Aug 31, 2020by Tom Ryan
Digital coupons in the U.S. surpassed redemptions of paper coupons for the first time during the second quarter, according to Inmar Intelligence. The milestone was highlighted in an article in a Wall Street Journal article that detailed digital marketing shifts made in recent months as online purchases have accelerated in the stay-at-home economy. Walgreens, according to the article, suspended its print circulars to shift to online-only and saw digital redemptions climb about 80 percent this year.
CVS has extended the coupons that come with its in-store receipts online.
For grocers, eliminating or reducing print coupons can be a major money saver. Digital coupons promise to deliver more relevant offers based on a shopper's purchase history versus those distributed in newspapers based on ZIP codes. Further, a personalized digital coupon can be delivered to a shopper in 24 to 48 hours versus six to eight weeks for one heading to a mailbox.
Artificial intelligence (AI) also promises to take coupon targeting to another level. Jason Mathew, head of insights & personalization at Symphony RetailAI, told Grocery Dive last October, "Trying to strategically address areas where you see gaps in customer purchasing patterns across the different departments in the store is one way to move customers in the right direction, from the retailer's perspective." However, Valassis' "2020 Consumer Intel Report" based on surveys from the fourth quarter of 2019 and a follow-up in June 2020 found that, while the popularity of digital coupons continues to increase, "consumers still rely heavily on paper coupons, and they continue to account for the largest share of coupons distributed and redeemed."
Among Valassis' findings:
- Seventy-one percent of shoppers use print coupons, down from 77 percent in the 2019 survey and well off the recent peak of 93 percent in 2018;
- Seventy-three percent use digital coupons, up from 67 percent in 2019;
- Sixty percent use both print and digital coupons, up from 53 percent in 2019;
- While they plan their shopping, 40 percent look for printed coupons, 34 percent look for digital coupons or discounts, 25 percent read store emails, and 26 percent use a store's mobile app.
DISCUSSION QUESTIONS: Are consumers increasingly shifting to digital coupons or being conditioned to expect both digital and print coupons? Will digital coupons still need to provide more value to convince the majority of grocery shoppers to make the full switch?Braintrust
"Digital coupons offer a convenience that is just not possible with paper coupons." "There are many strong stories of retailers who have eliminated circulars with minimal to no margin impact while significantly reducing marketing expenses."
"It will be a while before a brand manager doesn't use an FSI to boost sales of a product."