Clicking Vs. Clipping

With shoppers of all income levels increasingly on the lookout for savings, at least one grocer is busy testing new applications of “virtual coupons,” to see if customers bite. The Kroger Co., based in Cincinnati, recently launched two separate initiatives with several leading CPG firms and two technology vendors – Shortcuts and Cellfire – to offer its loyalty cardholders special deals via the Internet and their cell phones.

While Kroger and Cellfire have kept rather mum on their experiment involving cell phones, which was set to launch sometime in the spring, Ken Fenyo, Kroger’s VP of corporate loyalty, offers this explanation for the grocer’s deal with Shortcuts: “We’re always looking for new and innovative ways to buildcustomer loyalty, and saw the Shortcuts program as another way of helping us to do so. Shoppers are spending more time online and are always looking for ways to save money and save time.”

Indeed, analysts note that more and more retailers are looking for ways to connect with their shoppers – and this is just the next generation in a series of more personalised marketing Strategies.

In addition, the latest versions of e-coupons may be more appealing, as they don’t require printing. “The new e-coupons are moving away from requiring printing, which should help with the risk of fraud,” notes Mike Griswold, retail research director at Boston-based AMR Research. Recent research suggests that customers are open to the idea of clicking vs. clipping for savings. A survey conducted by Toronto-based ICOM Information & Communications in February found that 58 percent of respondents see their coupon use increasing if they have the ability to download a coupon from the Internet and have it automatically connected to an electronically swiped frequent shopper card.

Of course, coupon usage in general – whether electronic or paper – traditionally peaks during slowereconomic times, studies have shown. (The chart below from ICOM breaks down consumers’ coupon usage during a recession.)

Shortcuts, a Dulles, Va.-based service of AOL, launched the newtechnology with Kroger and its banners earlier this year. Any Kroger loyalty cardholder with Internet access can use the service (AOL membership isn’t required). General Mills, Kimberly-Clark, and Kraft were the first CPG partners in the launch, and Shortcuts says it’s actively seeking new manufacturing – and retail – partners.

“Our plan is to have anywhere from 75 to 100 offers from various companies available by the end of the year,” says Sharon Baker, executive director of Shortcuts. “We want to expand into a national footprint.”

With the Shortcuts program, Kroger shoppers 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. When they go to the store, they scan their loyalty card at checkout, and the coupons are automatically applied to their Purchases.

Shortcuts accommodates shoppers who rely on paper coupons, too, by allowing them to print out a sorted list of “clicked” coupons to take to the grocery store. The values featured on Shortcuts’ site are similar to what consumers would find in the Sunday paper, notes Baker. As with traditional circulars, retailers may also choose to include offers on their private label Products.

As players like Shortcuts and Cellfire experiment with digital coupons, other companies are looking toward more personalised marketing solutions as the next big thing. Concept Shopping, a Lisle, Ill.-based firm that works with the legacy Albertsons stores now owned by Minneapolis- based Supervalu, maintains that loyalty card holders seem most impressed with customised offers that are personally selected based on their shopping history.