offers app product positioning

© 2013 Karthik Ethirajan, all rights reserved

Offers App Product Positioning Karthik Ethirajan September 2013


Agenda

2

1. Mobile Influence on Retail

2. Coupons Industry Outlook

3. Offer App Success Factors

4. Offer Types

5. Business Model

6. Targeting Techniques & Offers TAM

7. UX

8. Distribution

9. Merchant Value Proposition

10. Consumer Value Proposition


Mobile influence on in-store retail sales, not to be

confused with mCommerce, is significant

3

Mobile levers

can enhance

“in-store”

experience

Retail

Store Online

2012 Sales ($ in Billion)

Mobile

Source: Mobile Shopping from In-Store, eMarketer, Jun 2010; The

Dawn of Mobile Influence, Deloitte, Jun 2010; US Online Retail

Forecast, Forrester, Mar 2010

Mobile-Influenced Retail Sales

Mobile influence on store sales will increase from 5% today to 19% by 2016

Consumer Retail Shopping Experience

Myth Reality

1. Shoppers have channel

preferences

Path to a transaction (e.g., first

research point) traverse many

channels

2. Deal seekers are bad

customers

The most savvy and active

coupon users have the highest

income

3. Consumers are

overwhelmed with coupons

and deals

Deal fatigue from consumer

point of view is overstated

4. Mobile commerce is a

force to be reckoned with

Most retail sales still happen

in-store

5. Showrooming will kill

bricks-and-mortar retail

Mobile levers can help

counteract effect of

showrooming

© 2013 Karthik Ethirajan, all rights reserved 4

Consumer data shows that mobile is poised to disrupt

the coupons industry

Coupons Today Future

FSI 44%

Instant Redeemable

18% Electronic Checkout

8%

Shelf Pad 6%

Internet 5%

Direct Mail 4%

Others 16%

FSI 88.8%

In-ad 2.6%

Magazine 1.2%

Internet 0.4%

Others 7.0%

Distribution Redemption

Distribution

(billions)

Redemption

(millions)

Redemption

Rate Use

Print 310 3000 1% In-store

Online 1.5 173 13% In-store &

Online

Mobile - 34 35-60%* In-store &

Online

Distribution

Consumers and merchants are disconnected when it comes to coupon distribution and redemption methods

Redemption rates show consumer preference for digital coupons

Digital coupons are set to grow rapidly

Opportunity Gap

• Location aware for mobile redemption rate

• 2/3rd of all coupons redeemed are food related Source: 2013 Coupon Trends, Inmar; How Big is

Coupon Industry, Savings.com C; Vibes


Success of a carrier branded Offers app relies on

delivering these values to consumers and merchants

Save money on-the-go while shopping or consuming services by utilizing our offers and value-added functions that are easy to use

Identify new profitable customers and drive in-store sales using our refined targeting and understand consumer behavior from our reports

Consumer Value Proposition

Merchant Value Proposition

Our differentiation lies in our execution of the success factors and bringing to

bear the unique carrier assets (a) subs (b) subs data and (c) distribution

Success Factors

Premium Relevancy UX with Opt-in,

Search, Redeem, etc.

Premium Targeting & Reporting Onboarding,

Campaign execution

Content Data Experience

Consumer

Merchant

Key Metrics: Downloads Active Users

User

Adoption

CTR Revenue

Campaign

Performance


Offers app will have all offer types under one roof

Direct Premium

Premium Offers from Partners

Regular Offers from Partners

Deals CLO

National

eGifting

Local

Venues

/Events

National

Drives

Revenue

Drives

Engagement

Va

lue

Vo

lum

e

• Partners shown may be in consideration, and not necessarily operational


Offers will be sourced directly from merchants as well

as from content providers via a rev share model

Business Model

with Merchant

Transaction

Type Typical Offer Types Purpose

CPS Closed CLO, Deals, National,

eGift

Premium Drives

Revenue CPC

Open

Local

CPM Venues/Events

Non-

Monetizable National Regular

Drives

Impressions

3rd Party Content

Providers

Direct Sales

Merchants Publisher

CPS/ CPC/ CPM

Email

App

Web

SMS

Notification

Ad

CPS/ CPC/ CPM

APIs

Merchant Portal

Rev Share

100% Commission

Offer Source

Each business model from merchant lends itself well to certain offer types


Targeting techniques differ by offer type and are

constantly evolving. Offers TAM is ~4B across all offer

types with varying growth rates.

