A recent article in the Huffington Post (Sept 25, 2009) titled “Farewell to the Sunday Circular?” suggested that more an more Americans are choosing to go digital in regards to couponing.
From the Huffington Post article: “Now that our world has gone from print to digital and increasingly mobile, is the Sunday circular as relevant or as useful a tool as it was in the past? It is, but its margin is shrinking. A recent article in MediaPost reported on a Scarborough Research Report that Sunday newspapers still dominate, with 51% of households surveyed obtaining coupons there….”
So right off the bat, the article’s title is not really true at all. The circular (e.g., Sunday Newspaper) is still the #1 source of couponing information as reported in the article, so for you circular fans out there the weekly ads are not dead! However I don’t really think that was the point. Rather it was really about showing how digital coupons have a future and are growing. Hold that thought however as lets first further explore the majority chunk of the coupon market which is still all about paper.
For a more detailed look at the sources of coupons, let’s look at a new study of coupon usage and the sources of coupons by Scarborough Research (August 2009) which found that while print coupons still dominate, virtual coupons in the form of text messages and emails (e.g., digital coupons) are making slow gains as more US users transition to the convenient digital delivery for coupons.
Circulars / FSIs are still the top source for coupons
However a somewhat less optimistic study of the sources of coupons done by Burst Media in March of 2009 stated the following:
“The Internet has seen significant growth as the primary source of coupons – increasing from a 3.8% reading in 2002 to 16.0% today. The Sunday newspaper is still the primary source of coupons for 29.2% of respondents – but that is down from a 35.3% reading in 2002. Other media cited as a respondents’ primary source of coupons include in-store circulars (14.9%), mail packs/direct mail (13.5%), weekday newspapers (8.3%), in-store dispensers (5.4%) and magazines (2.2%).”
So back to the core point of the Huffington Post story which was all about how digital coupons are the future. A rebuttal point of view on how digital coupons are really not that important can be found in a recent New York Times coupon article (September 2009) which referenced that less than 0.5% of redeemed coupons are digital, even now, and digital coupon redemption has increased only 25% year-over-year, in a year in which overall coupon usage increased 23%. Currently average US household penetration of digital coupons is 8% which is nice, but the usage rate still is a bit low.
So a summary really is needed here. With some many sources of stats, it does make one’s head spin. The skinny is:
- Coupons are showing growth for the first time in a few years
- Newspaper distributed coupons still rule
- Digital coupons are the future, but its still a ways off
Just getting back into the swing of things from getting back from Vegas last week and have lots of interesting news to get out on the blog over the next few days. However in the mean time, here are some key insights that were shared at the Shop.org Annual Summit 2009 conference:
- By far the best online retailing show, both in the quality of sessions, # of retailers attending and supporting partner/vendor ecosystem.
First from the Chariman and CEO of Macy*s
- In regards to Macys.com + Bloomingdales.com, these two sites generate $1 billion in online sales, but an additional $5 billion+ in store sales influenced. (Macy*s total revenue is $24B for reference)
- A multi-channel Macy’s customer is worth…
- 2X more than just a store only customer
- 50% more (1.5 times more) to the stores than just a store only customer
- Macy’s has found that $1 spent online influenced $5.77 in additional store purchases within first 10 days (Dunhumby analysis)
- Sees over 3X conversion for those consumers that go into a product finder experience online
- Macy*s nationalized all operations back to NYC, but created 65 “zones” of local decisioning at the market level so as to still receive intel on the local level
- Has over 300,000 product reviews live on Macys.com
- The online and store sides of the business each have dedicated staff that both report to the same person (the CMO)
Forrester shared some stats such as:
- 22% average open rate for emails
- 0.4% click thru rate on social media ads
eBay has some of the best insights around eCommerce such as:
- eCommerce growing from its current 5% of offline sales all the way up to 15% to 20% of offline sales over the next 5+ years
- Forecasting that up to 40% of all online access will come from mobile devices within the next 2-3 years
- From the eBay iPhone app alone, this app has driven over $400 million in volume for eBay
- eBay has over 170 million items live at any point in time, with only 10% – 12% of these items being structured data
- Over 75% of eBay’s traffic comes from organic sources, but they do buy over 20 million keywords from Google for example
- The largest seller on eBay sells over $40 million worth of stuff
- Auctions at this point only account for 25% of all volume on eBay
Resources Interactive offered up:
- The US household on average is making less money: $50,303 in 2009 from $51,295 in 1998 (US Census)
- Folks are getting thrifty: Sales at Goodwill stores open at least a year ago rose 7.1% in the first three months of 2009 over the same period a year earlier
- ROBO shopping is a behavior that youngsters are learning: 69% of young people now research all purchases before they buy anything
- Deals are red hot: Coupon sites have been the 2nd most visited category on the Internet, behind job sites, for about a year (eMarketer May 2009)
- The concept of buying branded products for many digital moms is dead: According to TNS Retail Forward , about 42% of moms are buying store brands all the time
- ROBO shopping overall is the only way consumers are shopping now. Its not a trend its status quot: Some retailers are reporting up to 98% of in store shoppers report that they have already pre-shopped online before hand according to BIGResearch and Resources Interactive survey from August 2009
From a recent post, I have already established that the most sought after type of coupons are those from the Sunday newspaper / circulars. So this is a quick overview of how a retailer would go about posting these in-store focused coupons within the online circular site, the most logical place to expose such information. To begin, there are two main methods that retailers have gone about posting coupons online.
