The rise of the digital coupon

Across commerce, the presence of the smartphone has changed consumer behaviour beyond recognition. This shift is most evident in what might be terms mobile commerce, or m-commerce. Research in the International Journal of Business Information Systems has looked at India, with its rapidly growing smartphone user base, and suggests that the nation is poised to become a major part of the global m-commerce market by 2025.

K.A. Asraar Ahmed of the VIT-AP University in Andhra Pradesh, India, V.S. Damodharan of the Al Jazirah Institute of Science and Technology in Abu Dhabi, UAE, and S. Kumaraperumal of the Rajalakshmi School of Business in Tamil Nadu, India, have looked at the various factors influencing the adoption of mobile coupon applications (apps) among Indian consumers. The team used extended Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) model as well as Structural Equation Modelling to analyse the way in which consumers use mobile coupons when shopping online via their smartphones.

Mobile coupons, or vouchers, offer discounts on purchases and are used directly in one’s smartphone at the time of sale. As with web coupons and before them, paper shopping coupons, have become a powerful marketing tool for sellers around the world. Their appeal is evident for consumers, they get an apparent discount on their purchases, but for the sellers, they get the kudos of having offered such a discount, which might lead to subsequent sales. The team points out that in India, smartphone penetration is expected to surpass 1 billion by 2025. As such, the potential for widespread adoption of mobile coupons is enormous.

The researchers found several key drivers that affected whether consumers used mobile coupon apps in India. These included the perceived value of the discount offered, trust in the security of the online transaction using the coupon, the influence of social networks, concerns regarding privacy and data security, expectations regarding app performance, willingness to embrace innovation, hedonic motivation, and a person’s own confidence in using mobile technology effectively. Fundamentally, however, it was price value that was most important, followed closely by trust and external social influence.

The work thus has implications for marketers and policymakers. For marketers, a better understanding of the various factors influence mobile coupon use can help guide their marketing strategy. For policymakers, understanding the way in which the market is being influenced and the impact on buyers and sellers is important for ensuring safety and security on both sides and allowing for appropriate regulations surrounding this area of commerce.

Ahmed, K.A.A., Damodharan, V.S. and Kumaraperumal, S. (2024) ‘Factors affecting mobile coupon acceptance through smartphone app’, Int. J. Business Information Systems, Vol. 46, No. 1, pp.140–164.