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    Digital Coupons Are on a Roll

    FSIs still dominate but times are changing

    By John Karolefski

    If Millennials had their way, all coupons would be digital and free-standing inserts would be remembered as paper discounts their parents used. That’s the current thinking of many analysts who keep track of America’s favorite promotion.

    Of course, we are a long way away from that reality as FSIs still dominate coupon distribution and redemption. But digital offers are on a roll, judging by the latest statistics as well as important developments this year.  

    In the first half of 2016, Kantar Media reported that the number of digital coupons grew by 23.4 percent. At the same time, the average face value of digital coupons issued for consumer packaged goods increased by 21.2 percent. More importantly, the number of mobile coupon users in the U.S. has grown nearly 18 percent in the past year to 92.6 million, according to eMarketer data; by the end of 2016, mobile coupon users are expected to increase another 11 percent to 104 million.

    Earlier this year, GS1 US and the Joint Industry Coupon Committee (JICC) announced a standard for paperless couponing. It helps retailers identify digital couponing transactions in a cash register transaction log, enabling settlement for retailers. This is important because the GS1 standard enables grocers and brand manufacturers to accept digital coupons with increased traceability at checkout. Trading partners now have enhanced traceability in the redemption of digital coupons at the POS, and grocers can reconcile their cash registers for paperless transactions more easily.

    “The new GS1 Standard is a step forward in addressing industry needs at a time when consumers are relying on their mobile devices more than ever to shop,” said Jeffrey Bumgarner, manager, industry affairs, Grocery Manufacturers Association. “Industry members and their app developer partners will be able to use the new standard as soon as the proper infrastructure in place at the end of this year.”

    In a more recent development, Samsung Pay enhanced its features to enable shoppers to search, save and redeem digital coupons at select retailers directly from the mobile wallet’s app. Its partner, Quotient Technology, announced that hundreds of manufacturer coupons from its extensive network are now available on Samsung's mobile payment solution. Quotient, whose main consumer property is Coupons.com, is a leading distributor of digital coupons. It powers its own properties in addition to websites and apps of several large grocery, drug, mass, dollar and club retailers.

    In the big picture of promotions, digital coupons may be the new kid on the block today. But kids grow up fast – just like Millennials. 

    By John Karolefski
    • About John Karolefski John Karolefski is a veteran business journalist with 25 years of experience covering CPG, retail and technology. Over the years, he has edited several trade publications and is the co-author of three books: "TARGET 2000: the Rising Tide of TechnoMarketing," "All about Sampling and Demonstrations," and "Consumer-Centric Category Management." He has appeared on CNN, CBS Radio and BBC Radio to discuss marketing issues. He can be reached at [email protected]

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