Retail TouchPoints: Kroger Partners with AOL to Tap Paperless Coupons into Loyalty Program
Through a special arrangement, what follows is an excerpt of a current article from the Retail TouchPoints website, presented here for discussion.
Kroger is targeting internet-savvy consumers with a new paperless coupon program from AOL. Shoppers can visit www.shortcuts.com to set up an account using the store loyalty card they use at any of Kroger's banners. Then they search the Shortcuts online coupon service by brand, product, or category, and click on grocery coupons they want to add to their card. Customers can then redeem those coupons at checkout in the store.
Customers who still shop with paper coupons can print out a list of "clicked" coupons to redeem at the grocery store. Registered users can review savings on their receipt and online, and also choose to receive e-mail alerts detailing the value of coupons remaining on their loyalty card and other data.
"Younger consumers (under 35) don't tend to respond to coupons very well," said Matthew Tilley, director of marketing at CMS, a promotions management solution provider. "Ninety percent of CPG coupons are made available in newspapers, which they're not reading. So if you're trying to reach a consumer audience with a coupon, you're going to have a lot more luck if you're using a cell phone or internet based coupon."
Kroger also is partnering with Procter & Gamble, Clorox, Del Monte, General Mills, and Kimberly Clark to offer coupons via mobile phone through Cellfire, a mobile application that has issued more than five million coupons since 2005.
Proponents of paperless coupons claim they offer convenience for consumers and a means for retailers to reach their target population easily and build loyalty. They also receive kudos for reducing overall paper consumption.
"I believe in five to 10 years, there will be no paper coupons," said Doron Levy, president of Captus Business Consulting. Levy anticipates that vendors and manufacturers will work e-pons into individual chains' loyalty program and each user's card will have the discount programmed onto their account.
"This can be an excellent vehicle to showcase new products and increase sales of existing lines," Mr. Levy says of Shortcuts. "As people turn to the web for shopping and product information, vendors can use this to literally close the sale in cyberspace by offering a discount or freebie to the customer via the individual loyalty or points card."
Discussion Questions: What do you think of the AOL/Kroger online coupon service program? What do you think of the pros and cons of such e-pon programs versus coupon clipping? What will this mean for newspaper circulars?