CLICKING COUPONS

JULIE GALLAGHER

Brick-and-mortar retailers are incentivizing customers to surf the net before they peruse the aisles.

Printable coupons and price comparison tools are among the shopping aids retailers offer to build brand equity and solidify customer loyalty.

Chains like Wild Oats Markets, Albertsons and Pathmark are using email newsletters to lure shoppers to these value-added services.

“Although only between 40% and 50% of supermarkets have an email marketing program in place, the segment is way above average when it comes to sending out welcome letters and follow-up communications,” said Bill McCloskey, chief executive officer of New York-based Email Data Source, which monitors 18,000 email marketing campaigns.

He noted that about 70% of members of all retail channels drop the ball when it comes to sending out regular email communications, while close to 100% of supermarkets use their customers' email information regularly.

“We've found that the biggest spike in traffic to a retailer's website comes directly after an email communication is sent out,” McCloskey explained. “Just before that happens, you'll see almost no traffic to their site.”

Subsequent to the distribution of Wild Oats' Wild Mail email newsletter — referred to by McCloskey as “a work of art” — its site experiences a significant lift in traffic.

The Boulder, Colo.-based retailer rewards subscribers with printable coupons good for both national-brand and private-label discounts.

“We use online coupons to provide a service to our customers and our vendors,” said Annie Angelo, online marketing manager for Wild Oats. “Vendors have the opportunity to feature their products directly with Wild Oats customers and provide an extra incentive for them to try their products.”

The retailer also distributes coupons to promote store-brand items. Earlier this month, Wild Oats offered a coupon for $1 off any 10-ounce (or larger) bag of Wild Oats, Green Mountain or Newman's Own brand coffee.

“Coupons are only available through Wild Mail because we wanted to give customers a special thank you for subscribing to the newsletter,” Angelo said. “These coupons are typically tied in with editorial content or timed to be appropriate with customer interests. For example, during November we're featuring coupons from different baking companies as well as a cleansing coupon to tie in with a live chat event on the topic.”

Wild Oats used to offer access to these coupons to all website visitors but has since changed its strategy.

“We can better control and limit distribution of these coupons through email,” Angelo said. “The link from the email is directed to a page on our website that is only accessible through the newsletter.”

Distributors of electronic coupons can use other methods to limit the number of coupons printed by consumers, explained Steven Boal, chief executive officer of Mountainview, Calif.-based Coupons Inc., a coupon marketing service and technology solutions provider.

“If a manufacturer says ‘I only want 250,000 coupons printed and no more’, we can do that for them,” Boal said. “They might also say ‘I only want consumers to be able to print two of a particular coupon from any single computer’, or ‘I want to limit coupons based on geography.’”

Although Wild Oats spokeswoman Krista Coleman conceded that online coupon redemption rates are modest, McCloskey noted that specials are more effective than supermarkets' editorial features when it comes to driving Web traffic.

Boal related that the online coupon redemption rates that Coupons Inc. tracks average about 17%.

Boise, Idaho-based Albertsons' newsletter also features links to coupons and weekly advertisements. The chain's strategy is different from Wild Oats' in that manufacturer coupons and weekly ad circulars can be accessed by all of its site's visitors.

A link brings shoppers to a third-party Web page that's managed and controlled by New York-based online coupon provider Smart Source. Before entering the coupon site, Albertsons lets customers know that they're about to access third party content not controlled by the retailer. Smart Source introduces itself to visitors with a message saying it's the company that stocks grocery stores with the red coupon dispensers.

Earlier this month, Albertsons shoppers were given the opportunity to save up to $76.45 on 62 offers featured on the Smart Source site. They ranged from savings of $5 on any Schiff Move Free Advanced Joint Care Formula to a free eight-day sample of Digestive Advantage Irritable Bowel Syndrome capsules.

Pathmark, Carteret, N.J., also allows its site's searchers to access free samples as well as coupons good for $30 worth of savings on Stonyfield Farm's natural and organic dairy products.

Shoppers are required to provide their email information before they can download the coupons. Additional personal information is collected from seekers of samples for products like Bigelow Tea and Sunsilk hair products.

Pathmark's online coupon offering is currently limited to deals from a single manufacturer. In the future, online coupon features that leverage shopping information, gleaned from loyalty card data, will allow for a much higher level of personalization.

“It's too early to expect that type of sophistication but those who can integrate that kind of personalization will be highly successful,” McCloskey said.

Ukrop's Super Markets, Richmond, Va., will begin presenting consumers who log onto its site with the online coupons that are most relevant to them, explained Andy Robinson, CEO, Minneapolis-based Grocery Shopping Network. He said that the feature will be up and running within the next few weeks. Ukrop's declined SN's request for comment.

In addition to Ukrop's, GSN's software is used by 500 supermarkets, Robinson said. Many of them enable their customers to build shopping lists as they review sales information about specific products.

“Upon logging in to a [GSN-enabled] supermarket's site, shoppers will see the 12 items from their retailer's print circular that are most relevant to them,” Robinson explained. “The objective of our offering is to make life easier for consumers so they can create their shopping list and get on with life in 10 minutes or less.”

When GSN's software is loaded with a retailer's inventory information, shoppers can compare prices of items while they decide which to add to their virtual shopping list.

Visitors can also search recipes and view sales information about different ingredients. These ingredients can also be saved to a consumer's shopping list.

GSN-enabled retailers including Modesto, Calif.-based Save Mart Supermarkets allow shoppers to search printable coupons by clicking on a coupons tab on its site, related Robinson. These coupons, along with the lists, can be printed once the shopper arrives at their local supermarket, hardware permitting.

Once GSN's online coupon offering becomes fully integrated with the software's other features, shoppers searching recipes will be presented with information relating to the money they can save by using online coupons for the recipe's ingredients.

Robinson related that GSN's shopping list creation feature increases basket sizes by about 12%. The probability that a consumer will buy the items that they've added to their online list is higher than 90%, he explained.

For three days each week, representatives of U.K.-based Tesco collect the prices of 10,000 items from three competitors to ease the shopping burden of their customers.

The website feature, known as Price Check, presents customers with an easily searchable database that lets them compare prices of specific brands and quantities of everyday items like butter from retailers including Asda, Sainsbury's and Morrisons.

Tesco also uses an easy-to-read chart to show customers how many of Tesco's items are cheaper, the same price or more expensive than those of each of its competitors.

The retailer's feature is somewhat unique, said McCloskey.

“Certainly price comparison websites have been around for a decade so they're nothing new,” he said. “They're effective when it comes to higher price point items like electronics, but for the time it takes the shopper to search, the reward of a few cents off a smaller item isn't as compelling. There is, however, a niche group of people out there who are very fanatical when it comes to price comparison so this type of feature might make sense for them.”