Coupons Go Digital

Retailers are trashing paper coupons in favor of technology.

September 03, 2020

ALEXANDRIA, Va.—Clipping coupons—once a common way to reduce household expenses—is becoming an anachronism, as the pandemic accelerates a shift to digital deals for saving money, reports the Wall Street Journal.

Because more people are shopping online, redemption of digital coupons in the U.S. surpassed redemption of paper coupons for the first time during the second quarter, according to Inmar Intelligence, a market research firm.

Consumer-product companies and chains, such as Dunkin’ Brands and Walgreens, are improving their apps, rethinking marketing plans and distributing more digital offers. Companies say they expect consumers to stick with the convenience of online shopping and digital deals after the pandemic passes.

“Everybody, even my grandmother, is shopping for groceries online now,” said Luke Rauch, vice president of commercial strategy, Walgreens.

Digital-coupon redemptions at Walgreens are up about 80% over the past year. In June, the company stopped printing a “weekly deals” circular. Now it is only available online. CVS has made special deals available in the CVS Pharmacy app. Coupons are expected to become even more important in the coming months due to high unemployment rates.

Today’s technology allows retailers to target discounts to customers based on their purchase history, making digital coupons more effective than paper coupons that are broadly distributed to consumers based on their ZIP codes.

And while paper coupons and circulars must be planned months in advance, “digital coupons you can pull on and off in a day,” said Steven Boal, founder of digital marketing and analytics company Quotient Technology. “You need to be able to do that in the pandemic.”

Last year, 23% of coupon redemptions were digital, and 31% were from paper inserts, according to Inmar. This July, the balance had shifted to 31% of coupons being redeemed digitally and 26% being paper.

To attract customers back into stores during the pandemic, Dunkin’ has been issuing digital coupons for a free doughnut or new menu item about one day a week since the pandemic began. Prior to the pandemic, the company used digital offers once or twice a quarter. After people download its app to get a discount, “Dunkin’ can see if they return and can send them more offers to encourage them to buy more,” said Stephanie Meltzer-Paul, senior vice president of digital marketing, Dunkin’ U.S. “If our franchisees put a flier in a local circular, there is no way to follow up.”

For more on digital coupons, read “Promo Partners” in the August 2019 issue of NACS Magazine.