Discount coupons were invented more than a century ago by Coca-Cola. Since then, companies have widely used coupons for marketing needs, such as sales promotions, sales acceleration, price sensitivity research, and revenue maximization.
With the advancement of technology and the growth of online shopping, digital coupons distributed throughout social media, mobile apps, and specialized websites are becoming significant aspects of marketing strategies.
Coupon creation, distribution, and redemption are complex and often costly. In addition, it typically involves multiple parties and steps.
Besides traditional coupon distribution services and platforms that automate almost every aspect of coupon campaign management, deals or coupon sites that allow customers to search for deals based on various criteria are becoming increasingly popular among online shoppers.
The digital coupon market is growing worldwide, boosted by online shopping and the transition from paper to digital coupons. According to Inmar’s Promotion Industry Analysis, in 2020, the digital coupons market rose by 27% and surpassed paper coupon redemption for the first time ever.
According to Statista, approximately 25% of consumers search for coupons before shopping. Additionally, most consumers turn to coupon websites and follow brands’ websites or social media to find discounts and deals.
Besides typical difficulties, such as the transition from paper to digital coupons, digital fraud is the main factor limiting digital coupon adoption.
Currently, companies aim to solve this problem by using technological advancements and secure coupon redemption procedures provided by third-party services.
When the problem domain involves three or more independent parties and complex multi-step business rules, distributed ledger technology and smart contracts offer certain advantages.
While blockchain’s inherent immutability and transparency elevate trust, the blockchain network establishes an ecosystem where teams collaborate to foster a new design paradigm.
This document attempts to demonstrate blockchain and smart contracts’ potential in digital coupon distribution, redemption, and related domains.