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.