The New York Times “Bits” blog carried an item a few weeks ago about electronic coupons, sent to your mobile device at appropriate times:

How many times have you heard the prediction that one day, businesses like coffee shops will send us coupons on our mobile phones when we walk by?

That has long been the dream of mobile marketers. Still, only 9 percent of people have received a coupon or discount code on their phones based on where they were standing, according to new data from Compete, a Web analytics firm.

This could be the year that changes. People are increasingly interested in receiving coupons on their phones, especially at the grocery store, Compete found. On Wednesday, Target announced that it would start sending mobile coupons.

When I worked at IBM Research, several of my co-workers did a project involving a retail establishment and customers’ mobile devices. They dealt with electronic coupons, as well as other uses of the mobile technology, and they wrote a paper about the project. The abstract:

Toward a Mobile Digital Wallet

Mobile phones have now made their way into a large fraction of pockets and handbags worldwide. An intriguing question is whether such phones will eventually replace the physical wallets we carry. We believe the answer is in the affirmative, though plenty of challenges abound in overcoming entrenched personal and business practices and processes. In this paper, we explore the changes that need to ripple through the ecosystem to build a vibrant set of digital wallet services that potentially interact with each other to provide users both with increased convenience and a level of functionality hitherto unrealized. We describe our initial mobile wallet prototypes on web-enabled smart phones, designed to explore some of the challenges in creating the architecture and infrastructure necessary to make this vision a reality. Feedback from users and experts across a range of industries such as retail, banking, telecommunications, and healthcare indicate that we have just scratched the surface and a substantial wave of innovation is necessary to make the digital wallet a full-fledged reality.

Would consumers want to receive coupons and other offers on their phones, or would the interruptions just annoy them, seeming to be spam? My colleagues found that customers in the pilot program liked getting the coupons, and used them. In their paper, they note these results:

  1. The frequency of in-store visits was greater than the visit rate of the baseline loyalty program.
  2. The electronic coupon redemption rate was several times higher than traditional paper coupon redemption rates.

Indeed, going back to the Bits blog in the Times:

Thirty-six percent of consumers said they would like to receive mobile grocery coupons, 29 percent said they want cellphone apps that scan product barcodes for an offer or discount, and 26 percent want coupons from movie theaters.

Are electronic coupons the wave of the future? What about the general concept of an electronic wallet? If we could solve the privacy and security problems (or arrange things so they don’t matter), would people like using their mobile devices at points of sale, in lieu of money or credit/debit cards?

I think I would.