Kroger Partners With AOL To Tap Paperless Coupons Into Loyalty Program

  • April 4, 2008 at 12:00 AM EDT
  • By Mike Santos
Screencap of Shortcuts Website
Screencap of Shortcuts Website
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Kroger is targeting today’s Internet-savvy consumers with a new paperless coupon program from AOL. The second-largest supermarket retailer in the U.S. (behind Wal-Mart, according to Supermarket News) is offering its customers an online service that loads coupons onto registered users’ loyalty cards. Customers can then redeem those coupons at checkout in the store. Shortcuts, is a new AOL service, free to consumers.

Though Shortcuts eliminates the need for clipping coupons, consumers who still shop with paper coupons can print out a list of “clicked” coupons to redeem at the grocery store. Shoppers can review savings on their receipt and online. Registered users can also choose to receive email alerts detailing coupons redeemed, savings-to-date, and the value of coupons remaining on their loyalty card.

“Younger consumers (under 35) don’t tend to response to coupons very well,” says Matthew Tilley, director of marketing at CMS, a promotions management solution provider. “90% of CPG coupons are made available in newspapers, which they’re not reading. So if you’re trying to reach a consumer audience with a coupon, you’re going to have a lot more luck if you’re using a cell phone or internet based coupon.”

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Kroger also is reaching out to the ever-increasing mobile generation by partnering with Proctor & Gamble, Clorox, Del Monte, General Mills, and Kimberly Clarke to offer coupons via mobile phone through Cellfire, a mobile application that has issued more than five million coupons since 2005.

Other retailers are approaching the paperless era in different ways:

  • Giant Eagle, the 22nd largest U.S. grocer, is providing e-Offers to its customers. A free electronic coupon service, e-Offers allows customers to select coupons via Giant Eagle’s website and add them directly to their loyalty card. .
  • Shoppers Drug Mart in Canada offers the Shopper Optimum Program, which allows shoppers to enroll via paper form and begin receiving bonus points to redeem during their next shopping trip. Shoppers Drug Mart cardholders receive alerts via email about rewards and discounts that have been loaded onto their card.

The Future of Paperless Coupons

Paperless coupons are a win-win all around. They offer convenience for consumers, and a means for retailers to reach their target population easily, while creating brand awareness and building loyalty. Paperless coupons also receive kudos from the proponents of going “green,” since they reduce the overall consumption of paper.

“I believe in five to 10 years, there will be no paper coupons,” says Doron Levy, president of Captus Business Consulting, who specializes in customer service, client retention, employee motivation, and operations management. Levy anticipates that vendors and manufacturers will work e-pons into individual chains’ loyalty program and each user’s card will have the discount programmed onto their account.

“This can be an excellent vehicle to showcase new products and increase sales of existing lines,” Levy says of Shortcuts. “As people turn to the web for shopping and product information, vendors can use this to literally close the sale in cyberspace by offering a discount or freebie to the customer via the individual loyalty or points card.”

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