The grocery shopping experience is changing as more consumers download digital coupons and use their mobile phones in the store.
“The way people shop is becoming much more interactive and real time.Digital is changing shopping in profound ways,” said Ken Fenyo, CEO of YOU Technology, a provider of digital coupon solutions.
To back up his claim, he cited several statistics:
- 80% of smartphone owners us their devices while shopping in the store
- 37% of grocery shoppers access their store’s social media sites on Facebook and/or Twitter
- 36% of shoppers research grocery purchases online prior to a shopping trip
- 33% of shoppers use their mobile phones in store to look for recipe ideas, coupons, nutritional information and competitor pricing.
“In the last three years, we have seen a huge increase in digital couponing particularly in grocery,” he said in a presentation recently in Cincinnati at a digital marketing conference hosted by dunhumbyUSA, the customer science company, and the American Advertising Federation-Cincinnati, a local affiliate of the nation’s oldest advertising trade association.
There has been a 10x growth in digital coupon downloads over the past three years, Fenyo said, citing statistics from NCH Marketing and Inmar. Digital coupon redemptions are up 234% in the first half of 2013 and are now 2.5% of the total, versus less than 0.1% in 2010. Most of the digital coupon downloads have been from retailer media, he said.
Meanwhile, Fenyo observed that most consumer packaged goods manufacturers are at least testing digital coupons – both print-at-home and load-to-card offers. According to a survey from the Shopper Technology Institute, 84% of CPGs are using digital coupons: 13% in a primary role, 45% in a supporting role and 42% in tests.
He said the change in shopper behavior provides opportunity for marketers and retailers to engage the digital shopper, make coupons more relevant, and enhance the in-store experience.
Engage the Digital Shopper
The key to engaging the digital shopper is to deliver integrated, omni-channel marketing; for example, email ads, social media, mobile, and in-store via smartphones. Fenyo several examples of retailer programs:
- Kroger, the giant grocery chain, aggregates digital coupons and content via its digital coupon center. The retailer integrated multi-channel digital coupons via Kroger web, email, social, mobile and in-store media. The retailer aggregates over 200 coupons weekly from national brands and private label. It has posted 500 million downloads. Mobile app visits are up 120% with a 45% increase in traffic at Kroger.com.
- Meijer’s mPerks is a digital coupon and personalized rewards program that doesn’t require a card. Shoppers use their mobile phone number and PIN at checkout to redeem coupons. Over 1.5 million members have clipped over 80 million coupons and saved over $21.5 million so far this year.
- 7-Eleven’s mobile app offers digital coupons as well as daily deals. It recently added the ability to check into a store via Foursquare. No card is required as shoppers scan mobile bar code to redeem offers. The app customizes itself to guest preferences based on geography, time of day and local weather.
Make Offers More Relevant
Retailers and manufacturers are making their offers more relevant, Fenyo said, by personalizing them based on data. He used Safeway as an example:
- Safeway’s Just for U program consists of digital coupons, personalized circular, and personalized pricing on items shoppers buy or should be buying versus key competitors. The program has over 5.4 million members, which is over 45% of Safeway’s customer base. The retailer estimates that its program accounts for over 40% of all digital coupon redemption in the U.S.
Enhance the In-Store Experience
Companies can enhance the shopping experience by making their marketing work real-time. “How do I engage shoppers at that moment of planning and decision in store?” Fenyo said, giving two examples:
- ShopRite offered shoppers a digital coupon for Milano cookies integrated with the front page of the print circular, at shelf with ad tags and in-store with display signs. All placements featured a QR code linking back to the digital coupon center to download the offer, which had unlimited downloads to support the featured status. The promotion posted a redemption rate of over 50%
- Walmart’s Scan & Go system, being tested in more than 200 U.S. stores, lets shoppers scan merchandise with their smartphones and pay at the self-checkout counter. Geo-location recognizes when shoppers are near participating stores and prompts them to check in. A recently-added feature enables shoppers to save on private label and national brands by downloading digital coupons that automatically redeem at checkout. The app also stores an electronic receipt for the shopping trip.