Don't Discount Circulars Just Yet: How Coupons Are Staying Alive in the Digital Age

As brick-and-mortar stores adapt to the rise in e-grocery, many grocers wonder: what will become of the age-old tradition of clipping coupons from the newspaper?

Will it die off in favor of online discounts, or does the paper circular have a fighting chance?

The particulars of coupon-clipping are changing, but that doesn't mean digital is completely replacing physical. In fact, just as customers have demonstrated a preference for both brick-and-mortar and online shopping, so too have they shown they want both paper and digital coupons.

Emerging technology in e-grocery has allowed for innovation and variety in how retailers can offer discounts. Here are some examples of how customers today save money:

1. Store apps.

In 2016 we began seeing the rise of digital coupon services integrated into grocers’ eCommerce and eCircular programs. Instead of searching for coupons on other areas of the website, shoppers could access coupons on the product page itself. By integrating digital coupons into their store interface, Lowe's was able to offer its customers a more seamless shopping – and saving – experience.

Target’s Cartwheel App

Target’s Cartwheel App

Today, 40% of large-format grocery stores use online coupons, and many grocers (including Target, Publix, Whole Foods, Meijer, and Kroger) have taken the integrated approach. Target's app, Cartwheel, even displays manufacturers' digital coupons, which gives shoppers more opportunities to save, since manufacturers frequently offer bigger discounts than stores.

These trends are part of a bigger wave toward segment-of-one personalization and an increasingly friction-less buying experience. Customers are getting more and more used to convenience, which means that for many, searching for coupons separately is too time-consuming. Using data intelligence and integrated technology, grocers are rising to the challenge by providing digital coupons right in the shopper's (online) cart.

2. Cashback apps.

Cashback apps are the "mail-in rebates" of today, without the hassle of actually mailing anything. Using apps like Checkout 51 and SavingStar, shoppers can get money back on certain products by using their smartphone to upload their receipt or scan the item's bar code. Money is sent to the customer via Paypal or by check.

A variation on the cashback app is the browser extension app, such as Honey, which users can download and install on their device. When the user is making an online purchase, the app will automatically search for coupon codes and enter them in at checkout. This requires zero manual research or price comparison, making it a popular choice for frequent online shoppers. Through Honey, you can also earn "Honey Gold," gold and referral credits, which you can redeem for gift cards – another incentive to download the app.

3. Aggregate sites, apps, and digital circulars.

There really is an app for everything, and finding the lowest price for your breakfast cereal is no exception. Apps like Southern Savers allow customers to search for a certain item, compare prices in area stores, and access coupon codes from across the internet. Southern Savers' website has a tab devoted to grocery stores such as Harris Teeter's, Lidl, Publix, and Whole Foods; click on any of these stores, and you'll be taken to that store's Weekly Ad and/or Extra Deals page.

Similar sites such as BeFrugal.com also offer weekly ads, personal accounts that will apply coupons to your purchase at checkout, and even printable coupons that you can take to the store.

4. Last but not least, paper coupons and circulars.

Even with all the latest developments in grocery technology, paper coupons are still going strong.  

Channels Consumers Use to Find Coupons

Channels Consumers Use to Find Coupons

A 2018 report by consumer insight and consulting service Retail Feedback Group, surveying 1,200 people who had been to a grocery store in the past month, found that shoppers still look to printed circulars for deals. In fact, more than 50% of respondents choose printed over digital media.

Similarly, an eMarketer study reported that in-home circulars were the top choice for respondents (51%), with clipped coupons (34%) and digital coupons (29%) coming in at second and third. (Other choices were in-store circulars, digital circulars, in-store promotions, and loyalty program offers. Lowest on the list, with 9 of respondents, were social media specials.)

According to PYMNTS.com, "nearly 90 percent of millennials actually use paper coupons that come through the mail, and response rates to consumer mailings are up 60 percent from 10 years ago, according to direct mail marketer Valassis."

While developing technology is certainly transforming how people shop, the data shows that customers aren't jumping ship on traditional circulars just yet. "People still seem to take comfort in the familiarity of circulars and finding their weekly coupons all in one place," writes Corey McNair in eMarketer Retailer. While this may surprise some, it fits with a greater trend: that what customers want is a seamless omnichannel experience, which means choice. They want to be able shop in-store, order for home delivery, and buy online for curbside pick-up . They want discounts online, and at home.

As customers' behaviors change in response to emerging technology, it is crucial for grocers to adapt in ways that will meet (and exceed) their customers' needs and expectations. To learn more about how locai can partner with your grocery business to offer turn-key eCommerce solutions, click here.