Is This Really the Future of Coupons?

By offering affordable prices and speedy shipping, Amazon.com has forever changed the retail environment. As a result, big-box retailers, such as Target (NYSE: TGT  ) and Best Buy must find new ways to attract consumers to their stores. For the world's largest electronics retailer, this means matching prices offered on Amazon.com and rolling out store-within-a-store displays for brands like Apple and Samsung. Target has implemented similar strategies in its stores.

Despite these efforts, attracting more foot traffic to their stores remains a challenge for retailers. Perhaps revolutionizing the coupon will do the trick.

Modernizing the coupon
Who doesn't like a good deal? Target, known for its trendy products and discount prices, is currently testing a digital coupon service that centers on social media. The discount retailer, together with Facebook (NASDAQ: FB  ) , launched Target Cartwheel last week. With this new service, shoppers can unlock special coupons on hundreds of products, which they can then redeem in any Target store.

Some analysts were quick to point out that Target Cartwheel could be less complicated to use. However, I think the Target-Facebook partnership could be an early-stage disruptor to traditional couponing. By linking up with Facebook, Target gained access to more than a billion global users -- seemingly overnight.

Once a Facebook user opts in, Cartwheel can push targeted deals to that Facebooker's news feeds. Adding a viral twist to the service, Cartwheel users can unlock better deals by sharing their Cartwheel experiences with their friends on Facebook. If Target sees even a slight increase to its in-store traffic because of this social initiative, you can be sure other retailers will quickly follow suit.

The Facebook shopping experience
As someone who manages to always forget my clipped coupons at home, I find Target Cartwheel appealing because I can use my smartphone to redeem the coupons. In fact, the discount retailer is expected to release a Cartwheel mobile app for iOS and Android devices in the next couple of months.

Of course, this partnership could also pay off for Facebook if it catches on with consumers -- particularly as the social network attempts to find its place in mobile. While we'll have to wait and see how the new service resonates with users, it's encouraging to see Facebook collaborating with retailers in fresh and inventive ways.

If you like Facebook...
After the world's most-hyped IPO turned out to be a dud, many investors don't even want to think about shares of Facebook. But there are things every investor needs to know about this revolutionary company. The Motley Fool's premium research report shows that there's a lot more to Facebook than meets the eye. Read up on whether there is anything to "like" about it today to determine if Facebook deserves a place in your portfolio. Access your report by clicking here.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2430242, ~/Articles/ArticleHandler.aspx, 4/18/2014 8:47:23 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement