Will digital coupons have consumers doing cartwheels for Target’s app?
They say that the first step in dealing with a problem is admitting to having one. Today, I must admit that I have a Target Cartwheel problem. You see, I can’t walk into my local store without checking my app to see if I can get save an extra five percent or more on Simply Balanced organic milk or brand items I’ve been sent to pick up. The few times I’ve gone to the store and not saved money using Cartwheel has left me feeling … unfulfilled.
The discounts applied at checkout are great. But my one gripe with Target has been that to find manufacturer coupon offers, I need to go to the chain’s site and print them out for redemption in-store. How much easier would it be if manufacturer coupons were available in digital form on my Cartwheel app? I guess I’m going to find out soon. The retailer announced that it will test a function allowing “guests” (that’s customers, in Target speak) to clip and redeem digital coupons using Cartwheel.
According to Statista, nearly 127 million people will use digital coupons in 2016. That’s a little over six million more than in 2015. Target claims that Cartwheel users have saved more than $475 million since launching in 2013.
Discussion Questions
DISCUSSION QUESTIONS:
What do you see as the most important elements in driving consumer acceptance of the Target Cartwheel app? Will the addition of manufacturer digital coupons increase the number of Cartwheel users?
Poll
BrainTrust
Bob Phibbs
President/CEO, The Retail Doctor
Mark Heckman
Principal, Mark Heckman Consulting
Good for Target. Adding digital coupons to its app makes life easier for customers by saving time. Now Target needs to tell the world about this development so more shoppers will download the app and regularly use it. Then Target must make certain that the advertised items are in stock (a persistent problem for the retailer).
Let’s be totally honest here. The reason consumers had to “clip to save” was because the CPG companies were hoping a significant percentage would forget them or lose them or use them past expiration dates thereby limiting redemptions yet giving the appearance of giving savings.
Such thinking extends to gift certificates and gift cards — lack of redemptions brought money to the stores.
As discounts become automatically captured via an app, the why behind giving the discount becomes worthless. In George’s case, he would have already purchased the items, just not gotten the discounts.
Coupons were typically used to affect trial or adoption. They weren’t an automatic gimme which primes customers to feel bruised when the expected cents off aren’t given.
I think anyone looking to discount for trial or adoption needs to think thoughtfully about what behavior they are trying to accomplish or else they’ll simply be playing Santa Claus to customers already loyal to the brand.
Digital versions of the manufacturers’ coupons have gradually increased over the past five years, but still represent less than 4 percent of all coupons redeemed. To that point, I am not confident that adding this function will move the needle significantly in app adoption, although adding more functionality to an app is always a plus.
In my view, to significantly move the needle, Target would need to proactively work with CPGs to gain access to digital coupons in very high household penetration categories and add some of their own items to the digital offers, and then target them to shoppers on the basis of either their stated preferences or their past shopping history. Content and relevance are key drivers in any coupon redemption success, but that is particularly true with app users who are growing accustomed to a personalized app and companion website at their favorite retailers.
Target has an opportunity here to be a leader on the digital coupon scene, but just adding the existing collection of coupons on high-margin, infrequently-purchased items (as is the practice with the normal bank of manufacturers’ coupons) is likely to be a yawner.
I am unclear on the concept. On the drawing board, did Target hope to use this app to delight and surprise existing customers with serendipitous loyalty discounts on items they often buy? Or use it to attract, uh, guests, with a “this could be your lucky day” (or not) approach? These two goals do seem kind of mutually exclusive, and a lot to ask of an app that clearly requires some work for customers to navigate.
My question is, why is Cartwheel a separate app from the Target app? I understand there is a segment of clip-to-save audience, but why make me go through one app for e-commerce and in-store promotion and another app for couponing? Shouldn’t it be integrated?
I agree with you George. I struggle with the duplicity or redundancy of the Target and the Cartwheel apps. Throw on top of that REDcard, and the Target experience is unique in its range of promotion. Only Macy’s coupon a-go-go or Kohl’s high/low is as confusing or tumultuous.
Sounds like the test in Raleigh is an attempt to simplify, but I’m not sure if its more digital wallet aka credit card based Loyalty program. And we know how that is working out for Starbucks.
I don’t think Silverstein’s insightful book “Treasure Hunt” was all about the hunt for coupons. Seems to me they only add friction to the shopping experience regardless of paper vs digital. Once I cross the threshold, and TGT identifies me, why not push a list of all the deals which I can highlight and cash in at POS? (Similarly, Costco needs to sort out the logic of its coupon booklet.)
I love TGT’s food innovations and wonder why the transparency it is exploring in that category can’t be applied to its use of off-price promotion and make the savings more transparent and eliminate the gamification.
Ah yes, “retail ain’t for sissies!”
Digital coupons are not a replacement for printed versions, they are a complement to them. Although industry conversations still tend to focus on “this vs. that,” retailers now know that they must provide options (delivery AND pick-up, print AND digital, etc.) since shoppers define convenience in different ways. Target simply can’t afford to limit or force specific solutions on shoppers when other retailers aren’t.
Okay, wait. Really? Do we think that customers will do this? Do we think in particular that Millennials will print out coupons and bring them to the store? Do we think that they will buy newspapers and cut out department store coupons? (You know who you are.)
Adding friction to a sale is never a good idea. Companies that figure this out are going to be miles ahead.
Mobile couponing is one of the most often requested features by shoppers using our mobile checkout system at FutureProof Retail. Responding to your comment Bob, about digital coupons not serving the adoption goal of paper ones — the real promise of digital couponing is directing coupons to reach specific people based on shopping history. That way apps like ours (and certainly Target’s) can ensure that a coupon is driving a new sale, and not simply discounting an exiting one. The ROI on coupons goes up, the audience increases, and the retailer has one more tool to move shoppers onto their app platforms.