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Digital Paperless Coupons Continue Rapid Growth

By: 

Advisor, Executive, Entrepreneur | Expert in Digital Coupons, Retail Loyalty Programs, E-Commerce, Customer Analytics

Digital paperless coupons have continued to grow quickly and now are the most popular way to get savings from the Internet or mobile devices.

The market for digital paperless coupons, primarily load to card offers, is still young. My team and I at Kroger launched the industry’s first digital paperless coupon program in partnership with P&G in November 2007 but the industry didn’t really begin to take off until 2010 when YOU Technology, where I was CEO, launched retailer-branded digital paperless coupon sites at Kroger, Giant Eagle, and other retailers. Since then, digital paperless coupons have grown at a compound annual growth rate of 150%.

Based on my analysis of data from NCH, U.S. shoppers downloaded over 1.3 billion digital paperless coupons in 2014. Digital paperless downloads were up 27% after more than doubling in 2013. Overall, digital paperless coupon downloads have grown by over 20x since 2010 (see chart below).

Source: NCH Annual Topline View CPG Coupon Facts for Year-End 2014 (download based on total redemptions divided by est. redemption rates)

In contrast, the number of coupons shoppers printed at home actually shrank by about 7% in 2014 to 1.2 billion prints. Based on these numbers, digital paperless coupon downloads surpassed coupon prints for the first time (see chart below).

Source: NCH Annual Topline View CPG Coupon Facts for Year-End 2014 (downloads/prints based on total redemptions divided by est. redemption rates for each vehicle)

This trend will only accelerate over time as retailers and CPGs continue to shift marketing budgets to digital paperless coupons. Indeed, even Coupons.com, the dominant player in print at home coupons, is focusing increasingly on Retailer iQ, its digital paperless coupon platform.

In total, shoppers downloaded or printed 2.5 billion digital coupons in 2014, which was still less than 1% of total coupons distributed, implying that the digital paperless coupon market has a substantial amount of headroom to grow.

Digital paperless coupons are revolutionizing how retailers and engage shoppers for several reasons:

  • Provide a seamless way to deliver incentives via digital devices, in particular mobile phones (mobile already makes up over 50% of digital paperless coupon downloads);
  • Largely eliminates fraud and mis-redemption risk for CPGs and retailers;
  • Provides a robust platform for retailer-CPG collaboration.

Eight of the top 10 and 15 of the top 20 food/mass/drug retailers provide digital paperless coupons in one form or another. Kroger and Safeway continue to have the largest programs in terms of downloads although Target with its Cartwheel program has been generating significant consumer traction. The biggest hold out remains Walmart, which is by far the largest redeemer of paper coupons. Walmart purportedly shelved the rollout of a digital paperless coupon program earlier this year as part of a broader move to re-emphasize EDLP.

The digital paperless coupon market is largely shopper marketing driven. Unlike the FSI or print-at-home coupons, CPGs don’t have a national distribution vehicle to support national brand marketing campaigns. Instead, almost all digital paperless coupon downloads in 2014 were made from a retailer website or mobile app. The reason for this is simple: retailers want to drive traffic to their own digital properties and so make it difficult for shoppers to download digital paperless coupons from third party consumer websites or apps (such as Facebook, Google, Coupons.com, and Yahoo) or via CPG CRM programs.  As a result, CPGs primarily use digital paperless to support their retailer-specific shopper marketing initiatives, not national brand programs.

Looking ahead, I expect the digital coupon market will grow to 25% of total U.S. coupon redemptions within the next 3-5 years, up from 10% today (with digital paperless coupons accounting for 80% or more of this amount). This estimate assumes several key catalysts will emerge to drive future growth:

  • The remaining large food/mass/drug retailers launch their own digital paperless coupon programs, in particular Walmart;
  • Key retailers and CPGs agree to create a national distribution platform for digital paperless coupons that enables CPGs to reach a national audience of consumers with national brand dollars;
  • In-store proximity marketing goes from testing to full roll out as retailers deploy beacons, augmented reality, NFC and other technologies to deliver relevant offers to shoppers as they are shopping.

Please contact me   if you are interested in a more detailed analysis of the market including vendor and pricing trends.

Coupons Could Crown a Winner in the Mobile Wallet Wars

Want to use your phone to pay for your groceries at the checkout? Hope you like paying full price!

Largely touted as the next big thing in retail, mobile wallets are convenient, for sure. But for savvy shoppers, they come with an unfortunate hitch – mobile wallets don’t support coupons.

Until now, that is.

Merchant Customer Exchange (MCX) has announced that its CurrentC mobile payment platform will become the first mobile wallet to integrate digital manufacturer’s coupons. MCX has partnered with digital coupon provider Inmar, to allow users to digitally clip grocery coupons within the CurrentC app.

So why is this a big deal? It could help mobile wallets make the leap from a newfangled niche product, to a must-have.

