INITIATIVE 3:Personalize Coupons

Carol Angrisani

As mass coupon redemption rates continue to slide, a growing number of retailers are shifting focus to offers that are relevant to individual shoppers.

Price Chopper, Ukrop's and Green Hills Farms are among those providing customized offers.

Price Chopper and Ukrop's shoppers can scan their loyalty card at the start of each shopping trip at in-store kiosks to receive personalized coupons and information. The offers are customized for each shopper based on past purchasing behavior.

Green Hills, of Syracuse, N.Y., is finding success with SmartShop, a technology that provides customized savings based on individual buying habits. Members can access a personalized shopping list via email, a dedicated Green Hills Web page or a SmartShop kiosk. Averaging about $1, savings are electronically delivered into the shopper's transaction when she makes a qualifying purchase.

About 6,500 shoppers — representing 60% of the retailer's sales and transactions — participate, according to Chief Executive Officer Gary Hawkins. “This is a way to give shoppers offers that are relevant just to them,” he said. “They're getting savings on products that they like to buy.”

Hawkins said the initiative is having positive results, with participants spending 7% more now than they did prior to SmartShop. Enrolled customers are also making 7% more shopping visits now.

Such efforts come at a time when mass coupon redemption is declining. In 2006, more than 286 billion coupons were distributed — a 12% drop from 2005 — but just 2.6 billion were redeemed, a 13% decrease from 2005, reported promotion services provider CMS.

“About 1% of regular coupons are redeemed, but we're getting a 20% redemption rate on SmartShop offers,” Hawkins said.

In many cases, Green Hills drives higher unit movement by putting a product in the SmartShop program rather than by making a temporary price reduction.

The retailer hopes to expand the program by delivering other types of offers, such as recipes and new-item announcements.

Along with personalization, retailers are changing their coupon practices in other ways. Kroger and Giant Eagle, for instance, have launched programs that electronically load discounts directly onto loyalty cards. Kroger has teamed with Procter & Gamble for “eSaver,” an online version of P&G's BrandSaver coupon insert. Available via a link on Kroger.com, eSaver allows Kroger customers to load P&G offers onto their Kroger Plus cards. Under a similar program, Giant Eagle just kicked off “e-Offers,” which loads offers from multiple manufacturers directly onto Giant Eagle loyalty cards.