JUNE 2008

COUPONS

Research Study Tracks Behavior of Online Printers

P&G and Ahold Call for Action on New Barcode

Internet Coupon Best Practices Introduced for CPG Marketers

Ridley's Food & Drug to Implement Electronic Coupon Clearing

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Research Study Tracks
Behavior of Online Printers

By Jack Grant

Who prints online coupons on their home computer? Is there already a critical mass to justify all of the hoopla for this growing form of electronic offers?

These users tend to be younger, have larger households, and are wealthier and better educated than clippers of newspaper FSIs and the general population. Eight of ten of these online consumers are more likely to print a coupon if it is relevant to their reading content.

That is just part of the emerging picture of today’s online coupon printer that came from an online coupon study conducted by Coupons, Inc. The survey results were integrated with national consumer data from Simmons Market Research Bureau to provide a broader perspective on changing trends in usage and how online coupon users compare with the general population. 

Results were presented by Francis Garcia, vice president of marketing solutions for Coupons, Inc., at the annual Industry Coupon Conference recently in Miami. The event was hosted by the Association of Coupon Professionals (ACP).

The data from Simmons presents favorable demographics for online coupons whose usage now accounts for 22.4% of coupon market penetration. One of three (36%) of online coupon printers has children under the age of 18 in their household. Nearly half (47%) of online coupon printers are between 22 and 44 years old – a whopping 28% more than newspaper FSI clippers. And the former are 40% less likely than newspaper FSI clippers to be over 60
years old.  

Online couponing is reaching larger and wealthier households: 61.2% have household incomes of $60,000 or more, compared with 56.6% for newspaper clippers and 52.6% for the U.S. adult population.

The behavior of the online coupon printer is encouraging for promoters of this tactic. Here are more key takeaways:

  • The value of the offer greatly affects a consumer’s willingness to provide information. For a $1 coupon, more than half of online coupon printers were willing to give their email address and demographic data. For a $2 coupon, nearly two-thirds were willing to give anything from email address to postal address.
  • Most (43%) of printable coupons are obtained at general savings sites like Coupons.com. Manufacturer’s promotion site is second (31.9%), followed closely by manufacturer’s brand website and retailer sites (31% and 30.8% respectively).
  • More than three of four (77%) say the value of the coupon affects their willingness to provide personal information.
  • Over half of online coupon printers are more likely to click on an ad banner or open an e-mail if it is enabled with a coupon.

Exhibiting Wares
The best in coupon technology and services was on display at the Industry Coupon Conference hosted by the Association of Coupon Professionals (ACP) recently in Miami. Among the exhibitors were:

Pinpoint Data is a leading expert on barcoding and family code management for the promotions industry. Its suite of online tools includes CouponChek  Barcode Verification, ProductChek  Barcode Verification, the Family Code Manager, Product Data Dispatcher and the Barcode Wizard (www.pinpoint-data.com).

Symbology presented its GS1 DataBar Coupon Codes and Coupon Validator service,  means for trading parts to check data accuracy. The company provides clients with bar code products and services such as digital bar code files and verification/inspection equipment and systems (www.symbology.com).

Ecrio offers real-time communication and mobile commerce software for mobile phones. Its MoBeam technolgoy uses a light source on a small keychain-based device to originate the long-and-short sequencing of a standard boacode. A standard laser scanner interprets those light beams as it would the reflection of a printed barcode (www.ecriio.com).

NCL Graphic Specialities provides manufactuers with a one-stop source of promotional packaging and printing needs. Included are on-pack booklets, instant redeemablecouons, inpack coupons, neckhangers, film overwrapping, and games and sweepstakes (www.nclgs.com).

New ACP Board of Directors
The new Board of Directors of the Association of Coupon Professionals (ACP) consists of a mix of CPG manufacturers, retailers and vendors.

They include: Jackie Broberg (General Mills), Joanne Walk (Hormel Foods Corporation), Len Harris (Kellogg Company), Mike Sonsthagen (Kimberly-Clark), Bob Pettis (Pepsico Foods and Beverage), Mary Ann Pindulic (Unilever), Lois Van Klompenberg (Spartan Stores), Dan Abraham (Brand Coupon Network), Pam Samaniego (Catalina Marketing), Jane Michels
(Coupons, Inc.), Dadi Akhavan (E-centives), Debbie Settle
(Inmar), Val Stark (NCL Graphics), John Irwin (Promotion Eyes), Ron Fischer (Redemption Processing Representatives), and
Earl Ellsworth (Universal Marketing Services).

Awards with Impact
The Association of Coupon Professionals (ACP) gave its Industry Impact Awards to Dadi Akhavan, president of E-centives, and
Mike Sonsthagen of Kimberly-Clark.

The awards recognize outstanding contributions to the association and couponing. They were handed out at ACP’s Industry Coupon Conference in Miami recently.


