29 June 2021

Smart Coupons – Mobile and More

Working with the leading FMCG manufacturers and brands across Europe, a question we are regularly asked is can I distribute a coupon to my target shoppers’ mobile phones, securely. Distributing coupon barcodes digitally has been possible for a number of years, the constraining factor for mobile coupons is the integration of retailer ePOS systems to enable secure redemption so that a coupon can only be used once.

There are many benefits for the retailer, including reduced time at till, increased fraud prevention, improved cashflow, plus traffic to store funded by brands. As we work with leading retailers across Europe to make that a reality we’ve been testing multiple models in different environments to learn about the impact of mobile coupons, including shopper behaviour, impact to the brand, and attitudes of retailers.

In Italy we have launched a network of connected retailers where consumers can visit the website of the retailer to discover promotions from brands and clip them to their retailer loyalty card for paperless redemption. In the first 6 months 53 FMCG manufacturers published 163 promotions, with a total potential saving of Eur450k based on discount and limits defined by the manufacturer. In this instance we’ve seen ~18% redemption rate from clip to redemption, but the interaction with the coupon has value beyond redemption. Users clipped coupons that could have saved them Eur12.62, but redeemed savings of Eur5.68, meaning the brands get engagement that doesn’t always cost them the discount and the retailer can demonstrate to their customers a greater potential saving.

In Spain consumers can visit the websites of many of the leading manufacturers, including P&G, Nestle, Danone and Henkel – as well as visiting affiliates that host offers from many manufacturers, such as valesycupones.es – and choose to redeem those direct from their mobile in connected retailers, or to print those and redeem in any retailer nationwide. In 2020 there was a 48% increase in the number of digitally distributed promotions in the market, with a 43% growth in the use of mobile coupons (despite not being able to use them in all supermarkets.

In the UK we launched a pilot in the convenience sector – SmartCoupons.co.uk – together with our partners at In-Touch Group. The Valassis platform includes promotions from the leading brands (mostly redeemable today as paper coupons in the UK). I-TG are specialists in the UK convenience sector and are integrated with many of the ePOS houses, receiving the full basket data, and having close working relationships with many of the store owners. We worked together to integrate our promotions platform with their network of stores, to test the impact of coupons across a localised test of 21 stores in the Peterborough region. We evaluated a range of factors to note the impact on redemptions and sales, including the impact of different promotion types and media channels on engagement.

Key results:

  • Coupons get products on shelf – there was a 28% increase in stocking the products on offer in the period during test versus prior period. Because the retailer knew the brands were promoting discounts they bought more of those products to capture the opportunity
  • Coupons drive sales uplift – the promoted products sold +77% more units versus period prior, 24% more than control stores
  • Coupons drive better sales – the promoted products saw an increase in sales value of +82% versus the prior period and +30% versus control stores in the same period
  • Mobile coupon conversion was very high – 79% of coupons that people clipped to use were redeemed. This may be as a result of heavy instore promotion which captures shoppers at the moment of desire with fewer opportunities to drop off before completing the transaction
  • Instore media drives sales – adverts in nearby social media drove effective engagement, but advertising in store drove greatest conversion to sale
  • Promo specific communications works – we tested advertising driving to the wallet and those promoting a specific product. The latter drove higher engagement and conversion to sale

We learnt some useful lessons to improve future experiences for all parties:

  • Shopper education is required on the use of QR codes – some shoppers were not clear that a QR code on advertising could take them to a webpage to get the coupons. Store staff had to help and instruct some of them
  • Store staff training is essential – we observed different levels of engagement in the data between stores which correlated to the engagement of colleagues in those stores. It’s important to ensure that staff can inform shoppers about the available promotions and to support them in redeeming them with a smooth customer journey
  • Don’t overestimate in store technology – despite selecting a set of pilot stores where IT-G have close and active relationships we learned through the early testing that not all scanners could read a 2D barcode (QR code) at the ePOS. The learning, keep it simple
  • Know your GTINs – a crucial benefit of ePOS integration and secure mobile coupons is that they can only be used against valid products, not across all products in a brand for example. The brand must ensure that the full list of valid product codes (GTINs) are up to date and available to avoid awkward shopper experiences where the product presented at till appears valid, but isn’t on the list of valid products.

The team at IT-G are expanding the footprint amongst the convenience stores, whilst Valassis work with supermarkets and other national retailers across our European markets to make mobile coupons feasible.
As retailers connect and secure mobile coupons become a market wide reality we expect to learn and evolve in line with shopper behaviour. One thing is clear, shoppers want the choice and coupons, in all formats, continue to drive value to shoppers, brands and retailers alike.