Dial a coupon-Mall allows shoppers to get deals by using cellphones

Hoping to pioneer a new approach to consumer marketing, the CambridgeSide Galleria mall this week is launching a service that enables shoppers to use their cellphones to get instant coupons for Galleria stores.

By Peter J. Howe, Boston Globe Staff

The service, being launched with Cingular Wireless and a Boston wireless software start-up called m-Qube, uses ”short messaging” technology that US wireless carriers are hoping will boom here as it has in Europe, where on many days more than 1 billion SMS messages are zapped from phone to phone. By dialing an 800 number and choosing from menu options, shoppers carrying an SMS-capable phone can within seconds get a message back with a code they use to get a coupon from the Galleria’s concierge desk.

”I think it’s great,” Galleria visitor Yasmin Al-Shibib, a 24-year-old technology company worker from Boston, said yesterday after some Galleria marketing executives invited her to try the service.

Seconds after dialing the 800-680-3130 number, Al-Shibib’s Nextel phone buzzed with the coupon information – the first text message she had ever received on it. The message entitled her to three coupons for 10 percent off a purchase at the mall’s Cambridge Soundworks or Sears store or $10 off at the Thunder sportswear store.

”It was really easy, almost instantaneous,” Al-Shibib said. ”I think if they get enough merchants to jump on the bandwagon, people will be receptive to it.”

For mall and store managers, one of the most appealing aspects of the ”instant mobile savings” pitch is that because they know recipients’ phone numbers, they can develop valuable demographic information about who is shopping where and what they like to buy. By tying specific marketing campaigns to specific coupon-dispensing 800 numbers, retailers could in the future get a much better picture of which media outlets are bringing in which kinds of consumers.

Despite some well-publicized flops of services allowing cellphone subscribers to use their phones to buy books, CDs, and even shares of stock, cellphone companies straining under huge debt loads and ruinous price wars remain eager to promote ”mobile marketing” and ”mobile advertising” as desperately needed new sources of income.

While Cingular is sponsoring the Galleria program, subscribers of all six wireless carriers in Greater Boston can use it if they have SMS-capable phones.

Short messaging has only begun to grow in the United States in the last year as carriers have agreed to enable subscribers to easily send messages to any cellphone user, not just those with the same service provider. But short messaging is already raising hackles among cellphone owners who have discovered it can be one more way to get unwanted ”spam” e-mail – which can wind up costing them 10 cents per message.

Executives of m-Qube, the year-old, 23-person software start-up behind the service, said they are determined to prevent Galleria shoppers using the service from exposing themselves to a flood of highly targeted marketing pitches they have to pay for.

”What we in our DNA believe and act upon is that the only way to build wireless as a long-term approach to marketing is to be very strong advocates of consumer privacy and consumer rights,” said m-Qube chief executive Jeffrey Glass, a founder of e-mail marketing firm Transactive Solutions, which later became a partly owned subsidiary of AOL Time Warner.

Glass said m-Qube envisions unsolicited ads being sent to wireless subscribers as ”the exception, not the rule,” with the business focusing mainly on cellphone owners requesting coupons, enabling them to ”opt out” quickly and easily from getting future pitches, and not sharing customer information with other marketers.

The CambridgeSide Galleria is the first of several US shopping malls where m-Qube hopes to launch trials of the service this autumn. It is also working with radio conglomerate Clear Channel Communications to develop radio ads that would have a toll-free number listeners could call to get a coupon on their cellphone, helping advertisers better track which radio campaigns are bringing in customers and who they are.

M-Qube closed a $6.9 million round of venture capital funding this week from Bain Capital Ventures and General Catalyst Partners.

Travis Larson, a spokesman for the Cellular Telecommunications & Internet Association, a Washington trade group, said marketing efforts based on short messaging ”are really starting to take off in Europe,” but said he was not immediately aware of any similar efforts in the United States. A handful of financial services and other companies that offer information-alert services for customers are starting to add wireless short messaging.

Michael Troiano, senior vice president of business development for m-Qube, acknowledged that many aspects of the ”instant mobile savings” are a work in progress. That includes the question of how much to charge retailers per message sent – currently it is ”less than a [37 cent] stamp,” and potentially just pennies if shoppers flock to the service.

Galleria and m-Qube executives hope in time to be able to have shoppers go straight to participating stores with a coded coupon instead of having to get a paper version at the second-floor concierge desk, and ultimately, as more phones with high-resolution screens are in service, receive a bar code on their phone that a store clerk could scan like a UPC code.

Phil Redman, a wireless industry analyst with Gartner Inc., said he thinks ”it is going to be a challenge to change the way that people shop. It’s going to have to be a significant discount to get people interested in dealing with the aggravation” of calling the 800 number, waiting for the message to come back, and finding their way to the second-floor desk to get the coupon before going to the store they want to visit.

But Issie Shait, general manager of the Galleria, which has 112 stores and gets 15 million visitors each year, said: ”We thought right away it was a great match for us. We’re always looking for cutting-edge technology, something new to do. The whole idea intrigued us of being able to do direct targeting” of interested shoppers ”rather than a shotgun approach to everyone who walks in. You’re targeting a customer who wants what they’re getting.”

Peter J. Howe can be reached at [email protected].

This story ran on page C1 of the Boston Globe on 9/19/2002.
© Copyright 2002 Globe Newspaper Company.

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