We live and shop in an age where apps and websites are designed to improve the way we shop, including reducing the use of paper circulars and coupons we use to save money. To that end, I am amazed as to how many new smartphone apps are now available, most designed to deliver many of the same tangible benefits of the past, but now in a more flexible and consumable fashion. But despite the obvious advantages of both cost efficiency (of eliminating paper) and consumer ergonomics (of not having to clip and carry coupons), the adaption rate of digital coupons, while increasing each day, still represents less than 3% of all coupons redeemed.
Further, adaption rates of shopping apps are also growing, but look around the store the next time you shop for groceries and count the number of shoppers using their phones to either shop or pay. You may grow old trying to find one. So if “digital” is so wonderful, so flexible, so efficient, why do we not see more digital use?
In my mind, one of the key deterrents of digital coupon adaption lies in one of its inherent advantages. It’s INVISIBLE! Yes, without the muss and fuss of clipping coupons, load-to-account, digital offers are “clipped” electronically, placing them in the shopper’s account, requiring the shopper only to identify themselves at the store through a card or account number and purchase the said item related to the offer. Pretty simple. But brands are still balking at the efficacy of digital coupons, all the while taking advantage of the targeting flexibility and perhaps more importantly, the ability of “capping” the markdown expense by simply “deactivating” the offer once a threshold of coupons have been either redeemed or “digitally clipped”. The fact of the matter is that brands very much like the “advertising equity” that paper coupons and paper circular placements provide, elements that digital coupons do not typically offer.
No one should criticize the brands their right to cap their exposure vis-a-vis digital coupons, at least until more data is available that yields the response history needed for reasonable comfort in letting the digital coupon run until a pre-determined expiration date is reached. But ultimately it will be important to eliminate these caps in favor of a prescribed expiration date, if digital coupons are to reach critical mass.
Accordingly, what we have today are digital offers that “float” invisibly and out of the stream of consciousness of the consumer, coupled with the possibility that the deal could “vaporize” at any moment, at the discretion of the brand making the offer.
So it would seem to me that if we could retain all the benefits of “invisibility”, but yet provide more tangible reminders and evidence of digital offers, we just might see the engagement rates of digital offers increase significantly.
Enter the retailer. While the fate of digital coupons is widely thought to be in the hands of the brands that create the vast majority of the offers, it is the retailer who can provide the single most salutary support mechanism, namely in-store offer recognition. This “recognition” may manifest in various forms. It could be an app that senses where you are in the store, or a targeted SMS text message, a printed shopping list loaded at the retailers website or at an in-store kiosk, or a number of other new “at the shelf” message venues. But more often than not, this recognition will be a good ol’ sign. That’s right, a shelf sign (or tag) that is sufficiently intrusive to break out of the clutter of thousands of messages thrown at the shopper each time they venture in a retail store.
Realizing that targeted offers cannot be signed with item and price as they are often directed to subset of shoppers, support signage can come in the form of general information about the ability to receive offers by signing up for the program. However, it is important that a digital specific price and item program anchor the digital program. This can be accomplished by the retailer offering and showcasing each week an array of digital deals that either are stand alone offers and even more effective, bolster existing traditional offers as a “digital bonus”. Other more overt options for digital offers are waiting to be created.
Like all things retail, digital coupons must compete with the many other cost containment programs the retailer offers. If digital content remains largely invisible and “behind the scenes”, the odds are that the program will never reach a significant amount of shoppers. In obscurity, digital content will never be in position to truly change the retailer’s connection to the shopper, a connection that the shopper is looking for, and will find at a competing retailer if necessary.