Consumer trends push changes in digital coupon strategies

Digital coupons are becoming somewhat of a necessary evil for retailers, according to Carol Spieckerman, CEO of NewMarketBuilders. But not all retailers are on the same page .

Dollar General, one of the weakest in digital prowess among value retailers, recently announced a partnership with Coupons.com that will make digital coupons available in its 11,300 stores.

“The DG Digital Coupon program provides our customers with an easy-to-use and convenient platform to use digital coupons toward our everyday low prices, helping them get the products they need at prices they want,” said Todd Vasos, Dollar General’s chief operating officer.

He said the service is aimed at shoppers who are using digital and online technology to save money which is part of Dollar General’s everyday commitment. To use the DG Digital Coupon Program, customers sign up online or in stores using a numeric identification number, which is typically their telephone number. After signing up, customers select the most relevant coupons to be added to their profile and the discounts are applied at checkout to customers’ eligible purchases, including leading national brands and Dollar General’s store brand products.

“As more retailers offer the option, shoppers have come to expect them. I like what Dollar General is doing with its DG digital coupons. The program is truly shopper centric because it allows customers to choose which coupons they want to use online then have the savings automatically applied at checkout. Beyond the convenience factor, it is a paperless transaction which gives Dollar General sustainability points,” Spieckerman said.

While Wal-Mart is miles ahead of Dollar General with numerous digital innovations including e-receipts, their digital coupon policy is somewhat old school.

“Walmart’s insistence on paper-based coupons is inconsistent with its sustainability push but it does encourage shoppers to opt for its Savings Catcher program instead,” Spieckerman explained. “Savings Catcher is great for Wal-Mart because it keeps shoppers spending in the Walmart ecosystem as they redeem gift cards. It may sound convenient for shoppers to load coupons onto their smart phones but not every shopper will be comfortable handing their phone over to a store associate. Paperless and automatic is the way to go.”

Wal-Mart has made manufacturers coupons available on its website for several years, according Ravi Jariwala, spokesman for Wamart.com. He said the site allows consumers to surf for the coupons they want, click the box to clip, and the savings are tallied onsite. The consumer must print out the coupons, which can then be redeemed at their local stores.

Jariwala said during 2013 Scan & Go tests there was a digital coupon function that automatically deducted the coupon from the purchase. Scan & Go is no longer being tested, but Jariwala said Savings Catcher and e-receipts came out of the learnings from the Scan & Go tests. 

He said when a shopper signs up for e-receipts they automatically get the benefits of Savings Catcher, which was rolled out nationally this week and expanded to include produce and select general merchandise.

GROWING MOBILE
Just how pervasive is mobile shopping? Shop.com reports 156 million Americans own smartphones. Goldman Sachs projects that U.S. retail sales directly on smartphones will more than double from $70 billion this year to $173 billion by 2018. Similarly, tablet sales will more than triple from $130 billion this year to $453 billion in 2018.

Among U.S. smartphone users, approximately half have consulted their phones to find store information such as location and hours. Half as many again tap their smartphone when they’re browsing or looking for a product or service. And while 37% of 18-to-34-year-olds have purchased a product on their smartphone, so have 29% of smartphone users 35-54 and 14% of those over 55, according to Shop.org.

This summer, 54% of back-to-school shoppers cited coupons as the leading factor that influenced them to shop at a particular store. 

About half of U.S. Internet users will have redeemed a digital coupon by the end of this year. Roughly half (48%) of those are mobile coupon users, up from 39% last year, and more growth is ahead, according to Prosper Insights and Analytics.

WHAT’S NEXT?
Retailers are strategically using digital coupons to achieve a variety of goals beyond the immediate sale. For example, Ace Hardware recently concluded a test in Northern California that encouraged in-store shoppers to text them for a coupon. 

Ace reported that the test increased average basket size in the store and grew the company’s opt-in text-messaging list. Prosper Insights notes that coupons can be a key element in campaigns to re-engage customers, avoid abandonment on the checkout page and rescue abandoned online carts.

“The budgeting aspect of Wal-Mart’s Scan & Go was one of the most popular traits singled out by our mobile users. When they scanned an item into their phone and e-cart it kept a tally of their total purchase. Consumers liked that aspect,” Jariwala said.

Gibu Thomas, senior vice president of mobile at Walmart.com, said during the June shareholders week that e-receipts hold much promise as a platform upon which applications may be built. In the future, he predicts through e-receipts, shopping lists will be generated based on previous shopping trips and then emailed or texted to the consumer as they enter the store. Those lists could also attach manufacturer coupons for more savings potential.