- Image based
- Adobe PDF based
Clipping coupons is a red hot trend in retail and is a very viable way of driving in-store sales that are measurable.
This post will focus in on the highly recommended approach of using PDF versions of coupons over the problematic image based solution. So let’s begin by examining the strengths and weaknesses of a PDF based couponing solution.
Strengths Of Using A PDF Driven Couponing Solutions:
- Best available readability so that data points such as the fine print / legal terms of a coupon can easily be read.
- By far and away, ensures the highest possible rate of in-store POS scanability. Since there are so many different combinations of end user printers and print settings, PDFs are the industry standard at achieving the highest level of consistency across the billions of potential printing options.
- Enables a user to actual download and save to their local machine a copy of the coupon PDF. Great for enabling sharing / re-posting of a coupon.
- Near universal support exists at this point in time of the Adobe PDF format. Having the free Adobe Acrobat reader installed on one’s machine is basically table stakes for using the Internet these days.
- Unlike some other online couponing solutions out there (um, Coupons.com), there is nothing additional to install to view and/or print the coupon (other than a PDF reader which nearly all users already have in place)
- Multiple coupons can be combined as a multi-page PDF document which can actual enable a user to browse and/or print all available coupons vs. having to print each individual coupon one at a time.
- All of the artwork and text is saved and viewed using vectors which enables insane levels of zooming in with zero degradation. This is how the great levels of scanability and readability are achieved.
Weaknesses Of Using A PDF Driven Couponing Solutions:
- There are very limited metrics available from the point where a user jumps off the SmartCircular site and into the downloaded Adobe PDF coupon. This means that ShopLocal can NOT track the number of coupons viewed, downloaded, shared (via email) or printed.
- No security or fraud protection controls. It’s pretty wide open unless the PDF that contains the coupon(s) make use of some of the built in Adobe security controls.
- No way to control the number of coupon downloads or prints. This type of solution is great for coupons that a retailer wants to allow to be spread, but not so great for the coupons that a retailer wants to limit the number of prints and/or downloads. This is where solutions like Zavers, Zing and Coupons.com come in as they have lots of controls to offer the manufacture and/or retailer. But by far and away, most coupons (like save $10 of your next $50 or more in-store purchase) that retailers put out are designed for and are hoping for maximum distribution. In this economy, what retailer doesn’t want to increase in-store foot traffic and/or purchases?
- No framing information can be inserted in and/or around the coupon image. This would include data points such as expiration dates, store address, retailer logo and/or branding. If this information is needed, it needs to be pre-inserted into the PDF coupon document (see PDF coupon examples below that illustrate this point).
Live examples are always best to prove a point. Here are some of SmartCircular retail clients that are using a PDF based couponing solution (with more on the way very shortly):
Here are some SmartCircular clients that are using an image based couponing solution:
Here are some examples of a PDF based coupons solution that are live across some of the SmartCircular sites:
Bon-Ton browse by circular view with some coupons showing up on the left hand side.
If a user was to click any of the three coupons that appeared in the circular page, then this simple PDF document would be immediately either opened or downloaded by the user.
For Macy*s, the user experience is very similar. From a circular page, a user sees the coupon image inline with the rest of the circular content.
From there, if the user chooses to click to view / download / print the coupon, a nicely formatted and branded PDF is opened.
Yet another example of essentially the same exact user experience of click to download / open / print a coupon from right within an online circular page view.
Here is the what the result of a user opening the PDF coupons would look like.
