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What Type of Digital Coupons Do Grocery Shoppers Want?

August 5, 2013

Walmart is expanding its "Scan & Go" feature — which lets users scan items with their iPhones in-store and then pay at a self-checkout counter — to include access to digital coupons.

The news of the addition was reported last week by Mobile Commerce Daily, which confirmed what Walmart officials had first said would happen at a media event in late March. In May, Walmart said it planned to expand its "Scan & Go" test to more than 200 stores, up from about 70.

Differing from Stop & Shop's Scan It! App, Walmart's coupon feature works closer to traditional, clip-for-yourself coupons that shoppers select before they reach the store. The touted benefit is removing the chore of clipping coupons and forgetting them at home, according to Mobile Commerce Daily.

"The capabilities will allow customers to access manufacturer coupons in the Walmart iPhone app," Walmart spokesman Ravi Jariwala told Coupons in the News in late March. "They'll be able to simply tap on coupons to 'clip' them and add them to their virtual cart, and these coupons will be applied automatically to matching items in their next Scan & Go session at a store."

The coupons will be only available to Scan and Go users, presumably offering another incentive for shoppers to sign up for Scan and Go besides the promise of quick self-checkout, according to Coupons in the News.

By comparison, Stop & Shop's Scan It! App plays up personalized offers based on the shoppers purchasing history gleaned from loyalty cards. It also offers location-based offers, taking into account where the shopper is in the store, such as an ice cream deal popping up in the dairy aisle.

Safeway's Just For U App offers the option of loading up deals as well as personalized offers. Its explanation of the program reads, "Our systems use your purchase history to sort through and organize personal price offers, hundreds of coupons, and all of our weekly Card Specials. But only you can determine if our systems got it right. That's why we ask that you select offers by loading them to your Club Card. As you provide feedback based on what you select, our systems will improve their ability to sort through and personalize your offers. This will make the program even more valuable to you over time!"

Since Walmart doesn't have a loyalty program, its ability to offer personalized coupons appears limited, although the retailer is expected to learn more about their customers' preferences as each uses the Scan and Go feature.

FINANCIALS:     [NYSE:WMT] [ NYSE:SWY] [ ]

Discussion Questions:

Do you think shoppers will prefer their digital coupons coming pre-selected, personalized based on purchasing history, or location-based around store zones? Which are most and least attractive for shoppers as well as stores?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Which do you think grocery shoppers will most prefer from digital coupons?

Comments:

This is now the new way to prevent coupon fraud, as digital internet coupons are notorious for fraud, costing stores millions in losses. If the technology guarantees payment for the service to the stores, than you have a winner. Costco has started going clipless, and is using the phone app for the deals, and will probably have success with it.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

Shoppers will always prefer relevant offers based on their needs and wants, as indicated by prior behavior. This includes prior product purchases well as their demonstrated responsiveness to marketing/merchandising programs (such as a given discount "trumping" brand loyalty).

Relevancy is also a function of current behavior. The shopper's in-store proximity to a category, an item already in the basket and time of day are all examples of potential triggers of specific offers. The best retailer loyalty programs will combine these elements, optimizing relevancy by offering the highest predictably redeemed content further enhanced by current conditions.

Dave Carlson, CEO, Relevance Partners, LLC

I think shoppers would prefer that the best advertised or regular price on an item just be posted on the shelf without having to go through the hassle of coupons, whether or not those coupons were paper or electronic.

'beavertontim'

In case anyone doubts it, Scan & Go is absolutely a loyalty program and WM will assuredly use data collected to target consumers. The difference is one that retailers should have paid attention to long ago—loyalty programs shouldn't be based primarily on pricing differences, but customer differences. Everyone gets the same low price at WM, but S&G customers get customized offers and oh by the way, sometimes a targeted digital coupon as well. This is far more about delivering relevant and resonating offers to customers than it is discounts and that means more sales.

Andy Casey, Senior Partner, Loyalty Resources

Walmart had to do it. If for no other reason, to get the research on its shoppers. How far we've come since the days of no couponing, no discounting.

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Liz Crawford, VP, Strategy & Insights, Match Drive

When retailers begin to personalize their promotional programs based on what shoppers have purchased in their stores in the past, they are raising the bar versus the "blanket" programs that aim to be all things to all people. But the future will bring personalization to the next level.

