EXPERT ANALYSIS
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SECTION TWO
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Enormous Potential for Personalized Digital Coupons
Digital coupons are a small part of overall coupon distribution and redemption. But growth continues. One
area that retailers and manufacturers are increasingly interested in is personalized digital coupons. Such
offers reach the right shopper with the right message at the right time.
DISCUSSION QUESTION:
What is the potential for personalized digital coupons based on each customer’s shopper habits and loaded on a retailer’s app or a website?
EXPERT ANALYSIS:
The potential is tremendous. The effectiveness of personalized, targeted offers is already being leveraged by forward-thinking retailers who are employing advanced predictive analytics to put digital offers in front of shoppers that align with their expressed interests and preferences.
Some see mass personalization at the individual level as a challenge, but shoppers are “speaking” to retailers at the register as well as through their online behavior. Each time they make a purchase, download content or clip a coupon they are providing actionable insight as to their current state as well as their future intent.
By using advanced prediction tools to match online engagement metrics with purchases made throughout the store, retailers can effectively engage with individual shoppers at scale. Leveraging store-wide data enables retailers to anticipate needs, deliver immediate consumer benefit - through relevant offers and content - and drive loyalty.
Coupons that are personalized and pushed to the shopper are garnering higher redemption rates than those offers acquired via the website. Some retailers are seeing targeted offers - delivered by email - redeeming at a rate 50 percent greater than other digital coupons.
John Ross, CMO of Inmar and President of Inmar Analytics
The potential for personalized digital coupons is massive and companies like Catalina, 84.51 and Prologic are already working on this. How these coupons are presented to the consumer is an entirely different story. Digital coupons are currently too much work and don’t have enough value. Print coupons are easier to use, but don’t appeal to the next generation of 80 million shoppers (Millennials). Something has got to connect those dots. And while I believe that card-linked offers will be a key driver of this, I cannot say that it will be the only. There are a lot of smart people in this industry and we’re all aware of this need. Linkable is one of the first in the market with a solution and our pilot with Supervalu is going incredibly well. Time will tell, but personalization, automatic or invisible redemption; always-available and fully digital are changing how CPG brands and retailers provide value to their consumers. And it’s happening today.
John Caron, Chief Marketing Officer, Linkable Networks
Personalized offers have great potential and are a reality for retailers who control the presentation/distribution of offers to their customers. If retailers rely on aggregators to source and distribute the content via the grocery website/apps, personalization will be less likely since the aggregators are incentivized by volume versus targeting which requires the tech and time investment to get 1-1 marketing right. Digital coupons can benefit from personalization just like any other form of digital content, but grocers simply need to get more advanced digitally before they will see the benefits of investing in personalization across various consumer touch points.
Jonathan Treiber, CEO and Co-Founder, RevTrax
The potential benefit for personalized offers can be very valuable to the shopper, and even more so for the retailer. However, one of the many values that a coupon serves is the discovery of new products. What if a shopper never purchased pet food before, but suddenly adopts a pet? A shopper’s path is never a straight line, and can take many detours as they navigate their lives.
Darcy Douglas Director, Account Solutions, Kantar Media Marx
The nirvana for CPG and grocery marketers is reaching the right person at the right time with the right message. If a shopper already has a grocery retailer’s app, that retailer can deliver relevant coupons directly to their smartphones through a push notification. The beauty of push notifications is that they can be highly personalized because retailers can segment the recipients by gender, age group, what they’ve purchased before and how frequently they make a purchase. They can also be timed for the utmost relevance. For instance, a grocer could send a coupon for frozen family meals to women ages 30 - 40 on a Monday night when they might not have time to cook, or a coupon for a 12-pack of beer to men ages 20 - 30 on a Friday afternoon. Similarly they can be timed around special events or holidays, such as coupons for Mexican food sent around Cinco de Mayo or chocolates on Valentine’s Day.
Shoppers enjoy receiving pertinent, valuable and well timed coupons, and it draws them into the store where they typically make additional purchases. Another big payoff for retailers using personalized push notifications to deliver coupons is that it draws their customers back into their app, so they can build even more app engagement and loyalty, which is a constant aim. Studies show push notifications can increase engagement and retention by 40 percent.
Because push notifications are very personal by nature, it’s important to not misuse or overuse them. A good rule of thumb is to ensure they’re targeted, relevant, not too frequent and valuable.
Aaron Glazer, CEO, Taplytics
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