And here are some image based coupon solutions that are live within a few various client SmartCircular sites:
From either the circular page view....
...Or from a coupon aggregation page / layer....
In either case, both user interactions lead to an image based coupon that is presented on a very simple HTML page that includes a "print" button.
For Walgreens, a user can get to item level coupons from either a browse by circular page view...
...Or from an aggregated category results page that contains all coupon enabled offers.
Both lead a user to a dedicated item detail page that includes a button that enables a printable version of the coupon to appear.
If a user was to click the print this coupon, a large image-based coupon is displayed within a simple HTML page that includes a "PRINT" button.
It seems like the exception at this point, where I go through an entire day WITHOUT the mention of couponing in some form or another. It’s just that hot of a topic in the retail world. Whether its mobile couponing (like Coupious or Yowza or Cellfire or Coupon Sherpa) or digital paperless couponing (like Zavers or Zing) or print to redeem couponing (Coupons.com) or in-store shopping assistants (Modiv Media) or many, many others there is just so many choices.
With all of this buzz and the many possible manifestations that coupons are taking in the digital world, the ShopLocal team really found the below research from comScore particularly useful in trying to figure out which direction to go when offering guidance to our retailer clients. Basically if one believes that changing consumer behaviors is really hard if not impossible, or if it is possible takes a really long time, then inserting “clippable” or printable coupons withing the online weekly ad sites is the most natural fit. People are already doing this activity in the off line world, that transferring this activity should be a very natural fit (just as reading online newspaper ads / circulars has been a really great fit)
Note the leading response consumer gave in regards to the source of where they look to get coupons were the Sunday fliers (eg the weekly ads or circulars - all synonymous terms. This puts the SmartCircular sites that ShopLocal builds and hosts at the perfect sweet spot!
So aimed with this knowledge, Toys “R” Us is the latest retailer to begin to use it’s online “Sunday Flier” site as the consumer source for in-store promotional coupons as a tactic to drive increased in-store foot traffic and sales. As a nice fringe benefit, coupons do offer some level of web – to – store measurement.
So the ShopLocal team recently released a very simple and straight forward method of connecting the online circular content to a easily printed version of the coupons.
This is a circular browse page within the online Toys"R"Us weekly ad site. Note the coupon offer of "15% OFF" in the top left hand corner of the this back cover circular page.
Once a user clicks on the image of the coupon within the online SmartCircular site, the user's machine opens up a HiRes Adobe PDF version of the coupons that can easily be printed, saved and shared.
What in the world does:
- Store Coupons
- Local Inventory
- Store Events & Announcements
- Local Promotions
have in common? They are all all local store focused and represent the complete set of resources that would help any in-market shopper. Collectively over the last few months, the team here at ShopLocal has been doing a lot of thinking and discussing where the future of our business is headed. One of the most immediate conclusions is that we need diversify our business well beyond the current focus area of circulars and catalogs. There will be a day were no print circular is created and inserted into newspapers. This is not an immediate threat or doomsday scenario, but just prudent long-term preparedness.
So once the focus is off the circular, our team immediately turned to bring other great store focused sources of content to a more visible nature. Areas like store-level closeouts, coupons and in-store events are just a few examples. The point being, ShopLocal quickly is evolving to become a store focused, promotion based marketing tool, of which the weekly ad / circular content is just one source. This concept is what the team is calling a Shopper Planning Center (working name – still on the hunt for something better – maybe SmartDeals? Suggestions welcome…)
The goals of what a Shopper Planning Center can do for a retailer are:
- Deepen the amount of location specific content by bringing in promotional data from sources that have no current outlet of home on the internet (including retailer.com)
- Become more multi-channel in terms of offering items available for sale online
- Manage all of this increased volume of content by the use of data driven features such as site personalization, product recommendation and related products
- Do all of this so as to increase local, in-store conversions that are fueled by online research and activities
This is a list of some of the potential content / data sources that a retailer could easily load into the Shopper Planning Center.
So the team here at ShopLocal took this vision of a retailer store-centric deal center (or Shopper Planning Center) and came up with two initial visual manifestations.
Here is a Borders Books "Magic Shelf" inspired visualization that the team did for Kohl's of how many unique content sources can be well integrated into an engaging user experience / interface (Ux /Ui). This entire site would be built as a rich internet application (RIA) so that user could pan up, down, left and right to view the various result sets.
Here is a low fidelity wire frame that was done for Best Buy that does a great job of showing how store event content and eCommerce content and weekly ad content can be pulled together with personalization and localization.
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