Archive for May 26, 2012

The Trouble with “Triple Coupons”

Many supermarket retailers could help me write this piece, as they have already (or should I say finally) discovered that offering shoppers the opportunity to cherry pick the store with coupon items causes more problems than the sales and traffic count these promotions create.  There are multiple reasons that such promotions have become increasingly ineffective, unless your goal is to drive a very short-term blast of unprofitable sales.

First and foremost, “triples”  appeal to the most cost-concious, price sensitive shoppers in the marketplace.  Most are already shopping predominantly at Aldi, Walmart, and even dollar stores for most of the grocery needs.  These folks are “students of cost containment”.  They have earned their Bachelor’s Degree in Savings  and are working on their MBA of Promotional Sciences.  In short, they know far more about how to manipulate the retailer  for  super-savings than the retailer could even hope to know about converting this group to loyal profitable shoppers.

Secondly, “Triples” and other traditional promotions do not lend themselves to becoming a proprietary, “ownable” promotion.  Any one can do it and negate any competitive advantage that such programs may yield.

Conversely, fuel programs and other such continuity/ points programs create a special currency that can be claimed as the retailer’s proprietary savings offering.  A clear example of such is the current doubling and tripling of fuel rewards points for those chains that have well developed fuel rewards programs.  The perceived value of such programs also many times exceed the expense of the program, particularly compared to triple coupon promotions.

Finally, there is little or no measurable lasting loyalty effect from triples and others promos like it.  The shopper segment attracted to these promotions will not return and do full basket, profitable shopping with the retailer unless they are heavily invented to do so.  In addition, FSI coupons tend to focus on a few center store and HBC categories….not really conducive to building loyal full basket shoppers.

Let’s face it.  The game has clearly changed.  This extended recessionary economy has fostered a new breed of shopper.  Couple this mentality with the great new technology and applications that enhance the tool box of those that shop predominantly for savings and the result is the shopper is now armed and dangerous.

“Price Shoppers” will never become your best and loyal shoppers (unless you happen to be a $400 billion chain headquartered in Bentonville, AK.)   While it is not a bad idea to reach out to this group  for incremental gains of their “share of wallet”, do it in such a way they play the game according to your rules,  rules that appeal and reward your best shoppers over a longer period of time and involve many departments and categories.