Consumers turn ‘e’ as they use more coupons

“Look ma, no hands,” is the refrain of excited children riding their bikes. With similar glee, “Look ma, no scissors,” has become a rallying cry of coupon users in today’s economy who venture beyond clipping into electronic Web-, cell- and frequent shopper card-based coupons for savings. Discount desire is a key driver of this trend today, but so are technologies that ease electronic distribution and redemption. Fraud protections built into online coupons today—safety measures that weren’t always in place—will also be key to their continued uptake by consumers, retailers and CPG. The 2,200-store Kroger program between Cellfire and CPG leaders such as Procter & Gamble, Clorox, General Mills, Pepperidge Farms, Kimberly-Clark and Del Monte is one live electronic example. It marks the first time a mobile application has linked to a user’s grocery savings card and a retailer’s point-of-sale system in a closed loop to enable end-to-end digital coupon processing. It applies discounts automatically when customers present their savings cards at checkout. No paper is involved. Consumers can manage coupons from their cells or their computers at home, on the go, or in the store. Cellfire, which is not a text message coupon service, issues new grocery savings offers every two weeks.

“Look ma, no hands,” is the refrain of excited children riding their bikes.

With similar glee, “Look ma, no scissors,” has become a rallying cry of coupon users in today’s economy who venture beyond clipping into electronic Web-, cell- and frequent shopper card-based coupons for savings.

Discount desire is a key driver of this trend today, but so are technologies that ease electronic distribution and redemption. Fraud protections built into online coupons today—safety measures that weren’t always in place—will also be key to their continued uptake by consumers, retailers and CPG.

The 2,200-store Kroger program between Cellfire and CPG leaders such as Procter & Gamble, Clorox, General Mills, Pepperidge Farms, Kimberly-Clark and Del Monte is one live electronic example. It marks the first time a mobile application has linked to a user’s grocery savings card and a retailer’s point-of-sale system in a closed loop to enable end-to-end digital coupon processing. It applies discounts automatically when customers present their savings cards at checkout. No paper is involved. Consumers can manage coupons from their cells or their computers at home, on the go, or in the store. Cellfire, which is not a text message coupon service, issues new grocery savings offers every two weeks.

Against this backdrop—86% of households used coupons in December and drove 89% of all-outlet dollar sales, said Nielsen—e-coupons in many forms should keep on the rise. And heavy coupon users are important to stores and brands: they make 85 grocery trips and 28 drug store trips annually, vs. 44 grocery and 9 drug store trips for non-users. For the first time in more than two decades, coupon usage in 2008 held steady rather than fell.

So it’s little surprise that coupons.com, which was named by Nielsen Online 2008 as one of the leading Web sites for discounts, estimates that nearly 40 million consumers print online coupons today. Internet coupons are gaining critical mass, up to about 2% of coupons distributed. What really excites, however, is their redemption rate of 13%, according to Inmar, the parent of CMS, when compared with the classic 1% redemption of paper coupons.

The higher redemption rate of e-coupons stems largely from more precise targeting of coupon recipients, and their willingness to give up information about their buying habits in exchange for specific offers.

At SupermarketGuru.com, we’re all for win-win propositions, as long as consumer privacy issues remain paramount, and as long as retailers and CPG can keep ahead of fraudulent opportunists who will continually aim to raise the stakes. People need to save, and brands and stores need to differentiate. We believe that e-coupons have the potential, with the right safety measures and performance metrics behind them, to evolve into effective tools that help achieve everyone’s objectives.