One of the oldest traditions in the world of retail sales has spread to the digital world of mobile devices: coupons! Offering discounts in digital format isn’t a new concept, and it still remains to be seen how successful mobile coupons will be now that our phones have all gotten a lot smarter, but there might be some winning formulas out there in the world of mobile apps.

While there are a handful of apps already delivering mobile coupons such as Yowza, Coupon Sherpa, and Cellfire Mobile Coupons, two challenges facing digital discounting are readily apparent: getting retailers to pump their coupons into the app, and making the collection of available coupons localized enough to be useful to the consumer.

All three of the previously mentioned companies, for example, are only available to residents of the US – Yowza and Cellfire Mobile Coupons aren’t even available to download outside of the US, while Coupon Sherpa currently only lists US-based businesses. Sure, the US is a big market, but the bigger point is that location matters, and localization will really matter when it comes to digital coupons.

Mobile coupons are all about localization

You would never use a digital coupon from your mobile device to make online purchases – if you’re buying something online, you would get direct access to the discount right there in the online checkout. The only time you will ever use a mobile coupon will be when you walk into an actual store, phone-in-hand. It stands to reason, then, that a mobile coupon app will only be useful if businesses are able to offer their coupons regardless of where they are located.

Where things could get really interesting is with how mobile coupons will play into other mobile marketing-related applications such as foursquare where geo-location offers the ability for retailers of all sizes to offer promotions at a very localized level. Granted, foursquare itself is only available in select cities at the moment. But the broader underpinnings of how small businesses have been able to offer their own promotions via the mobile game (as we’ve covered earlier) essentially capture one of the easier ways to offer deals to your customers through mobile devices – use mobile as a communication tool to offer your promotions, that’s it, easy peasy.

Another area where app developers might get more bang for their buck would be in providing a complete platform that bridges the full spectrum of the retail promotion process: provide customers the means to easily to opt-in promotions from a retailer (in exchange for providing their contact information), and give retailers a means to make their offers and even accept payments – a model similar to how Starbucks is reportedly testing some apps including one that allows you to load up your Starbucks Card and even make payments all with your iPhone. Not all retail outfits can afford to build their own iPhone app the way Starbucks is, but this is the opportunity for a new suite of apps to emerge or maybe one app to rule them all.

Given there are now reportedly 2 billion iPhone app downloads along with 85,000 iPhone apps to choose from, maybe this is out there already. Have you seen it? What do you think?