Offers

$0.5B

CLO

< $100M Venues

/Events

< $100M

eGift

Cards

$0.6B

Daily Deals

$2.7B

FU

TU

RE

Lo

ca

l

Me

rch

an

ts

Na

tio

na

l

Bra

nd

s

Targeting Demographic Contextual Behavioral

Data

• Personal data

• Interests

• Time

• Place (real-time

location)

• Shopping habits

• Mining social graph

• Predictive measures

Application Works for Deals Ideal for mCoupons Convergence

Smaller segments are the fastest growing

Market includes online & mobile

Share of mobile traffic growing faster than online

TAM is based on sales commission (not coupon face value)

Revenue share with partners not accounted yet

Offers TAM ~ 4B


Key elements of consumer and merchant experiences

9

Search

By brand, price, product type, etc.

Web Portal

Opt-in/out, one stop for housekeeping, dashboard view, cloud saving of offers, etc.

Preloaded App

No downloads necessary

Merchant Experience

Registration

Simple and a few steps SMS enabled Double opt-in for location is industry

standard Key to reducing opt-in abandonment

Preference Settings

Greater control over category selections, profile data and privacy settings

Purchase

Seamless in-app checkout for offer types that require payments

Redeem

Paperless results in higher consumer engagement

Experience contained within the app Key to reducing shopping cart

abandonment

Easy Opt-out

Consumer Experience

Experience is about how features are implemented.

Meaningful features that are well tested are a value-add,

and those that are not are value-subtracted

Onboarding

Provisioning Campaign setup Templates

Reporting

Self-reporting Real-time reporting that allows campaign

parameters to be adjusted

Payments

Fast Automatic

Superior UX will lead to better star

rating in app stores making

discoverability easier


Push Pull

While there are many distribution methods, messaging

is important for reaching non-smartphone customers

10

Messaging is key to reaching

feature phones (~50% subs)

SMS is the most preferred method of receiving

mobile coupons. It has 10x CTR as pull methods.

U.S. consumer on averages sends 600

messages per month. 97% of all text

messages are opened (83% within one hour).

Email

App

Web

SMS / MMS

Notification

Mobile

PC

Desired

Effect

• Brand

reminder

• Promote

impulse buy

• Retention

consumer

behavior

• Drive impressions

for Pinsight

Media+

Push & pull distribution influences different

but complimentary traits of consumer

behavior

Distribution Methods Power of Messaging


Finally, a consumer shopping app that provides

all discount offer types for major brands as well as

local merchants under one roof

12

Top Brands Shop With

Mobile Coupons

Daily Deals

eGift Cards

Loyalty Cards

Card Linked Offers

Discounts at Local

Merchants

Retail Offers

Offers at Venues &

Events

Premium Offers*

Opt-in: Simple registration flow, app preloaded on new devices

* Requires subscription to

Entertainment Books

Coupons On-the-go: Find offers en route, use them in the store

Local Events: Find information about events happening near you

Mobile Loyalty Cards: Why carry store cards when you can scan & load them in your mobile

Create Product Lists: May be you will find coupons related to the items on your list

Deals Near You: View deals near you on a map or sorted by distance

Be Social: You can Like/Dislike, save or share your favorite offers with your friends

Your One Stop Deal Shop!!


Scan a barcode or read a redemption code at the POS

A stored loyalty card ready for use at the store

Search for coupons or browse a category

Share cool offers on your favorite social networks or via email or text

User preference settings

Create and manage your product lists

offers app product positioning

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