Grocers trying out digital coupons
CINCINNATI (AP) - January 14, 2008 upermarket chains are trying out paperless, or digital,
coupons, to help the thrifty-minded save time while saving money.
Shoppers load the online discounts onto their store loyalty cards,
receiving the credit at the checkout.
Grocers see the innovation as a way to build customer loyalty,
drawing consumers who are increasingly spending time online to
their Web sites and ultimately, their stores. The move could
increase coupon use by attracting shoppers who don't bother with
paper coupons. It offers convenience for the companies in reducing
handling, tallying and shipping of coupons, as well as cutting
paper use.
Kroger Co., the nation's largest traditional grocery chain, and
Procter & Gamble Co., the largest consumer products company, are
partners in a digital coupon trial that began last month. Other
supermarket companies around the country have been trying out ways
to offer digital discounts in addition to the traditional clip-outs
from newspapers and mailings.
Although online coupons for ordering everything from DVDs to
laptops on the Internet have been around for several years,
couponing, especially for groceries, is still dominated by paper.
Digital use by companies with the combined reach of
Cincinnati-based P&G and Kroger could help transform habits.
Some early users like the convenience of paperless coupons.
"You don't have to waste your time going through all those
little pieces of paper in your purse," said Carol Hoffman, a
Covington, Ky., woman who's been using digital coupons on her
Kroger card.
"It's really nice, because I always forget to bring my coupons
along ... and I don't have to organize them," said Therese
Sangermano, a Cincinnati mother of three who's been using the
paperless coupons to save on P&G products such as Pampers diapers
and Dawn dishwashing liquid.
The digital coupons, which are posted on the grocers' Web sites,
can't be doubled, but expiration dates still apply. Selections are
limited during the initial trials but companies expect to expand
digital offerings soon.
Giant Eagle, a Pittsburgh-based regional chain, in November
launched "E-offers," allowing customers to load coupons for
20-plus products, including national brands such as Minute Maid
orange juice and Kellogg's cereal, to their loyalty cards. Giant
Eagle spokesman Dan Donovan said it plans to expand paperless
coupons as customers become familiar with the program.
Coupons for groceries date to the late 19th century, and
industry experts say the majority of American households still
regularly use them. Combing through Sunday newspaper coupons is
still a ritual in some homes, and a scene in the "The Sopranos"
TV series found Paulie "Walnuts" Gualtieri clipping coupons,
showing that even mobsters used to flashing wads of $100 bills like
to get their 50-cent discounts.
Annual savings is estimated nationally at about $3 billion, but
that's only a small percentage of potential savings from unused
coupons, according to industry estimates of redemption rates as low
as 1 percent.
"It's great to see the innovation and I'm happy to see two big
players taking a lead in that," Peter Meyers, vice president of
the Toronto-based marketing firm ICOM Information & Communications
L.P., said of the Kroger-P&G trial. But he said it might take
awhile for digital coupons to take off among grocery shoppers.
"If you're very computer savvy, this is probably a plus," he
said. "But if you're more of a traditionalist, paper is familiar
and this is not."
Meyers said the early grocery efforts have room for improvement.
Shoppers still have to invest time looking through the online
coupons to pick the ones they want.
Ken Fenyo, Kroger's vice president for corporate loyalty, said
Kroger means to complement traditional paper coupons, but expects
to expand its current pilot program as part of its recently
overhauled Web site.
"We really are just trying to provide more options, not take
things away," he said. "We know many of our customers are online
heavily anyway. I believe over time, more and more customers will
want to use the online option."
Some grocers are also offering in-store paperless coupons.
Chicago-based Unicous Marketing Inc. said regional chains, such as
Springfield, Mass.-based Big Y, are trying its EZ-PIC program in
which "instant coupons" are advertised on store shelves and cut
the item price electronically at checkout. Among participating
manufacturers are Chicken of the Sea tuna, Ocean Spray juice drinks
and Borden milk.
Fenyo said Kroger will broaden its program, using e-mails to
alert customers that coupons for products they regularly buy are
available online, and is in contact with other manufacturers about
offering digital coupons for their products.
Matt Kemme, a P&G marketing manager, said the company sees good
security and strong consumer targeting opportunities with the
digital coupons and expects to expand its "eSavers" beyond the
current test.
"It's very early, but we've been able to run the water through
the pipes and from what we've seen, things are looking pretty
good," Kemme said.
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On the Net:
http://www.kroger.com
http://www.pg.com
http://www.gianteagle.com
ICOM Information & Communications http://www.i-com.com
Unicous Marketing Inc. http://www.paperlesscoupon.com