Using GPS to Drive Promos

Until now, most consumers have used GPS to get driving directions, but Sears and Pier 1 Imports are experimenting with a new use for GPS: driving promotions.

Yowza, an application that’s available on both iPhone and iPod Touch devices, scouts out promotions and discount offers within a 15-mile radius. The free app joins a growing list of mobile coupon applications, including Coupon Sherpa, which lets consumers hunt for store deals before checking out.

Yowza is different, however, in that consumers aren’t limited to a particular manufacturer’s brand of products, nor are they required to download offers online before redeeming in store.

Mike Wehrs, president of the Mobile Marketing Association, said this is the first GPS-based couponing app he knows of, but thinks the idea could catch on. “Any time you insert a concept such as ‘location’ into a marketing program, you end up with a far more compelling value proposition,” he said.

 Sears will begin running offers on Yowza, including one promising 15 percent off Kenmore appliances this week. Michael Léger, online and emerging media merchandise manager for Sears, said that though the brand skews older, a push like this will reach younger consumers. “It’s a tough environment out there now,” he said, adding that Yowza is “just another avenue for us to talk about the savings we have out there.”

Adding to Yowza’s appeal is the fact that one of its co-founders, Greg Grunberg, is actually one of the stars of the NBC TV series Heroes. (He plays Matt Parkman, a police officer who can read people’s minds.) That, along with the popularity of Apple’s iPhone apps and the surge in digital coupon redemption, adds to Yowza’s appeal.

Pier 1 is giving the app a try by offering $10 off the first $30 purchase this week via Yowza. The retailer will be closely watching to see how consumers respond to the deal, said Jeff Haddox, digital marketing analyst for the chain.

Marketers who have used the application say it’s attractive because they can exert a level of control over their content. Dairy Queen, for instance, used Yowza to promote its limited edition line of Blizzard treats, but it’s also advertised various items on its “Sweet Deals” value menu. And the chain has tweaked messaging to drive store traffic during different dayparts. “It’s the brand marketing that keeps us top of mind,” said Jamie Guse, Web site manager for Dairy Queen America.

Yowza, though, has its downsides. Dairy Queen, for example, is discontinuing use of the application after a three-month trial period because compared to TV ads, it just wasn’t as “cost effective,” Guse said. Unlike a Pier 1 or Sears, the chain, which has 5,000 locations in the U.S., would have to sell a lot of food to make the application worthwhile. (Grunberg declined to get specific on pricing, but said it’s based on a “per location” basis.) Another drawback: The app has to be turned on to work—it’s not something that sits in the background and is activated by a random offer.

Nevertheless, the app has appeal for marketers looking to gauge the results of their promotions. For instance, one can see if a particular message prompted consumers to go out of their way. “If they view it and drive five miles to the store, that’s a powerful offer,” Grunberg said.