Ben Sprecher

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...]

Kroger is moving in the right direction by making it easier for its shoppers to find and redeem coupons, but there are plenty of opportunities for improvement.

For one, the coupons that are presented seem to be untargeted, "mass-selected" coupons. This has several drawbacks. First, it means that manufacturers may not be as willing to offer high face values (for example, "Buy 2 Save $1 on Any Size Kellogg's Raisin Bran Crunch" is running right now), since many redeemers would have bought anyway, and a high face value would simply undercut the brand's margins. Second, since offers do not reflect each user's demonstrated purchase preferences, there's more chaff for each shopper to wade through. Combined, these factors can significantly reduce the value to non-hardcore-deal-seekers.

For another, the fact that shoppers need to go to a website in the first place means that some of the most valuable shoppers--the ones who are less price-sensitive in the first place--will never see the coupons and will therefore not be influenced by them. Ironically, even in today's economic climate, the shoppers to whom brands most want to show their offers are often the ones least willing to spend energy looking for them.

So, Kroger's one-stop coupon site gets a B- from me. It's well ahead of many other retailers' efforts (especially in how they consolidate offers from multiple content providers), and the load-to-card capability adds value today and lays the groundwork for future improvements. With the addition of behavioral targeting capabilities (like dunnhumby already does for Kroger with direct mail) and alternative channels for reaching shoppers (which I presume SoftCoin, whose technology runs the site, will be adding soon), then Kroger could earn an A.