Kmart is relying on its SMS database to push out mobile coupons and offers to not only drive sales, but also to encourage application downloads that build a stronger one-on-one relationship with shoppers.

Last week, Kmart sent out an SMS message that encouraged its opted-in users to click a link in exchange for receiving $5 off of a $50 or more purchase. Additionally, the retailer is tying the coupons to a time-sensitive component through Apple’s Passbook app.

“SMS is one part of our larger, industry-leading integrated marketing approach, which also includes search, display, social and other channels,” said Andy Chu, divisional vice president and general manager at Sears Holdings Corporation, Hoffman Estates, IL.

“SMS offers an easy, intuitive way for Shop Your Way members and customers to discover and use coupons while they are in-store,” he said.

“Like our popular Shop Your Way and Sears mobile apps, Passbook is another way Shop Your Way members and customers can save and redeem coupons conveniently in-store without worrying about paper coupons.”

Mobile engagement
The Kmart SMS message that was sent to users last week included a link that drives users to a landing page with a half dozen different offers and coupons on it.

Consumers can then scroll through the list and view the details on each mobile offer.

For example, one offer encourages consumers to save 20 percent on their next purchase from the apparel department while another coupon is linked to $3 off on grocery and household purchases of more than $30.

The offers can be shared via Facebook, Twitter and email, and users can also customize the offers by rating them.

Additionally, instructions below the offer walk employees through the redemption process.

Moreover, the coupons can be saved to Apple’s Passbook app for iOS users. By clicking a button, the coupon is automatically added as a pass to the Passbook app.

The coupons are time-sensitive and can be redeemed by a store associate at the point-of-sale.

Consumers can also flip over the Passbook Pass to view additional information about the offer or can download Kmart’s iPhone app.

For consumers without an iPhone or Passbook, the coupons can still be opened via the mobile browser and saved.

Building loyalty
Kmart has been in the mobile space for quite some time.

Most recently, the company made a last-minute attempt to drive holiday sales over the holidays via its Shop Your Way rewards program (see story).

Additionally, the retailer rolled out mobile point-of-sale devices for store employees over the holidays to cut down on in-store traffic (see story).

Retailers have steadily been adopting Passbook to tie into their mobile initiatives, but what is unique about Kmart’s use is that it does not require consumers to download an app.

Additionally, Kmart is likely also reaching a wider group of users via SMS, which the retailer can use to trigger app downloads and build a longer-lasting relationship with its users.

However, some experts say that Passbook’s adoption has not taken off yet and is also limited to a specific group of users.

Luckily, Kmart is also using mobile Web, social media and email as additional ways to distribute the offers.

“Using Passbook to send coupons via SMS is not the best way to engage all of Kmart’s customers,” said Cezar Kolodziej, CEO/president of Iris Mobile, Chicago.

Mr. Kolodziej is not affiliated with Kmart. He commented based on his expertise on the subject.

“Passbook market adoption has been disappointing and limited mostly to iPhone users,” he said. “Android users need to download the app before they can use it – that really hinders the convenience offered by mobile in general.

Moreover, Kmart customers still own a lot of feature phones. Sending text messages with links to download Passbook Passes to consumers who cannot use them is alienating consumers. Kmart should focus on sending coupons that will work on all devices and not just some to ensure the best results from their campaign.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York