2G Digital Coupons Get Personal
There are patterns in digital
innovation. The first video game was OXO. It was tic-tac-toe, faithfully reproduced
on screen. The first computer-generated animal was a photo-realistic owl in
the movie Labyrinth. The first digital publications were internet likenesses
of newspapers. All stayed close to the originals.
Then, something happened.
Programmers mastered the nuances of digital and unleashed bold breakthroughs.
In video games, this yielded Kinect, where you are the controller. In CGI,
we have the Na’vi, sapient humanoids as real
as anything else on film. In publishing, we have immersive iPad periodicals
such as Project and The
The first generation of digital recreates the original. The second
generation creates something new.
Consider digital coupons, which are essentially
a digital translation of paper coupons. After digitally clipping, shoppers
print and carry them into a store just like they came from an FSI.
the promise of digital couponing? Yes, initially. But translating a coupon
from paper to digital is a first generation development. In the second generation
marketers will move to personalization.
It all starts with the consumer. So,
what will shoppers expect from personalization?
Firstly, they’ll expect offers
to be available across all digital channels. That is, by messaging and transacting
by email, website, mobile, and loyalty card. Kudos to the grocer that sent
tailored offers via email. But shoppers on-the-go who don’t view offers
in their inboxes want to access the very same content from their smart phone
Shoppers will count on personalization by brand. In most retail channels,
consumers are more loyal to their favorite products than their store. But this
loyalty varies by individual preferences and category dynamics as well as brand
strength. Individual behavior tells us how brand-loyal they are. Shoppers in
aggregate tell us how brand-dependent categories are. Both are parts of the
Consumers will expect personalization by category. No beer for those
who abstain from alcohol. No infant formula for households that have graduated
from diapers and baby food. But this isn’t merely de-selection of unpurchased
items or blind repetition of past purchases. Shoppers want to be delighted
with new ideas. Savvy retailers will apply correlations between wine and craft
beer, stage-three baby food and cereal, or locally sourced jam and bakery items.
will value personalization that considers purchase cycles. They will appreciate
frequent offers for their favorite salad kits, but not window cleaner. Understanding
shoppers means noticing the cadence of commonly bought items and serving discounts
as shoppers are about to come back in market.
Picture a Gillette Mach 3 loyal
user. He won’t respond to a Schick offer.
He won’t respond after he just bought a five-pack of Mach 3 blades. But
when that fifth blade dulls, he may respond to a new Gillette Fusion Proglide
upsell offer. Give him a digital offer for a new product under his brand when
he’s ready and you’ve personalized.
The first generation of digital
recreates, the second creates. We are witnessing the second generation of digital
couponing today through personalization. And with developments like load-to-card
and load-to-mobile, we’re sparing
paper and trees. The Na’vi would be proud of us.
What do you expect from the next generation of digital coupons? What will they need to do to be of greater value to consumers, retailers and brand marketers?