Digital coupons can drive significantly more sales and loyalty than print-at-home or other paper coupons, underscoring the need for retailers and CPG companies to invest in this fast-growing promotional vehicle. The reasons seem fairly logical. They are more convenient for shoppers to use. They are easy to access with mobile phones and in-store devices. And they enhance and extend in-store merchandising and shopper marketing events.
According to recent research, digital coupons have a much greater impact on spending than print-at-home or paper coupons. In particular, shoppers confirmed spending far more than planned with mobile and load to card coupons than they do with print-at-home coupons (49% said they spend more than they planned with mobile coupons, 36% spend more with load to card coupons, and only 25% spend more with print-at-home coupons, about the same as store emails). These findings are consistent with our own analysis and third-party research results: digital coupons drive increased trips, trial, and sales when compared with other coupons.
Online coupons, including both print-at-home and digital coupons, continued their strong growth in 2010. The number of online offers available increased by 37%, the largest across all types of coupon media. The data masks an important fact – while digital coupons are still small as a percent of the total, they are growing faster than any other coupon type. This trend will only continue as more retailers follow the lead of Kroger, Safeway, and Target, all of which are aggressively expanding their digital coupon programs because of the impact they are starting to see.
Print-at-home and digital coupons are sometimes lumped together into a single bucket. Although they are available online, print-at-home coupons are not digital in any meaningful sense of the word since a shopper still has to print them out, remember to bring them into the store, and scan them at checkout just like any other paper coupon cut out from a FSI. Digital coupons (as provided by YOU Technology) are fully paperless and integrate with a retailer’s point of sale system to let shoppers not only find offers online and via mobile phones and in-store devices, but also redeem them automatically at checkout, without ever having to print or clip.
In addition to driving more sales, digital coupons offer significant benefits over print at home and other paper coupons by:
- Driving shoppers into the store. Because they are redeemed in the store, digital coupons let retailers and CPGs drive shoppers into the store to try new brands, stock up on existing brands, and cross-shop new categories. Print at home coupons can be used at any retailer, even if they are printed from the retailer’s own website.
- Providing more convenient, relevant and real-time communications. Digital coupons are more convenient for shoppers to find and use than paper coupons. In addition, digital coupons allow retailers and brands to tap into fast growing media channels such as mobile (including both apps and text messaging) and in-store digital signage where it would be difficult if not impossible to incorporate a print at home or paper coupon.
- Enhancing collaboration. Digital coupons provide an ideal platform for collaborative marketing because of their ability to tightly integrate with a retailer’s existing loyalty program(s) and merchandising initiatives. For example, Kroger and key CPG partners such as P&G, General Mills, Pepsi, and Nestle, recently ran a Cart Buster digital and in-store event. In addition to strong in-store pricing, shoppers could find and download additional coupon savings right to their Kroger card. Kroger also featured a digital deal of the day on Facebook that let the first 1,000 shoppers who responded download a coupon for a free product featured in the promotion, such as Charmin, Coffee-mate, Chex Snack Mix, and Pepsi Max. Kroger and its CPG partners leveraged a wide range of media to promote the program, including social media, blogs, emails, display advertising, Kroger’s circular, and in-store marketing.
As the market continues to grow, retailers and brands need to launch their own digital coupons programs to take advantage of the opportunity and avoid getting left behind by more innovative competitors.