Saturday, February 23, 2013

Digital Coupons? That's Not The Future.

"Safeway Envisions Future Without Print Ads."

That headline really jumped off the screen when glossing over the most recent AdAge, triggering a "well no duh" reaction.  So much so that I almost didn't bother reading it...almost.

It's not exactly a bold prediction to say the world will enjoy less paper products in the future.  However, what isn't so certain is where does a brand go from here?  How can it use this technological leap to its advantage?

Perhaps the greatest advantage in shifting away from print to online is the ability to tailor the discounts to the customers' preferences.  In the aforementioned AdAge article, Safeway executives discuss the success their having the "Just For U" program.  This online loyalty program offers personalized deals and digital coupons.  Furthermore, I typically shop at Kroger and every so often will receive a pack a coupons in the mail for lots of the things I buy most along with stuff they want me to try.  Yet, to my misfortune, I often lose them or just plain forget about them, finding them in a drawer months after they expire.  

The problem is that the coupon is the brainchild of different era.  Thus, thinking about the future around the idea of coupons, trying to fit them into a different age, is extremely limiting when designing potentially more effective marketing programs.  This type of closed-circuit reasoning is why newspapers didn't invent Twitter or blogs.      

If Kroger can track my purchases and mail me coupons, what's preventing them from surprising me with "coupon discounts" at the register when I buy the items determined to please me.  Simplify it: nothing to print, to cut out or remember to bring to the store.    

The quite but massively-important added benefit of this program is the surprise factor.  If a store surprises you with a discount, the odds you'll talk about it increase.  But when shoppers buy with traditional coupons, discounts are expected.  Therefore, customers are less likely to discuss the purchase or repeat it without another coupon.  When the element of surprise is added, the customer views the discount as a bonus.

This vision isn't that far-fetched.  If you're one of the 10 million people in Panera Bread's loyalty program, then you already know this.      

Why doesn't the supermarket industry implement a similar loyalty program?  My guess their looking still looking for the coupon of the 21st century.

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