Source: kroger.com
New research shows strong influence of digital coupons
Jack Grant
Through a special arrangement, presented here for discussion is a summary of a current article from the bi-monthly e-zine, CPGmatters.
New research by Inmar Intelligence finds that 54 percent of all shoppers recently purchased a new brand because it was less expensive. However, nearly a third were influenced by a digital coupon.
The findings from Inmar’s 2021 Promotion Industry Trends Analysis and July Shopper Insights Study come at a time when higher grocery prices are causing shoppers to look for ways to offset the impact to their wallet. Digital coupons are proving to be a solution at the right time and right place.
Consumer adoption of load-to-card (digital coupons) has been on an upward trajectory since 2018, and surpassed free-standing inserts (FSIs), or paper coupons, in 2020. Through August 2021, digital coupons continue to lead in share of redemption volume, despite FSIs having nearly 20 times the distribution volume.
Specifically, according to Inmar’s analysis, digital coupon redemptions accounted for 33 percent of all coupon redemptions in the first half of 2021 compared to 24 percent for FSIs. Overall digital coupon redemption volume for 2021 year-to-date saw a 13 percent year-over-year increase, indicating continued and increasing strong demand for both savings and the convenience of digital coupons.
The new data also suggests that today’s shoppers are willing to try new brands — and these digital promotions are greatly influencing this decision.
July 2021 recorded the highest rate of brand trial year-to-date with 72 percent of all shoppers reporting that they made a new brand purchase. Eight-four percent of shoppers who used a coupon for a recent in-store purchase and 92 percent who used a coupon for a recent online purchase indicated that the coupon changed their purchase decision, leading them to either purchase more, purchase sooner or purchase a product for the first time.
“Shoppers are continually looking for value and savings, now more than ever and as their lives become increasingly digital, they are looking to digital methods to deliver savings,” said Spencer Baird, EVP and president, MarTech at Inmar Intelligence. “The flexibility, targeting, attribution and speed to market of digital incentives enable brands and retailers to meet both the needs of shoppers as well as their own objectives.”
Discussion Questions
DISCUSSION QUESTIONS: Do you think digital coupons have a greater capacity to influence product trial and other shopper behaviors than paper coupons? Are shoppers still encountering pain points when using digital coupons?
Poll
Loading …BrainTrust
The supply chain crisis is another key reason consumers are more open to leveraging digital coupons and trying new brands – their current brand favorites don’t have in stock what they’re looking for, so they need alternatives. This is a prime time for encouraging trial among new consumer groups. Digital coupons are certainly easier to use than paper in the sense that smartphone penetration means access to digital coupons is more convenient than having to remember to bring in a piece of paper. I also think the search functionality/findability of digital coupons makes them a preferred approach over paper. You have to be intentionally seeking paper coupons to find them, whereas digital coupons get pushed via social media and internet search – a much more convenient path.
The pain points are real. My experience in a local Safeway is that that it can be difficult to unlock the coupon. I find myself taking a picture of the digital coupon promo at the shelf edge in order to remember the offer. Then the check-out employee assists in finding the coupon within the app on my phone (not a comfortable COVID-19 interaction). Shoppers need to follow a number of steps including making sure their last home delivery is not open in the app, and to identify the physical store location they are in. With all the geo-fencing technology available, this should be automatic.
Digital is clearly the future as more and more shoppers embrace mobile as the screen of choice for in-the-moment shopping, whether that is looking at reviews, inventory on hand, product features, or coupons. Friction points still exist with user experience but, overall, it is getting better as companies are putting resources behind customer 360 initiatives. 5G will also offer additional capabilities for companies to creatively leverage to influence trial, purchase and consumption.
Given that most of us are tethered to our phones — where the digital coupons live — expect to see digital coupon adoption only rise.
While digital couponing has been around for a while in chains like Target, CVS and H-E-B, the key is to make it easy to access the coupons while shopping. Notifications are also vital (via SMS or email) to let customers know of coupons which are of interest to the customer.
I am inundated with a blizzard of unsolicited digital coupons. To the point now that I speedily click right past them. I am probably missing some great deals or an introduction to a new and interesting brand, but there is no way I can digest all that promotional content.
The real question is, how long will it take for printed coupons to be obsolete?
The value of digital coupons is that you don’t have to search for or, better, remember a coupon. The digital coupon can prompt you now or even when you are in the store. As technology advances so will the use of digital coupons. Walk by the soda aisle and up pops a coupon for Coke or Pepsi.
I imagine the pain point is largely with my generation navigating mobile.
In China, all price prompts (coupons) are digital and have been since I have been going there.
There may be some pain points now, but when they are worked out, this is a world changer and sales generator.
Given that the vast majority of today’s consumers are tech-savvy, digital coupons are surely more effective than paper coupons. However, we cannot deny the fact that a portion of our customers still prefers paper coupons. As a result, marketers must embrace digital coupons, but they must also ensure that they resonate with consumers who prefer physical coupons.
Despite our society’s technological advancements, making mobile payments in the United States remains tough. In my experience, American Eagle Outfitters, a brand that caters to youthful clients, refused to take mobile payments. On the other hand, mobile payments at Costco are as easy as a breeze. This, in my opinion, is the most difficult challenge for digital coupons.