BrainTrust Query: Are we creating too many promotion channels?

Discussion
Jan 22, 2010
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Commentary by Bill
Bittner
, President, BWH Consulting

During my visit to the ARTS pavilion at
the National Retail Federation Big Show this year, one of the vendors I ran
into was Third Solutions, Inc. They are another contender in the digital receipt
arena, but they have combined their digital receipt offering with a personalized
marketing campaign that delivers electronic coupons over either their website
or the retailer’s. Customers don’t have to clip coupons, which are delivered
automatically at checkout time.

The promotion aspect sounds like another company
we highlighted last year, Zavers.com, which offers a way for manufacturers
to distribute consumer POS coupons electronically. This got me thinking about
how difficult it is becoming for advertisers to reach consumers through the
retail channel. If each retailer signs up with a different software house to
manage their electronic coupon offer, how will advertisers keep up with the
fragmented marketplace? It is similar to the effort on data synchronization,
where retailer-specific requirements for adding new items make it difficult
for manufacturers to introduce new products.

To some extent, Google AdSense
and DoubleClick take care of this issue for the virtual world. Google advertisers
contract with Google; websites offer display space; Google places the ads,
and pays the website when users click on the link. The advertiser only deals
with Google, but their message is distributed across various websites. DoubleClick
provides broad distribution and management of banner ads for advertisers in
online publications.

Paper coupons can be distributed a variety of
ways. Free standing inserts, direct mail, in-store promotion, and third party
affiliations can all be used to distribute paper coupons and the same coupon
can be redeemed at many retail locations. Right now, electronic promotions
require the advertiser and consumer to log into a specific website in order
to present or select their promotions. There has to be a better way.

Discussion
Questions: Is there an industry-wide answer for the convenient distribution
of electronic coupons? Is there an opportunity here for advertisers or
an independent company to act as an “electronic coupon broker”?

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10 Comments on "BrainTrust Query: Are we creating too many promotion channels?"


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Gene Hoffman
Guest
Gene Hoffman
11 years 3 months ago

Is there an industry-wide answer for convenient distribution of electronic coupons? Perhaps Google can create an answer someday but not so long as consumers have to log into a selected website to secure a specific coupon.

For paper coupon dispensers, utopia is a blessed past never to be abandoned; for electronic dispensers it is just beyond the horizon. But can anyone see beyond that horizon today?

Max Goldberg
Guest
11 years 3 months ago

With so many coupon services currently on the scene and more coming online as technology changes, there might well be an opening for a master coupon planner. This firm could be tasked with staying up to date with coupon delivery vehicles and offering bundles of services to manufacturers. This could work for mass-distributed coupons.

That having been said, the real growth in effective couponing will come from retailers mining the data in their loyalty cards an offering brands an opportunity to provide real value to individual consumers. This is not something that can be handled on a mass basis.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
11 years 3 months ago

Electronic coupons are relatively new and the great news is there are plenty of vendors including Third Solutions, Inc, Coupons.com, Cellfire, etc…competing for business. This free market is what helps create the strongest solution over time. I don’t imagine there will be one clearing house for coupons in the next few years. If that happens, innovation will slow down dramatically. Thanks to Apple, Microsoft was not able to rest and had to create a better operating system. The consumer benefited because now we have Windows 7 and Apples OS to choose from.

Competition is good and lets both consumers and corporations know there is a market. I always love when a sales executives or management teams explain to me that they are the only ones that do what they do. I simply reply, “I guess nobody really wants what you offer. If people did, competitors would appear and give the customer options.”

Competition is not good; it’s great, as long as you keep innovating.

James Tenser
Guest
11 years 3 months ago

I have little doubt that the future of paperless couponing lies within the next generation of NFC-equipped smart cellphones. Their “electronic wallet” capabilities (already proven in Euro and Asian markets) are a natural for coupon delivery, storage and redemption. Redemption is “tap and go,” similar to Visa Paywave, and Mastercard Paypass.

With no paper to track, the redemption process becomes completely electronic and instantaneous. Unique coding and security protocols make counterfeiting virtually impossible, and tracking and analytics are powerful enough to target individual shoppers, locations, times and loyalty patterns.

Finally, the Internet, cellphone cameras, bluetooth, and NFC radio may all be used to capture and hold coupons in the phone, making any medium–electronic or print–a potential delivery vector for the coupon offer, with every delivery trackable.

In full disclosure, I am an advisor for an early stage firm, Contactless Data, Inc. (http://www.contactlessdata.com) that is championing this approach. I’m quite certain it’s a matter of time before the e-coupon wallet seems completely standard, maybe even self-evident.

Dave Carlson
Guest
11 years 3 months ago

The FMCG industry and shoppers will see real benefit in the establishment of single channels (let’s hope for a few competitors) of shopper-relevant promotion and advertising content. Said content optimized for each shopper and reflecting the individual retailer’s marketing strategy.

This content will be delivered through any and all touch points the shopper finds useful (not just mobile phones). Instant, accurate measurement of the retail results will greatly improve marketing efficiency and effectiveness for both retailers and their vendor partners.

As with any emerging industry, new ideas and approaches will gain appeal and share on their merits. The best will become apparent and consolidate both organically and by suitor involvement.

Ultimately, a few of the newer players will own respectable franchises. The established firms with the most to gain or lose by remaining on the sidelines will invest heavily in acquiring proven business models.

I think it fascinating to consider who the longer term winners may be.

Mark Johnson
Guest
Mark Johnson
11 years 3 months ago

I suggest a book, “The Paradox of Choice,” by Barry Schwartz.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
11 years 3 months ago

Electronic coupon distribution should be the purview of Facebook and/or Twitter. Either could be a control/distribution point incorporating data synchronization. Go where people go, or fish (not phish) where the fish are. In other words, rather than forcing shoppers to access specific websites for coupons, make the coupons available where shoppers regularly go online. Facebook and Twitter could dictate the electronic protocol.

Gene Detroyer
Guest
11 years 3 months ago

At the beginning of this year there already was an increase in merger activity in the digital marketing space. We will see the same in integrated couponing. Some of the players will do very well and they will eat up those that do not. Others will find they don’t have critical mass with their customers and will merge to get it.

The real question is, however, what will “coupons” become? Coupons are a funny tool. The objective is to maximize the redemption. But, the higher the redemption rate, the less ROI the marketer gets on the program. The boom in couponing was not to redeem a lot of coupons, but to get retailer support for display and price reductions, which did move product. It is hard to get a more inefficient tool for price reduction than a coupon.

Kai Clarke
Guest
11 years 3 months ago

Stop the coupon madness! This is an outdated, inefficient (and not green) advertising vehicle. Want to best attract more attention from consumers? Drop the increased price that coupons actually represent to the consumer. This puts more spending power into the hands of consumers, keeps them in stores longer, and gives them more monies to spend on their shopping expeditions. Do not confuse great advertising, and great marketing with couponing. Eliminate the coupons and see where the decreased price of the product increases the sales velocity of the item several times over.

Shilpa Rao
Guest
11 years 3 months ago

There are two issues here. One is of coupon distribution and other of measuring channel effectiveness. Channel effectiveness could be easily measured by generating different coupon codes for different channels and further capturing loyalty card information with the coupon redemption. As for distribution, we have already piloted mobile and in-store coupons which would be pushed on the smart phone. Furthermore, these could be managed by an app on your phone.

If digital coupons maintain their format it wouldn’t be difficult for an app to pick coupons from various retailers and put them all together and pick the relevant ones based on the users’ locations.

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