If you’re handy with your smartphone, you may already be familiar with mobile payment systems offered by stores like Starbucks, Dunkin’ Donuts and Chipotle. To pay, all you have to do is scan a bar code on your phone – no more fumbling for cash, checks or credit cards.

But each of those platforms operates through the retailer’s own app. So while your pockets or purse may be a little lighter without having to carry your wallet around, your phone may end up cluttered with apps from every store you visit.

That’s where platforms like Apple Pay, Google Wallet and CurrentC come in. They’re just a few of several mobile wallets that are designed to be used anywhere you shop. All you have to do is link your payment method, and your store loyalty program information, and you’ll be able to use your phone to check out anywhere your preferred payment method is accepted, without having to carry cash, checks, debit or credit cards.

If you like to use coupons, though – hold the phone. You’ll still have to carry around those little slips of paper and stand there as your cashier scans them, or log on to your store’s website or app to load digital coupons to your loyalty card. That detracts from the convenience, speed and seamlessness that mobile wallets promise. Plus, with many retailers, if you use a mobile wallet to pay for online pickup or delivery, you can’t use coupons at all.

MCX hopes its platform will help solve that problem. “This partnership will enable CurrentC users to effortlessly access savings from many of the country’s largest and most popular brands,” MCX announced this week. “Access to individual brand offers that are redeemable through a mobile payment app at multiple retailers will distinguish CurrentC from other platforms currently in the marketplace.”

And there are a whole lot of other platforms in the marketplace. Apple, Google, PayPal and many others are competing to dominate the mobile wallet world. So far, none of them works across the board with every retailer, or every financial institution. And until now, none offered the ability to clip digital coupons within the mobile wallet application itself.

That’s largely because MCX was formed and is owned by a consortium of retailers. Most mobile wallets only know how much you owe at the end of your transaction, not what individual items you purchased. And without knowing what you bought, they can’t apply coupons. CurrentC is fully integrated into its retailers’ point of sale, so it knows what you bought and can apply coupons seamlessly.

Independent of CurrentC, some MCX partner stores like CVS and Meijer already offer digital coupons via their own websites and apps, and Target plans to make digital coupons available soon. But MCX partnerWalmart has long been a digital coupon holdout. So CurrentC could ultimately represent a backdoor way for digital coupon fans to get their fix at the country’s largest retailer.

If you’re itching to give it a try, you’ll have to wait a while, unless you live in Columbus, Ohio. That’s the only place CurrentC is in use just yet, as it operates an invitation-only pilot program. Rivals like Apple Pay and Google Wallet are in use much more widely, but they don’t have what CurrentC hopes will be its secret to success.

“Digital coupons are becoming the primary promotion method for reaching an increasingly mobile shopper base,” MCX said in its announcement this week. And if CurrentC’s coupon-ready platform succeeds, paying with your phone will not only save you time and trouble – but could end up saving you money, too.

Source: August 28, 2015 in Coupons In The News

 

What is a growth hacker?

growth hacker (noun) – one whose passion and focus is pushing a metric through use of a testable and scalable methodology.

“Growth hacker” is a new word for most but a long held practice among the best internet marketers and product managers in Silicon Valley. With mass media fading away and the onslaught of mass customization & niching on the web, marketing as we known it for the past 100 years has died. People are awash with mounds of data and marketing fatigue is at an all-time high. Users are drowning and won’t pay attention to the next best widget, regardless of how good it is. Distribution is now the number one problem that faces every product and every startup.

Growth hacking appeared as the modern way in the age of Web 2.0 to reach a market and distribute an idea. Instead of classic marketing which typically interrupts your day, a growth hacker uses “pull”; he or she understands user behavior provides value immediately to persuade. A growth hacker wraps messaging into the fabric of the lives and thoughts of users. A growth hacker will leverage across disciplines, pulling in insights from behavioral economics and gamification, to find the right message to pull in users.

A growth hacker finds a strategy within the parameters of a scalable and repeatable method for growth, driven by product and inspired by data. Growth hacking’s goal are based in marketing but driven by product instincts. A growth hacker lives at the intersection of data, product, and marketing. A growth hacker lives within the product team and has a technical vocabulary to implement what he or she wants.

The essential characteristic of a growth hacker is creativity. His or her mind is the best tool in their war chest. A growth hacker looks beyond adwords or SEO for distribution. Traditional marketing channels often means high cost per acquisition and low life-time value due to high saturation. In an age of social users, the right growth strategy with the right product-market fit will lead to massive scale through viral loops.

The end goal of every growth hacker is to build a self-perpetuating marketing machine that reaches millions by it’s self; however, growth hacking is a process, not a secret book of ideas. Growth strategies cannot be easily copied and pasted from product to product. Growth is never instantaneous. It is never overnight. It is a mindset at which you approach problems.

If you want to learn more, I provided some links below. You can contact me on through email: aginnt @ gmail.