Mens Wearhouses K&G Fashion Superstore sees 93pc mobile coupon redemption rate
By Chantal Tode
May 26, 2011
SMS coupons had a 93 percent redemption rate
Men's Wearhouse chain K&G Fashion Superstore saw a 93 percent rate from a recent SMS couponing program that helped the retailer build an opt-in database of mobile customers more than 80,000-strong.
Atlanta-based K&G, working with CRM agency Merkle, launched a SMS program across its 101 stores in February hoping to build a database of mobile customers. The program focuses on driving in-store traffic and sales via SMS coupons that can be redeemed at the point of sale, with participants receiving four messages monthly on events, alerts, coupons and other activities.
I dont want to create a mobile feed for coupons, said Matt Stringer, senior vice president of marketing at Mens Wearhouse. I want to build a database and a value proposition for couponing.
This was one of the takeaways from How Mobile Coupons Drive Revenue and Build a Mobile Database for Mens Wearhouses K&G Fashion Superstore, a Mobile Marketer webinar yesterday that was sponsored by the Mobile Marketing Association.
Mobile seemed like a good place for the retailer to be as its research showed that K&Gs core customer, African-American men ages 25-54, are big mobile phone users.
The retailer decided to initially launch the mobile program as a standalone effort so that it could get to market quickly.
The backend integration with its CRM database is being addressed now that program is up and running.
We made the decision to get it up sooner rather than later because we thought we had a win on our hands and didnt want to wait, Mr. Stringer said.
SMS was chosen because of its reach and the fact that it would be the easiest delivery mechanism. K&G recently updated its point-of-sale to a mobile-friendly system.
Initially, the program focused on using in-store signage to encourage customers to text a keyword to a short code to receive a $5 off coupon, which they could redeem at point of sale that day.
The customer receives a coupon with a unique code that has to be keyed into the POS system. Because the code is unique to that customer, it eliminates the possibility that someone can redeem multiple coupons.
This is a double opt-in program that sends customers a message to verify that they want to participate in the program. Once opted in, customers receive four messages a month from K&G.
The redemption rate for the program between February and May was 93 percent.
There are currently more than 80,000 customers signed up, with approximately 6,000 new customers being added weekly.
A similar program launched in March to drive incremental traffic to several store grand openings used print, radio and local advertising to encourage consumers to text a keyword to a short code and receive a discount. That had a 49 percent redemption rate.
We dont have any other program that runs at a 93 percent or even a 50 percent redemption rate, Mr. Stringer said.
K&G also offers coupons via print, direct mail and email.
For the initial in-store effort, the average ticket price was around $70, which is the same for customers not participating in the program.
The average ticket is on par, which means mobile shoppers are taking an incremental $5 to the checkout, Mr. Stringer said.
With the program a success, K&G is now focusing on testing different offers and messages to see how mobile shoppers respond.
For example, the retailer did an A/B split test, sending one group a teaser that an offer was coming and a second group simply the offer. The first group had a slightly higher response rate.
K&G is also working on integrating the mobile database with its CRM database.
We are looking to integrate, so if a new customer comes in and wants to join the rewards program, they can have mobile as an option, Mr. Stringer said.
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