Bill Hanifin

Kroger's One-Stop Digital Coupon Center

July 27, 2010

FROM RETAILWIRE:
Kroger last week launched an online digital coupon center that enables customers to load coupons onto their loyalty-card accounts. The discount is then automatically deducted at checkout without a paper coupon. How would you rate Kroger's digital coupon website?      [more...]

My comments are incremental to those of Messrs. Sprecher and Rubin.

On the surface, the facilitation of coupon gathering is brilliant and I presume that there should be a benefit to loyalty card members for going to the trouble to visit the coupon site and download coupons. It was not mentioned in the post, so I think it must not be part of the introduction, but a later development.

Concerning incremental customer visits and sales, the macro play here is that customers may shift from a competitor to Kroger to take advantage of the new service. That is the bigger opportunity for Kroger as I see it--introduce a service which causes consumers to break the mental "tie" and choose to shop at one of their stores.

There is less surety that existing customers will buy more or visit more often. More than likely, those consumers who are coupon addicts will now just gather more and save more on the same basket purchased.

Using the data from the loyalty card to push coupons selectively to members and then facilitating loading of just those coupons on their cards would be a better path to increasing sales among existing customers.