveys and campaign clickthrough rates.

The solution

Using a first-party verified customer base, unique location data, and geo-fence capabilities, Weve ran a three-phase test campaign at the Villier Street store. The phased approach was critical to isolate insights and enable in-campaign optimization.

Phase 1 tested the customized coupon/URL design and unique coding, along with Tesco's in-store scanning technology. During a weeklong campaign, hand-selected individuals were sent 100 texts containing a link to a coupon, redeemable at any Tesco store within the M25.

Phase 2 established a 500-meter geo-fence around the Villier Street location to analyze foot traffic over two weeks. By identifying consumers who were seen in the geo-fence more than six times, Weve was able to build a segment of 10,000 people who work or live in the surrounding area. This segment was profiled for insight and comparisons.

In Phase 3, 40,000 mobile coupons offering £1 off in-store were sent by text, over a two-week period. Two SMS targeting and delivery methods were used:

1) Broadcast messaging: This targeted the audience segment who were observed entering the geo-fence in Phase 2, more than six times, with an 11 a.m. message delivered in one burst on the first day of week two of the campaign.

2) Real-time location messaging: This targeted any individual 18 and older with consent-based location permissions on the Weve base who entered the 500 metre geo-fence around the Villier Street store between 8 a.m. and 8 p.m. over the two-week duration of the campaign, excluding all of the six-plus times visitors that were targeted with the broadcast message.

Mobile couponing is in its infancy. Coupon offers are an important marketing and retention tool that allows retailers and brands to attract new customers and reward customer loyalty. As the shopping experience becomes increasingly mobile, retailers are looking to use mobile devices to distribute, redeem and award loyalty points. Consumers are less likely to forget mobile coupons and are more likely to redeem them. Moreover, mobile coupons, supported by loyalty programs, could make it much easier for merchants and brands to capture the data they need to build a closer relationship with consumers, offer a tailored experience and fully measure the effectiveness of campaigns.

The results

The campaign was a huge success, generating significant insight and findings that fundamentally influenced Tesco's national mobile vouchering strategy.

Phase 1 provided logistical insights critical to the main test campaign:

• Face-to-face demonstration is required for staff training. Whilst mobile coupons are simple to use and essentially the same as paper coupons, there was uncertainty, which was exacerbated by the variety of customer handsets available.

• Clear POS signage is needed for self-serve shoppers. There was an expectation that scanning a mobile coupon would be different to a paper voucher. An illustrated step-by-step guide is required directly at the till/scanner.

• Testing the unique codes on in-store scanners is critical pre-launch. Not only is it essential to ensure the unique codes are linked to the right product offer in the system, it had to be tested on a scanner in a live environment to ensure the right offer surfaces and the correct discount is applied.

Phase 2 was critical to frequent audience profiling and retargeting. The Villier Street geo-fence revealed an audience skewed towards young, affluent males. This was significantly different from the typical London catchment audience, and revealed the importance of understanding location-specific nuances in foot traffic and how this can be applied to increase relevancy of message.

Both messages delivered during Phase 3 exceeded the supermarket category benchmark, but broadcast messaging was the best delivery and targeting channel for this particular campaign. Its click-through rate was 2.2 percent, which was three times greater than the benchmark.
A combination of targeting known consumers who had been seen in the geo-fence more than six times previously -- and hence presumably work and live in that area -- and the timing of the 11 a.m. blast message resulted in maximum relevancy to a predisposed audience, at an ideal time to influence lunch decisions.

As the coupon offer was most relevant to lunch times and to those who work in the area regularly, the targeting and delivery method of real-time location -- which was delivered to anyone ages 18 and older who entered the geo-fence anytime between 8 a.m. and 8 p.m. was not the most appropriate for this campaign.

A post-campaign survey of 20,000 recipients of the mobile coupon showed a significant increase in awareness of the Villier Street store, along with the following positive results:

• 68 percent of consumers recalled receiving the text message promoting Food to Go.
• 90 percent were not previously aware of the Food to Go promotion.
• 29 percent said they were now more likely to visit the Tesco Villier Street store.
• Those that recalled the messages were over three times more likely to redeem -- or planned to redeem -- their coupon.

• 20 people took at least one other positive action after receiving the message.
After this stage of the trial the key findings were:

• Audience insight is improved by analyzing foot traffic through geo-fencing, which enables offers and promotions to be tailored accordingly.

• Relevancy and engagement are increased by identifying regular visitors seen within the vicinity of the store in question.

• Effectiveness is improved by sending messages at a specific time that is relevant to the offer.

The campaign was a huge success, generating significant insights which fundamentally influenced Tesco's national mobile vouchering strategy.

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