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30% of Those Who Save Pep Boys Coupons to Passbook Use Them

High redemption rate makes brand bullish about Apple Pay

With Apple’s launch of Apple Pay this week—technology that will let consumers swipe their phones to make purchases at chains like Starbucks and Walgreens—Ron Stoupa, chief marketing officer of Pep Boys, sees a bigger opportunity for his brand to boost coupon redemptions in Apple’s Passbook mobile wallet.

Passbook got off to a rocky start with brands, but the growth in mobile wallet offerings from Google and PayPal in the past few years makes Stoupa confident that Apple has the learnings needed to pull off mobile payments. "It looks like they took some learnings from Google Wallet [with Apple Pay,]" he said. "They have an extremely more loyal user base than anyone out there, so it will be interesting. I think it will get impressive trial more than Google Wallet did."

Stoupa’s excitement about Apple Pay is based on the results that his company has seen since starting a coupon program in May (with help from mobile marketing company Vibes) to mobilize its database of 36 million loyalty members across 805 locations.

The offers are sent out via the brand’s text messaging program. Pep Boys also pushes the offers through mobile calls-to-action on direct mail and email that is sent to a segment of users. The coupons can be saved to Passbook or the Google Wallet app, but Pep Boys has seen "significantly" more offers saved to Passbook.

"People are viewing offers on Passbook and 26 percent of them that viewed that offer added it to their mobile wallet," Stoupa said. Thirty percent of the consumers who add the coupons to Passbook are then redeeming them.

Pep Boys' Passbook offers also have a .8 percent removal rate, which tracks the number of consumers who add a coupon to the mobile wallet but then delete it. Per Vibes, the average removal rate for retailers is 3 percent, indicating that consumers who have downloaded a Pep Boys coupon hold on to the content long after the offer has been used.

To increase coupon redemptions, Pep Boys relaunched a mobile site at the end of August. The site houses all of Pep Boys’ offers, which has generated 50,000 page views so far. Ninety percent of people who go to Pep Boys’ site click to download a coupon.

Mobile makes up a little less than 50 percent of Pep Boys’ traffic but the company expects to get half of its online traffic via smartphones and tablets by the end of the year. "You’ll  start seeing us helping people manage their cars through mobile accounts [as well as] different things you’ll see coming in the future," Stoupa explained.

Mobile Clout
Mobile commerce was a big point in Apple's event this week with the launch of Apple Pay (a payment triggered by near-field communications—or NFC) and a new smartwatch.

The smartwatch in particular has generated a lot of buzz with marketers because it will integrate payments triggered by swiping a finger across the screen.

At the same time, retailers looking to roll out mobile wallets will still need to pour significant investments into equipping their checkout counters with the technology needed to accept payments.

That said, Apple certainly has the scale that retailers are looking for in mobile.

"The big windfall is that Apple has the clout to move markets," said Jack Philbin, co-founder and CEO of Vibes. "Nobody has cracked the code on mobile payments, and Tim Cook on stage [this week] in front of the world waving his phone, talking about Passbook and unveiling Apple Pay—that’s a momentous moment for mobile and for payments. It’s sort of the stimulus that the mobile wallet ecosystem has been waiting for."

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