When con­sumers have decid­ed what they want to buy they often look for coupons or vouch­ers. Com­pa­nies that offer a coupons either direct­ly or via their affil­i­ates can often end up win­ning the sale. This post looks at how dig­i­tal vouch­ers are cross­ing the online/offline divide for the most every­day of pur­chas­es: gro­ceries.

A new L2 study high­lights an oppor­tu­ni­ty in the gro­ceries mar­ket around dig­i­tal coupons. Present­ly, dig­i­tal e‑commerce rep­re­sents just 3.3 per­cent of gro­cery, yet ana­lysts expect that share to rise to between 6.7 and 16.9 per­cent with­in the next decade.

Con­sumers today are con­duct­ing online research, and mak­ing the most of dig­i­tal pro­mo­tions to sup­port their reg­u­lar gro­cery shop­ping trips. As stat­ed in the report “dig­i­tal mar­ket­ing is already mak­ing an impact in the shop­ping aisles as shop­pers look for coupons online before and dur­ing their trip to the store[s]”.

The change in behav­ior has prompt­ed a rise in dig­i­tal brand pro­mo­tions with dig­i­tal coupons expe­ri­enc­ing a surge in pop­u­lar­i­ty.

The Rise of Digital Coupons

Accord­ing to L2 Insight’s Dig­i­tal Coupon Report:

• In 2013, dig­i­tal coupon redemp­tions topped 66 mil­lion, up 141 per­cent year on year.
• In addi­tion, dig­i­tal coupons aver­age redemp­tion rates of 14 per­cent, out­pac­ing print coupons that tal­ly rates of just 1 per­cent.
• In store, 90 per­cent of smart­phone shop­pers use their device in aisle, search­ing for recipes (37 per­cent), look­ing for coupons (24 per­cent), and research­ing nutri­tion­al infor­ma­tion (19 per­cent).

The val­ue of dig­i­tal coupon incen­tives to a reg­u­lar gro­cery shop has a great deal of val­ue in the con­text of new con­sumer pur­chase jour­neys. As stat­ed in the report, “recent sur­veys sug­gest mobile shop­pers spend upward of 15 hours a week research­ing prod­ucts or ser­vices on their smart­phones and are 4.8 times more like­ly to con­vert in-store than on their phones.”

Majority of Brands Still Underutilize Digital Coupons

How­ev­er, the major­i­ty of brands, and many of those who have been oper­at­ing in the gro­ceries mar­ket for sev­er­al decades, have yet to adjust their pro­grams and incen­tives with the grow­ing pop­u­lar­i­ty of dig­i­tal coupons. As the chart below illus­trates, most brands are still lack­ing in their dig­i­tal coupon dis­tri­b­u­tion. With the excep­tion of the case of Ama­zon, a major­i­ty of brands still aren’t pro­vid­ing coupons for use in lead­ing gro­cery out­lets such as Wal­mart and Tar­get.

Accord­ing to L2 Insight’s Dig­i­tal Coupon Report:

• While 36 per­cent of brands have coupon sec­tions on their brand sites, only 24 per­cent were offer­ing coupons dur­ing the research data col­lec­tion time peri­od.
• While e‑grocery play­ers Ama­zon and FreshDi­rect have ful­ly inte­grat­ed coupons into the online shop­ping process, the major­i­ty of brands rely on the con­sumer to print coupons at home for in-store redemp­tion.
• Only 24 per­cent of Food brands had coupons avail­able on their brand sites dur­ing our data col­lec­tion peri­od, even though 36 per­cent had a ded­i­cat­ed coupon sec­tion in the main site nav­i­ga­tion.
• Even when dig­i­tal coupons were avail­able, they were for print­ing and in-store redemp­tion, and brands failed to cap­i­tal­ize on social or email shar­ing. Just nine request­ed cus­tomer data in exchange for coupon access.
• Although 74 per­cent of female shop­pers report obtain­ing coupons from email pro­mo­tions, just 5 per­cent of brand­ed Food emails high­light­ed coupons.

Demand for Mobile Apps

L2 Insight’s Dig­i­tal Coupon report reveals that brands and e‑commerce gro­cery play­ers are under­serv­ing cus­tomer demands for dig­i­tal coupons. It has left a gap for coupon-ded­i­cat­ed mobile aggre­ga­tors and apps such as Coupon Queen, Gro­cery iQ, Cell­fire, and Shop­kick, which have stepped in to fill the void. Of a sam­ple sur­vey, 17 per­cent of con­sumers report­ed using a mobile app to man­age dig­i­tal offers.

Often over­looked as a mar­ket­ing strat­e­gy, the report presents com­pelling evi­dence that there is a great deal of demand for dig­i­tal coupons, and the chal­lenge for brands and e‑commerce com­pa­nies will be to pro­vide a stream­lined mobile, and user expe­ri­ence for con­sumers look­ing to take advan­tage of dig­i­tal offers and pro­mo­tions.

You can down­load L2 Insight’s full Dig­i­tal Coupon report here.

How is your busi­ness opti­miz­ing for the con­sumer look­ing for deals, coupons, vouch­ers, or codes before they buy? Let us know in the com­ments below.