P&G and Ahold Call for
Action on New Barcode

By Jack Grant

Executives from Procter & Gamble and Ahold USA have called for late-comers in the CPG industry to get on board with the new GS1 DataBar on coupons. The latest phase of the sweeping initiative began January 1 of this year when some manufacturers began issuing coupons with an interim barcode on them.

Don King, associate director, retail marketing services, The Procter & Gamble Company, and Alan Williams, vice president, applications development, Ahold Information Services, Ahold USA, Inc., asked for help from both trading partners: from manufacturers who have not implemented the interim barcode yet, and from retailers who self-maintain their own POS software or use providers other than Fujitsu, IBM,NCR, Retalix or Sweda. The latter is for the trade to get their systems ready can scan the GS1 DataBar.

“Coupon changes are here and more changes are coming,” said King. “The format allows for us to be much more precise in coding complex offers.”

The executives jointly presented an update on the new barcode at the annual Industry Coupon Conference hosted by the Association for Coupon Professionals (ACP) in Miami recently. They were joined by Steve Arens, senior director of industry development at GS1 US, and Bety Lou Vontsolos, vice president of operations at CMS.

The implementation of the new system is spread out over two years with manufacturers taking the first step of printing the new data bar alongside the original U.P.C.-A bar code on their coupons. Changes to the face of coupons began January 1 of this year. The U.P.C.-A bar code will be fully retired in 2010 when all retailers will begin scanning the GS1 DataBar. 

The guidelines are the result of a five-year coupon reengineering project by the Joint Industry Coupon Committee (JICC) and GS1 US (formerly the Uniform Code Council) that oversees electronic commerce standards. The project also received input from the Association of Coupon Professionals (ACP). The guidelines offer solutions to challenges encountered by manufacturers and retailers with the current system, which dates to 1985.

To get a sense of the readiness of retailers for the new barcode, GS1 US is conducting a survey. Arens, who presented preliminary results, said the results were “directional” because the survey is ongoing. While the respondents do not represent a scientific sample, they included grocery (large and small retailers), drug, mass and other channels.

Here are the results so far:

  • Eight of ten (82%) of retailers are aware of the plans to replace the UPC-A and the GS1-128 barcodes on coupons with the GS1 DataBar.
  • Three of four retailers (75%) said their front-end systems are not ready to scan  the GS1 DataBar.
  • Nearly nine of ten (87%) retailers said their systems will be ready for the DataBar on coupons by January 2010, the date when then new barcode will be on coupons by itself.
  • Nearly six of ten retailers (57%) plan to enhance their coupon validation process.     

The help the industry transition to the new barcode, GS1 US has published a report called the “North American Coupon Application Guideline Using GS1 DataBar (RSS) Expanded Symbols.” It is available to qualified recipients.  

Meanwhile, Williams said POS solution providers collaborated on
the review and approval of a “GS1 DataBar POS Implementation Guide.” He acknowledged the help of Pinpoint Data in coordinating the guide whose purpose is to ensure a consistent customer experience redeeming coupons across all accepting retailers. Fujitsu, IBM, NCR, Retalix and Sweda have taken part in this review early this year. The guide is designed as a resource and reference for POS coupon logic development and testing. It will be to all qualified recipients.

According to Williams, most retailers will not receive GS1 DataBar coupon-ready software from their POS providers until early 2009. Because every POS implementation is unique and critical, most retailers will conduct an exhaustive regression test of new capability which takes a lot of time.

It is unlikely, he added, that many retailers will be ready much before January 2010 “with a version of software that will be ready to interpret the DataBar coupon.” It is likely that some retailers will not be ready during the phase-in time of January to June of that year. Those are the retailers that the industry need to reach, he stressed.

“We’re continuing to work with manufacturers and retailers” on the transition to the GS1 Data,” said Vontsolos of CMS.

Meanwhile, coupon processors are doing their part in the changeover. They have educated trading partners, updated their processing systems for the GS1 DataBar, and worked with other processors on one-count file updates and company prefix challenges. Currently, they are processing interim coupons and continuing to education manufacturers and retailers.


MAY 2008

Internet Coupon Best Practices
Introduced for CPG Marketers

By Jack Grant

Want to issue more effective online coupons? Or perhaps you want to start offering them to consumers, but don’t know how to begin?  

Practical advice on getting started or refining an established program is contained in “Smarter Internet Coupons: 10 Best Practices Guide for CPG Marketers,” published by E-centives, a leader in print-controlled Internet coupons and interactive promotions.

The new Guide empowers consumer packaged goods (CPG) marketers with Best Practices to use throughout the marketing lifecycle — from awareness and trial, to loyalty and retention,
to relationship building — to ensure their online coupon
programs succeed.

The Internet coupon industry today consists of established companies with the technical expertise and marketing savvy to be
a trusted advisor to CPGs. Meanwhile, the marketplace is primed with growing consumer interest in alternatives to traditional
paper coupons.    