The most successful promotional programs of tomorrow (by the way, these programs are possible today!) will be programs that look beyond the confines of one store location or banner. These programs are based on consumers' 360-degree shopping behavior across all channels and retailers, both brick-and-mortar and online and they allow marketers to fully understand the needs, wants and behaviors of their target shoppers. With this knowledge, marketers are able to offer relevant and powerful offers that truly have the power to expand share of shopper spending.

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Susan Viamari, Editor, Times & Trends, IRI

My vote would be ACTUALLY personalized to their purchasing history, (as opposed to rewarding for switching) and perhaps tied to instore promotions.

Least attractive? Digital spam!

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Ryan Mathews, Founder, ceo, Black Monk Consulting

"Shoppers" will not flock to any one type of program. The question is not what program is best for shoppers. The relevant question is over which program is most effective for which shoppers at your store. The implementation decision is related to how many shoppers prefer which option and how effective those options are. There is no silver bullet.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

Shoppers will prefer personalized digital coupons. Personalization is the key to the success of all types of programs, whether coupons or price discounts on items that shoppers typically buy.

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John Karolefski, Editor in Chief, CPGmatters.com

Do retailers and marketers really not understand that all the cards, extra coupon loading, scanning from iPhones, and multi-level loyalty plans (lookin' at you, Safeway) are way too much work and aggravation to make the average shopper feel even the slightest bit "loyal"?

An honest look at the myriad plastic loyalty cards jangling from the keychains of shoppers these days should be adequate proof that while an individual store may gather some intelligence about a shopper's purchases and choices on a particular day of the week, they don't get anything resembling a true picture at all about the whole shopper or her habits and preferences across the channel and across a month's time.

'Liatt'

Unless I can get a coupon for every item I buy, what's the point? Coupons are generally only for overpriced name-brand products. What if my purchasing history only shows I purchase private label items? All this new technology to me is more of a distraction to keep consumers confused. I still find that most supermarkets in the USA that average a million, two million or more per week, or in excess of $20 per sq ft per week, do not have loyalty programs or digital coupons. Who is adding the most new store square footage in our country? High tech stores, or stores that offer simple ways to get low prices? Do the math.

David Livingston, Principal, DJL Research

Andy Casey, you are so right about Scan & Go. Walmart.com has brilliantly reasoned that card-based loyalty programs are a needless redundancy when there are numerous other shopper cues available to guide targeted programs. When the scale is large enough, these cues become highly valid indicators.

Most significant in this regard are the so-called "big data" resulting from social, mobile, local and search behaviors (SoMoLoMe). In Walmart's instance, that includes behavior on the individual store Facebook pages, and of course, use of the Scan & Go app.

Safeway Just for U and Stop & Shop's SCANIT solutions are still focused on in-store behavior. While innovative relative to the rest of the supermarket industry, they don't yet seem to grapple with the SoMoLoMe big picture.

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James Tenser, Principal, VSN Strategies

As much as I may like these programs, I think digital coupons are too much work for the average customer. Safeway j4u offers me 'personalized prices' that are often above regular prices at Winco and Walmart on every single item and above Kroger Smiths regular prices in many cases too; always above, well above, Kroger sale prices. And all too often at Safeway when I have tried to redeem, offers do not work properly or are vaguely worded requiring a visit to customer service, a confrontation, and in some cases an adjustment and in others a refund. And in some cases a subsequent phone call to Safeway Corporate.

The Kroger digital coupon program is mostly cents off coupons from manufacturers. Very little savings and not really worth the effort. They do a free Friday item and I think some divisions may do more with the program than Smiths does (nothing). These also do not always work and the values are so low if one does not work it is not even worth taking time to seek an adjustment.

'storewanderer'

I think the answer is both. Consumers respond favorably to preselected offers, based on what the retailer observes in their past purchasing behavior, as well as to location-based information. Allowing consumers to select their own offers, meanwhile, could help round out the merchant's knowledge of customers. For example, say the consumer shops another merchant for a particular item (say fresh meat), by providing a range of self-selected offers, that shopper could reveal a propensity for new categories at his or her regular store.

Still, while consumer self selection adds some dimension to a loyalty program, it will not necessarily result in relevance. And relevant experiences, based on past behavior, are still the best way to provide value and value-add service for customers.

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Bryan Pearson, President and CEO, LoyaltyOne

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