Retail deals with its circular problem
With digital coupons continuing to underwhelm and newspaper readership shrinking, retail continues to have a circular problem.
A Wall Street Journal article last week chronicled the many challenges facing digital advertising, including the ineffectiveness of banner ads and the fact that search ads only work when shoppers have specific targets. E-mailed coupons often wind up in junk folders.
Wanderful Media, which operates digital circulars for 400 newspapers and runs the Find&Save mobile app, told the Journal that fewer than one percent of consumers who read newspapers online click through to digital circulars embedded in the website while 80 percent of newspaper readers look at the circulars inside.
A survey last September from the Newspaper Association of America found that 70 percent of people usually check newspaper inserts to find out about sales, with 48 percent agreeing it was "easier to browse through ad inserts that interest me than to search through the Internet for the same information."
The challenge is that newspaper readership continues to erode. In many markets, digital advertising doesn’t make up for the loss of local fliers when a local newspaper shuts down.
Mobile apps — either with circulars from individual retailers or aggregate coupon sites such as coupons.com — could potentially replace print circulars and possibly enhance the experience with location-based technologies.
According to a survey of 11,000 mobile users last year from mobile shopping app, Retale, and location-based analytics company, Placed, 74 percent of respondents reported having looked at a circular in the last 30 days. Of those who did, 49 percent viewed a circular on a mobile app and 56 percent viewed it on a website.
About half (53 percent) had downloaded a mobile app for a specific retailer while over 31 percent accessed digital circulars using a mobile app that aggregates the weekly ads of multiple retailers, with a whopping 79 percent of those who use mobile aggregators citing "convenience" as the basis for this preference.
Still, some lukewarm answers came from the roughly half who hadn’t used a digital circular.
"Circulars are like crack," Corey Elliot, the director of research for Borrell Associates, a market research firm, told the Journal. "It’s hard for retailers to walk away from them, because they are ingrained in how people shop."
- Retailers Can’t Shake the Circular Habit – The Wall Street Journal (sub. required)
- Newspaper Inserts Still Have Their Perks – eMarketer
- Retailers Can’t Shake the Circular Habit – Newspaper Association of America
- Traditional Marketing-Friendly Format Enjoying Second Life In Digital Media – Placed
How long will it take for digital circulars to sufficiently replace newspaper circulars? What are the more and less obvious barriers inhibiting shoppers from shifting from newspaper to digital circulars?