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Cellfire Local Coupon Service Debuts On Cell PhonesSep 15, 2006 A mobile phone coupon service from Silicon Valley startup Cellfire Inc. could cost retailers more than discounts at the cash register as they wait for consumers to become comfortable with the technology. The service, which officially debuted this week at CTIA Wireless & Entertainment 2006 in Los Angeles, provides consumers discounts on household-brand items from retailers, such as 1-800-flowers.com, Bath & Body Works, Hollywood Video, and T.G.I. Friday's. Here's how the developers say it will work. Consumers download a wallet-type application with discounts that resides on the phone. Local coupons get downloaded to the phone based on the consumer's zip code. Once the application sits on the phone, clicking on the icon lets users scroll and browse through discount offerings. To redeem the coupons, the consumer must press "Use Now" and show the coupon to the cashier, who types in the code upon checkout at the register. Some software development is required to enable the retailer's point-of-sale (POS) platform to accept a four- or five-digit code and take reductions at the cash register upon sale of the items. "We work with the retailers to integrate the platform into their point-of-sale system," Cellfire CEO Brent Dusing said Friday. "The integration has not been a problem, costs are minimal, and the returns are good." Coupon redemption rates during tests with retailers are averaging between 15 percent and 25 percent using Cellfire's mobile coupons vs. less than 1 percent for paper coupons, Dusing said. JupiterResearch media analyst Barry Parr said mobile marketing will increase, but retailers could face training and logistics issues as they try to bring employees up to speed on new technologies and changes in POS platforms. Moreover, the application requires "new behavior from consumers to show the coupon on the phone rather than on paper at checkout," he said. Coupons updates are not sent automatically. The consumer needs to launch the application to check for new coupons added frequently. Those expired are deleted, and new discounts are delivered wirelessly. "If the coupon is unsolicited the deal is dead in the water," said Jeff Belcher, eMarketer senior analyst. "If you find the coupon has value or you don't have to retrieve it because it sits on your phone, well that's completely different." Dusing said Cellfire won't share information with retailers. "This program is completely opt-in for the consumer," Dusing said. "You pull up the coupons and offers when you need them. No one is spamming you." On Tuesday, Cellfire said it launched the service to Cingular Wireless customers in California, where it has been running tests. Consumers can go to www.cellfire.com, text to 22888 from their phones, go to HelloMoto, search "Coupons" from Cingular MEdiaNet. |
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