By Annie Gasparro
Clipping coupons is becoming a thing of the past, as the
coronavirus pandemic accelerates a shift to digital deals.
With more people shopping online, redemptions of digital coupons
in the U.S. surpassed redemptions of paper coupons for the first
time during the second quarter, according to market-research firm
The shift is bringing a century-old couponing industry into the
present. Consumer-product companies and chains such as Dunkin'
Brands Inc. and Walgreens Boots Alliance Inc. are improving their
apps and rethinking marketing plans to accommodate more digital
deals. Companies say they expect consumers to stick with the
convenience of online shopping and digital deal-seeking after the
"Everybody, even my grandmother, is shopping for groceries
online now," said Luke Rauch, vice president of commercial strategy
Companies expect coupons to become even more important in the
coming months as unemployment remains high and concerns about the
health of the economy persist.
Digital-coupon redemptions at Walgreens are up about 80% over
the past year. In June, the company suspended its print circular
promoting weekly deals. Now it is only published online.
CVS Health Corp., known for foot-long receipts full of coupons,
said it made those deals available in the CVS Pharmacy app too, as
a result of a new function launched during the pandemic.
"We've needed to be nimble," said Michele Driscoll, vice
president of digital e-commerce and promotions at CVS.
Sheri Bush, a real-estate agent in Fresno, Calif., said she was
frustrated by how long it took for her coupons and receipt to print
while shopping at CVS recently. Ms. Bush said she prefers digital
coupons, like those from Ulta Beauty Inc., because they are more
convenient and are more often for products she wants. After she
bought hair spray there, she received a digital coupon for a
conditioner from the same brand.
"I bought it, and I freaking love it," Ms. Bush said.
That ability to target discounts to customers based on their
purchase history makes digital coupons a better investment than
paper ones broadly distributed to consumers based on their ZIP
Codes, brands and retailers said.
While paper inserts and circulars have to 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 Inc.
"You need to be able to do that in the pandemic," said Mr. Boal,
whose clients include Walgreens, CVS, Mondelez International Inc.
and Procter & Gamble Corp.
Coupons date to the late 19th century, when Coca-Cola Co.'s
founder, Asa Candler, began mailing handwritten tickets for a free
glass of soda, worth 5 cents at the time, to consumers who lived
near pharmacies that he supplied with syrup.
For decades, leaflets inserted in newspapers were the most-used
coupons. Digital coupons gained popularity over the past decade
with the rise of smartphones. People clip these coupons virtually,
by selecting them in an app or on their computer, which applies
them to their next purchase. In 2019, 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% from the paper varieties.
J.M. Smucker Co., maker of jams, Jif peanut butter, Folgers
coffee and other products, is increasing its digital-marketing
budget by 20% this year. Bel Brands USA Inc., which owns Babybel
and the Laughing Cow cheeses, had planned to hand out print coupons
at running races and other events and free samples in stores this
year. Instead, the cheese maker is sending offers online for free
samples and other discounts. The Laughing Cow increased its digital
coupon spend by 75% this year.
"We were already trending toward more digital, but Covid[-19] by
far accelerated it," said Johnni Rodgers, the Laughing Cow USA's
Dunkin' has been issuing digital coupons for a free doughnut or
new menu items like its Dunkin' Refreshers about one day a week to
draw back customers since the pandemic began. Before the virus
decimated restaurant sales, 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 send them more deals to encourage them to buy
more, said Stephanie Meltzer-Paul, senior vice president of digital
marketing at Dunkin' U.S.
"If our franchisees put a flier in a local circular," she said,
"there is no way to follow up."
Write to Annie Gasparro at email@example.com
(END) Dow Jones Newswires
August 29, 2020 08:14 ET (12:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.