Whole Foods launches digital coupon effort

Whole Foods Market on Friday began delivering digital coupons to registered users of its mobile application — a key step as the retailer moves to pursue more effective marketing, enhance its value image and drive comparable-store sales growth across the chain.

The Austin, Texas-based retailer emailed registered members overnight with the coupons, which were loaded automatically to user’s iPhone app.

According to one obtained by SN, offers include $5 off a $15 purchase of fresh fruits and vegetables; a buy-one, get-one offer on 365 brand Effervescent C Fizzy Drink Mix; $1.35 off an 8 oz. Organic Valley grassmilk cheese; $1 off two bags of Garden of Eatin’ tortilla chips; $1 off Colameco’s frozen meatballs; and buy 2, get 1 offer on 500-ml Just Water spring water.

The coupons are valid through Feb. 9. It was not clear whether the offers were personalized based on shopper habits, although sources told SN it would appear the company is developing that capability.

"With this initial introduction of digital coupons, we are expanding our app beyond recipes and shopping list functionality to also include coupons," Whole Foods told SN in an email. "This is one element of Whole Foods Market’s broader efforts to offer greater value and convenience and to enhance our customer experience. With one scan of a customer barcode at register, preloaded digital coupons will be applied to corresponding items in a shopper’s basket. Over the coming months, we will continue to evolve, expand and optimize the digital coupon offering to bring our customers more of what they love with great savings at their fingertips."

“It’s a step in the right direction,” Bill Kirk, an analyst covering the company for RBC Capital Markets, told SN in an interview. “It shows that they’re making progress in their capabilities in this area.”

Whole Foods has moved deliberately in digital marketing, noting the need to be sure its cost structure and systems can support such an effort before a mass rollout. One constraint has been using multiple point-of-sale systems as a result of its growth by acquisition. The company is in the process of switching to a chainwide technology known as OnePOS. In November, CIO Jason Buechel said that had been rolled out to 18 stores.

Whole Foods is continuing to test an affinity Rewards program launched a year ago at 11 stores in the Philadelphia and Southern New Jersey areas. Members of that program, who earn points redeemable for store discounts and events like cooking classes at Whole Foods stores, also received digital coupons Friday. In addition, Whole Foods can now find rewards membership information by searching the associated phone numbers for customers who do not have physical cards.

Ultimately, said Kirk, enhanced competence in digital marketing can help Whole Foods close a gap with competitors like Kroger, which is driving increased sales in part through "personalized" digital offers to its shoppers. “It’s long overdue,” he said. “It’s ironic that specialty stores like Whole Foods that were ahead of the curve on food trends are now playing catch-up to the conventional guys in digital.”

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