The Future Of Couponing Is Digital But Not Mobile

  • April 25, 2014 at 12:01 PM EDT
  • By Retail TouchPoints Team
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By Tim Belvin, Visible Brands

Traditional print couponing, while sometimes effective, is almost always inefficient. It may indeed move the dial on sales but oh count the ways of waste.

There’s the tedious hand counting of each and every redeemed coupon, there’s the steep distribution expense, and then there’s the potential for fraudulent redemption. It may be even more cumbersome for the consumer given all the clipping, cataloging, expiration tracking, and carriage to the supermarket, not to mention the cheapskate stigma some feel and endure. It’s no wonder then that the overall number of coupons redeemed last year fell over 14%, and that less than one of every hundred coupons printed is actually used.

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Yet the biggest waste may be in the lack of control and real-time metrics needed by marketers to optimize new user trial and cost effectiveness. The cold truth is most brand managers are flying blind on the cost effectiveness of a 50 cent coupon versus a dollar coupon, a difference that could easy result in $500,000 or more of wasteful marketing spending. 

Indeed with the long lead time and one-size-fits-all limitations of print, it could be argued there is no clumsier tactic in a marketer’s toolbox these days than the overused and increasingly under-loved print coupon. Any post-mortem on the dearth of new product successes over the past 30 years or so from even the most highly respected corporations like P&G, should start first and foremost with the “dumb” print coupon.

In response to this market opportunity, there have been huge sums of venture capital funding that have poured into smartphone-based, consumer-centric mobile couponing solutions that promised to revolutionize the $100 billion dollar U.S. retail coupon industry. The tease was tantalizing: Flexible, intelligent couponing, and electronic in-store delivery at the point of sale. And in each case, all have failed miserably because the execution is tedious and retailers were frustrated by the “spot” shopping tendencies the new technology fostered. Most shoppers simply don’t have enough hands, time or patience to hold an extra gadget and wait to download apps for a few dollars of potential gain. All these wonder solutions failed to jump the “consumer chasm” from early adopter to mainstream because they were inconvenient.

The future may not be mobile but it may well be digital. In a field test of a new digital coupon platform, average brand lift was 500% and redemption rates were 2X traditional print coupons. 

The platform includes shopping carts with computer chips and rugged touch screen monitors at the beginning of each shopping aisle. All the customer has to do is validate with her touch, the onscreen coupon, put the product in her cart and check out. All the rest, including the deduction and redemption, is completed automatically.

 If you are brand manager in a competitive category like pet food and are marketing a product for large dogs (whose owners are much more likely to reside outside the urban core) this level of targeting and flexibility and real-time feedback is a dream come true. And for the consumer, digital coupons mean no more cutting, clipping and worrying about expiration dates, or concern at checkout.

The future of couponing may have indeed arrived and it promises to disrupt the grocery aisle to the benefit of retailers, CPG brand managers and consumers.

Tim Belvin is the Co-Founder and CEO of Visible Brands, an innovative in-store digital couponing platform based in Seattle. Previously, he served as Global Retail Enterprise Architect for Microsoft’s Business Solution initiative, where he was responsible for driving innovation, software development and solutions within the retail software, mobile media and payments arena. He can be contacted at Tbelvin@visbrands.com

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