2010.02 | Scan those Coupons!

Given the Great Recession, one hears a great deal about coupons to encourage shoppers to buy.  Coupons have been around for quite some time, but are still surprisingly low tech in Canada.  While grocer specific coupons and offers are scanned, manufacturer driven coupons are generally accepted as part of a manual process in Canada.   This is an area ripe for automation to the benefit of retailer and consumer alike for the following reasons:

  • Cost Savings – Given that 84% of households in Canada used coupons in 2008 one would expect significant manual effort in gathering the coupons, validating the manufacturer, and tracking down the reimbursements.  With the constant attempt to reduce cost and employee effort, this represents real potential savings to a retailer.  If this effort is not completed, the retailer is providing customers discounts for certain brands out of their own pockets.
  • Throughput – While clerks still need to check expiry dates and validate the product purchased (why isn’t that automated via a central database?) scanning removes the need for at least 5-6 keystrokes per coupon – saving valuable minutes to the checkout process.  More people get through the checkout faster, and fewer people are embarassed by pulling out their coupons or frustrated by those who do so in front of them in the queue.
  • Customer Convenience – Self service solutions like kiosks or self-checkout are rendered less beneficial if coupons require manual entry.  Keying in coupon amounts represents an operation too complex for self service, (not to mention a fraud risk) reducing the amount of customers that will use it.  For those that attempt it without knowing coupons are manual, the transaction will be slowed by attendant intervention and will discourage the use of self service.  This all adds up to customer frustration which can reduce sales.
  • Fraud Reduction – While it is not possible to completely eliminate fraud, the increasing use of GS1 Databar codes may help, and if the codes don’t work on the scanner, it is easier for a clerk to refuse the coupon – minimizing potential losses.
  • Redemption Tracking – Knowing one’s customers becomes increasingly important in competitive times.  Understanding coupon redemption will enhance market basket analysis.  Enabling vendors to get an accurate, timely view of how consumers respond to an offer is extremely valuable, and can also allow for quicker response to coupon problems as data will be available to understand behaviour electronically.

While marketers, vendors and retailers are certainly on top of providing coupons via electronic means – email, web, mobile – there are few to date that are leveraging around electronic coupons: via 2d barcodes, NFC, or redemeed automatically at the checkout via a loyalty card.  While the individual values are small, coupons are important to a value conscious shopper, and the collective impact of coupon automation could be significant, so breaking the code is key.

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