U.S. consumers remain unimpressed by mobile wallets and annoyed by EMV, so something has to give at the point of sale.
That something could be coupons, according to Linkable Networks, which wants more merchants pushing card-linked offers rather than mobile coupon apps or clippable coupons from newspaper inserts.
"Mobile wallets are interesting, but the widespread payment form in the world is credit cards; everyone has one and it doesn't need a battery and everyone knows how to use it," said Mike DiFranza, president of Boston-based Linkable Networks.
In partnering with News America Marketing, the company behind SmartSource magazine, SmartSource.com and other free-standing print inserts, Linkable Networks can reach the audience that already rabidly clips coupons to save money on their regular shopping trips.
Shoppers wading through the Sunday newspaper inserts will see information at the bottom of an ad informing them how to register their credit cards with Linkable, then send a text code from their phones that will automatically link the product offer to their payment card. Once a card is registered, the cardholder can use the text code by itself to link future offers.
The setup of linking offers directly to a card helps merchants as well, DiFranza said, because they don't pay Linkable unless a deal linked to a card actually sells. Also, the deals tend to be for national brands, so those manufacturers cover the cost of the deal, not the store owner. Plus, Linkable monitors the other products a consumer purchases at SKU level, and which ones did not have a linked offer, providing information to the merchant that can sharpen their marketing in the future.
Banks have also been more active in providing in card-linked offers through their mobile banking apps.
But the long-standing routine of clipping paper coupons may be hard to break. In addition, consumers are growing less comfortable with registering card credentials with third parties.
"Card-linked offers are a strong way to get deals in front of consumers, but the problem is the early friction in asking a consumer to take a few steps to register a card," said Adil Moussa, payments strategic marketing analyst at Omaha, Neb.-based Adil Consulting. "Even if registering is a one-time thing, it takes a few steps and in many cases it is just laziness on the part of consumers to not want to do it."
For many coupon clippers, the ritual of going through Sunday newspaper inserts is "like a social activity that they really enjoy," making it difficult for a technology provider to disrupt that behavior, Moussa said.
But it is not impossible to trigger interest, he added. "The offers have to be diversified and have to be really good," Moussa said. "It has to make it painful to the consumer to not do it."
Linkable's approach is not to disrupt the ritual of clipping coupons at the home — after all, its deals are listed in the same newspaper inserts as the paper coupons — but to speed things up at the point of sale, DiFranza said.
News America Marketing's inserts reach 73 million households a weekend, or about 130 million consumers. "We're starting with specialty retailers and taking a newspaper ad vehicle and turning it into a performance-based platform as if it were an online platform," DiFranza said.
Systems that involve paying only for results tend to be more appealing to small and mid-size merchants, said Mark Horwedel, CEO of the Merchant Advisory Group, which has larger retail members.
But retailers will likely have questions about how Linkable and companies like it handle data and promote new technology to consumers, he said.
"Those who get comfortable with the approach are likely to demand some pretty ironclad contracts forbidding third parties from using the data in any manner inconsistent with their contracts," Horwedel said.
Linkable looks to expand its technology beyond the print advertising market, potentially working with the television industry to allow consumers to get text codes for card-linked offers from a televised ad. The company already works with other visual media, such as ads found on screens in elevators and other venues.