Do digital coupons discriminate against those who can least afford it?

Discussion
Photo: Getty Images/FG Trade
Nov 23, 2022

Public interests groups are taking aim at digital couponing, saying that the practice is discriminatory insofar as the less tech-savvy consequently pay more.

A letter to the supermarket industry signed by a number of public interest groups alleges that low income shoppers and seniors, demographics that statistically have less access to and a lower level of comfort with technology, are being unfairly restricted from accessing in-store digital-only deals, Consumer World reports.

The letter’s criticisms pertain specifically to those discounts which are advertised in-store on shelves, signage or circulars, but which require customers to digitally redeem them with a loyalty program account. Customers who are able to utilize the deals receive significant discounts while less tech-savvy shoppers miss out.

The letter cites Pew Research estimating that 25 percent of seniors do not use the internet and 39 percent do not have smartphones. It further states that 43 percent of low income households have no broadband internet access.

The criticism of the digital couponing practice comes as a Moody’s Analytics study finds that American households are spending $445 more per month this year on the same grocery items they bought in 2021, according to a KSDK report.

Controversial as it may be, the practice of offering app-based digital coupons is producing growth for retailers.

BJ’s Wholesale Club has experienced a 43 percent growth in digitally-enabled sales since its implementation of coupons that can be digitally “clipped” and redeemed via app, according to PYMNTS. And in a survey cited, 74 percent of 300 major retailers saw a significant risk that customers would switch to another retailer if they did not provide digital coupons.

Developments over the past few years have shown that those retailers who make technology user-friendly for less wired, older demographic groups tend to benefit.

Walgreens, for instance, developed its app with more easily navigable menus, auto-login and other special features that has made it popular with customers 55 and older, a demographic that generally has a lower rate of technological adoption.

DISCUSSION QUESTIONS: Do you think it is accurate to say that digital coupons discriminate against some demographics? What should retailers do to make sure populations without tech access can still get advertised discounts, and do they have an obligation to do so?

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"Retailers have no obligation to accommodate less tech-savvy consumers but those who offer inclusive, omnichannel deals will earn sales and loyalty."

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33 Comments on "Do digital coupons discriminate against those who can least afford it?"


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Bob Amster
BrainTrust

Controversial topic. The words “discriminate” and “obligated” immediately lead the witness (So Mr. Smith, “Do you beat your wife often?”). There is an assumption here that retailers are obligated and are discriminating. They are not, they either are not astute enough to realize that there’s more gold in “them there hills,” or they have determined to pursue a certain demographic, but that is not called discrimination if the actions of the retailer are not designed to specifically leave out a demographic group. Be careful with how we phrase these questions. Words matter!

Neil Saunders
BrainTrust

The discrimination is not intentional, but it is clearly an issue for those who do no have access to technology. Perhaps ensuring that there are physical alternatives, especially on shelf-edge deals, will help. All that said, the number of retail flyers we get stuffed into our mailbox every day suggests that traditional coupons are still very much alive and well.

Bob Amster
BrainTrust

If some retailers do not address these voids, don’t they do so at their own peril (lost sales)?

storewanderer
Guest
16 days 8 hours ago

Note that there are no digital coupons or digital offers over at Walmart. Why do you think such a large customer segment is happy and comfortable to shop there at Walmart?

Dave Bruno
BrainTrust

Oh boy. This is a very difficult issue for me. On one hand, the human in me wants to find ways to ensure that the people without access to tech have access to the same deals as the tech-enabled. On the other hand, the marketer in me understands the meaningful value of marketing to specific customer segments, including tech-enabled shoppers. Engaging shoppers through digital offers often yields benefits that are meaningful and long-lasting. I don’t believe retailers have an obligation to make every offer available to every customer, but I do think there is ample room for a combination of offers that give those with technology opportunities to save in other ways. There are certainly myriad ways to create meaningful segments of those without tech and to develop marketing strategies that serve both those shopper segments as well as the business. These programs can co-exist with digital marketing programs that target different, tech-enabled segments.

Shep Hyken
BrainTrust

Coupons are coupons, whether they are physical in a hard-copy printed publication, mailed to a home, or digital (on a website, email, etc.). Most retailers are trying to attract as many people as possible. Using digital platforms for coupons is just another channel. They are reaching customers wherever they can. Retailers mail, advertise, text, email, post on their websites, and more to reach as many customers as possible. This isn’t discrimination. It’s being where the retailer thinks they can be seen by the largest number of their current and potential customers.

Ron Margulis
BrainTrust

First off, I take issue with the assertion the people over 55 are “a demographic that generally has a lower rate of technological adoption.” Maybe 70+, but those of us at the tail end of being Baby Boomers are pretty damn good at all of this computer stuff.

On digital coupons and potential discrimination, it’s a store personnel training issue above all else. There is absolutely no reason any shopper shouldn’t be able to rely on the staff for help with either showing how to download and use the app if the customer has a smartphone or use the retailer’s system to provide the coupon. Yes, the staff is busy and there is a labor shortage, but if the retailer can’t support the marketing program for all then it shouldn’t offer it for any.