“The whole idea behind Internet coupons is not to duplicate Sunday newspaper FSIs online,” said Dadi Akhavan, president, CMO and co-founder of E-centives in Bethesda. Md.  “The Web provides many more opportunities that better integrate into the brand experience online and allows marketers to use coupons in more effective ways 
throughout the marketing lifecycle.”  

To download a copy of the Guide, please visit:
www.e-centives.com/bestpracticesguide.

Here is a preview of key topics covered in the Best Practices Guide:

  • Statistics on Internet coupon usage among consumers
  • Strengths and weaknesses of the different types of Internet coupons available
  • A review of the latest Internet coupon technologies that enable advanced security controls, enhanced integration and distribution, redemption tracking and behavioral measurements
  • Examples of Internet coupon executions that meet a range of marketing goals such as awareness, retention, multi-channel, engagement, etc.
  • Tips for effective program measurement, user experience, relationship-building and partnering with the right vendor.

“Internet coupons can provide marketers with unprecedented insights into how consumers interact with promotions, and what factors lead to coupon redemption,” said Kathy Bayer Belli, senior marketing manager for E-centives. “But in order to take advantage of these opportunities, marketers must do more than just ‘put coupons online’ for any coupon seeker to use.”

The Guide reveals how marketers who use the latest Internet coupon technologies such as advanced security controls, well-integrated distribution capabilities and granular measurement position themselves to make the greatest gains. 


Market Watch
Ridley’s Food & Drug to Implement
Electronic Coupon Clearing

By Jack Grant

Ridley’s Food & Drug will implement a unique Electronic Coupon Clearing (ECC) solution in its 15 supermarkets in Wyoming and Idaho. The first store will be equipped in Wyoming in May. A 30-day test there will be followed by a roll-out to the remaining 14 stores in June.

The Jerome, Idaho-based chain will deploy the Front Line Validation and Redemption Software from ScanAps. The program aims to improve operating efficiencies for retailers significantly and provide “complete proof of purchase” long sought by CPG manufacturers

“The system is designed and proven to ease coupon processing while eliminating 100% of vendor bill-backs and identifying potential fraud. Electronic Coupon Clearing streamlines the checkout process while ensuring payback on all redeemed coupons,” said Vijay Chetty, president of ScanAps, at the annual Industry Coupon Conference hosted by the Association of Coupon Professionals (ACP) in Miami. 

Los Angeles-based ScanAps also provides TIPS (Targeted Individual Promotion Software) that creates an electronic coupon bank for each shopper to facilitate delivery of variable targeted coupons based on shopper profiles and seamless redemption at POS, in addition to ECC, the multi-tiered real-time coupon validation and redemption software.

ECC provides the fastest exchange of redemption information to manufacturers and payment to retailers. Most of the charge-backs, adjustments and invoice deductions that occur in the traditional and one-count processes are eliminated.   

Under ECC, there is no need to send coupons to Mexico, thereby eliminating shipping, postage, insurance, customs, invoice and related charges. The new system will provide accurate and reliable coupon redemption data in virtually real time to all interested parties. It will also eliminate a lot of middlemen handling charge backs, adjustments, and deductions for retailers and manufacturers. Of course, the cost of coupon clearing will be significantly reduced for both retailers and manufacturers. Additionally, the reduction in coupon fraud and mis-redemptions will save an estimated $300 to $500 million per year for retailers and manufacturers.

“This unique program will allow Ridley’s to significantly improve their operating efficiencies, save labor time and cost of processing coupons, give them the ability to fight bill backs, charge backs and adjustments and is a powerful loss prevention tool,” said Chetty.

“We are seeking CPG manufacturers to evaluate the program implemented at Ridley’s and hopefully participate in ECC,” he added.

More information is available at www.ScanAps.com.

CouponFIT Debuts
Coupons, Inc., provider of printable coupon marketing and technology solutions, has introduced its CouponFIT suite of family code management services for manufacturers and retailers. Leveraging a comprehensive database of family code data and an experienced family code management team led by industry veteran Jane Michels, the solution aims to make coupon programs more efficient and manageable while ensuring accuracy at the point-
of-sale.

The CouponFIT suite is designed to help coupon issuers maintain the highest degrees of accuracy by managing items and family codes online and in one central location. It was designed specifically to reduce problems at checkout for retailers. The CouponFIT suite of services includes two new offerings: CouponFIT Analyzer and CouponFIT Advisor.

Time for Coupons
In hard times, consumers reduce their spending, but – provided discounts –  they will continue to buy. In fact, more than half (54%) of adults would reduce discretionary spending, and six of ten (63%% would not make a purchase if a deal isn’t available, according to a Harris Interactive survey.

Nearly nine of ten (86%) of adults surveyed used coupons or discount codes while shopping. But as a recession looms, consumers may re-evaluate their spending, tighten budgets, and look for deals more often. More than one in three adults (37%) say they would increase the use of coupons and discount codes during a recession. Among women, the figure is higher: four of ten (43%) say they would do so, vs. three of ten (31%) of men.
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