In a mobile version of a back-to-school campaign for Kohl's (NYSE:KSS), the chain is pushing a partner program with Staples (NASDAQ:SPLS) where purchases at one chain deliver discounts at the other. But the program is rather lopsided, with a Kohl's purchase delivering a 10 percent discount for a Staples buy, whereas a Staples buy delivers a 33.33 percent discount over at Kohl's.
Specifically, Kohl's is SMS-blasting shoppers that if they spend $30 or more at Kohl's, they can get $5 off a $50 Staples purchase. Interesting, but not especially compelling. But if a shopper spends that same $30 at Staples, he gets a much more powerful $10 off a $30 purchase at Kohl's, according to a report in Mobile Commerce Daily.
The incentive juxtaposition is interesting because it seems to not be based on shopper perceptions. For example, if I'm a regular business shopper at Staples, this promotion—especially with a 33.33 percent carrot—might easily get me to go to Kohl's if I have to purchase a lot of BTS clothes for my kids anyway. Kohl's has a reputation of good prices, so that carrot might just do it.
But if I'm a regular Kohl's shopper, Staples is a less typical place to go for school supplies such as notebooks, pencils, backpacks, calculators and rulers. They certainly have those items, but if I'm budget-focused—the only segment that would care about a 10 percent discount—there are cheaper places (Walmart, Target) to go.
On that basis, the chains would want to place the greater incentive where it's most needed, given the chains' respective reputations. That would argue the need for a greater discount to get a Kohl's shopper to go to Staples and yet this program delivers the reverse.
It's also not clear if either chain is really leveraging the mobile potential here. A generic 10 percent off (requiring a $50 purchase no less) is not that compelling, but what if the incentives were much more granular, based on existing and historical purchases of that shopper? What if the Kohl's purchases are in mid-August and it's a lot of clothes for a school-age child and the colors all run in the same theme? And what if the mobile app popped up with a customized short-duration (within 3 days perhaps) discount off of a series of backpacks with a complimentary design or color scheme? That connection could hit psychological strings that could trump an otherwise less-than-compelling discount.
- See this Mobile Commerce Daily story
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