Gene Detroyer
BrainTrust

Ron, should I take exception to “Maybe 70+” ? 🙂

Steve Montgomery
BrainTrust

Ron I also take issue with the assertion about people over 55 and their rate of technical adoption. I was born in the earliest years of Boomer classification as were many of my friends. None seem to have any issues — all have computers and smartphones and use them daily.

Georganne Bender
BrainTrust

Totally agree, Rob! Claiming that people over 55 are “a demographic that generally has a lower rate of technological adoption” is ridiculous. Gen X is 55, the youngest Baby Boomers are 58, who thinks they can’t use technology? It’s laughable, really.

Richard Hernandez
BrainTrust

I don’t know if I would call it discrimination. Yes more tech-savvy consumers are apt to use the technology but, as an example, I saw an associate in a major grocery store helping a customer who was not really tech-savvy teaching the customer how to access the digital coupons on their phone. The help is there if you ask.

Lisa Goller
BrainTrust

Overlooking analog shoppers is more of a consequence of shifting to a digital economy than intentional discrimination.

Retailers have no obligation to accommodate less tech-savvy consumers but those who offer inclusive, omnichannel deals will earn sales and loyalty.

Bob Phibbs
BrainTrust

I doubt the findings that 25 percent of seniors don’t use the internet. They might answer that but use their phone’s wireless. They are on social media, use email, etc. And where does the other study get consumers paying $445 more in groceries per month than last year? Inflation is running about 11 percent YOY. If you didn’t read the newspaper in the ’50s you didn’t get the deals either. Nothing here. Move along.

Gene Detroyer
BrainTrust

I fully agree. Nothing here. Move along.

Dave Wendland
BrainTrust

As the entire industry moves toward electronic couponing (the new 8112 [Universal Digital Coupon] format is certainly the future), sensitivity to those without access to technology must be considered. The best short-term solution is to offer a paper version in addition to the electronic — but I foresee the days of printed coupons fading in the future. Tech access is improving every day.

Georganne Bender
BrainTrust

There are many consumers who don’t have access to digital anything. And not just because they don’t have computers or cellphones, older consumers have a hard time seeing and navigating technology. This doesn’t mean they shouldn’t be able to get the deals everyone else can. An easy fix is having coupons available in-store.

I receive fliers almost daily. Yesterday, a 3” stack of Black Friday circulars, loaded with coupons, filled the mailbox. I’d say print is still alive and well.

Scott Norris
Guest

My company stopped printing and mailing catalogs even before the pandemic to rely 100 percent on our website/email/social feed – did our direct-to-consumer sales drop? Yes, absolutely. How did that compare to the production and distribution cost of those catalogs? The cost savings offset was easily 10x the revenue decline. We probably weren’t breaking even on print mailings since the early 2010s. Our only ongoing complaints come from our Amish customers — but they are going to local libraries or neighbors to order.

Georganne Bender
BrainTrust

Makes sense! I am starting to receive more and more catalogs. What’s up with that?

Gene Detroyer
BrainTrust

Just today, we received four more catalogs. They didn’t even make it past the recycle bin.

Paula Rosenblum
BrainTrust

Definitely a tricky question. We passed the ADA Act so anyone could get in and out of a store. But last I checked, signage isn’t in braille, and what about those who can’t read at all? And how many people really don’t have access to tech at all?

It has been famously quoted that there are more mobile phones in India than toothbrushes.

I don’t think it’s any more accurate to call this “discrimination” than anything else that could be perceived as exclusionary, and as someone who doesn’t really do coupons, unless I’m buying online (then I’ll search for promo code sites) I’m probably not so qualified to say. I suppose I would say “put signage in the store” — but I’m not sure how you drive traffic for those without digital access. If it’s TV commercials, then signage will suffice.

Gene Detroyer
BrainTrust

I am a little bit at a loss as to what to say as my 75-year-old fingers type my response. Are the retailers saying these demographic groups don’t deserve coupons? I doubt that.

Retailers use the tools that give them the best return. They are not trying to eliminate anyone, just maximize their marketing dollar.

Indeed, if there were a unique and efficient way to reach these folks, the retailers would do it. I suspect these public interest groups are running out of things to say.

David Spear
BrainTrust

Retailers are not intentionally trying to discriminate against any single demographic. They are simply leveraging technology to reach individuals on different channels. Every retailer’s marketing strategies are a bit different and some are better at leveraging tech programs than others. As far as seniors, my mother-in-law is 87 and she is more tech-savvy than most 40 year olds.

Steve Montgomery
BrainTrust

By focusing on those customers who are members of their loyalty programs retailers are following Willy Sutton’s reasoning about why he robbed banks – “Because that is where the money is.” The same logic about being unfairly restricted could be applied to those who don’t get newspapers because that is where the ads are and how in many areas the circulars are distributed.

Joel Rubinson
BrainTrust

With 90 percent ownership levels of internet enabled phones, it’s hard to believe there is much exclusion here. However a retailer should be willing to accommodate a consumer who walks up to the courtesy counter and says they have no access to digital coupons. Though I would be vehemently opposed to under-serving the great majority of Americans just to bring offerings down to some lowest common denominator.