COUPON SYSTEMS PROFFER PRECISION

RUPERT CHISHOLM

POMPANO BEACH, Fla. -- The release of the latest electronic coupon clearing system, from Advanced Promotion Technologies, has marketing executives hoping the onset of truly "paperless" coupon clearing may finally be at hand.

APT here was granted a patent for its Coupon Eater coupon clearing system this month. According to the company, it is the first patented electronic coupon validation and redemption network in the industry.

The APT announcement follows closely on the heels of the unveiling of another electronic coupon clearing system, from Catalina Electronic Clearing Services, St. Petersburg, Fla.

The Catalina system is about to begin testing in 24 supermarkets at 12 chains in March. It is being supported by several large manufacturers, including Procter & Gamble, Nestle U.S.A., Campbell Soup Co., Lever Bros., Nabisco Food Group, Ralston Purina Co. and Best Foods.

Brand marketers and industry observers already are discussing the potential benefits of widespread coupon scanning, which include improved promotional tracking and dramatically reducing the problem of coupon misredemptions, malredemptions and chargebacks. By electronically reading, validating, clearing and possibly physically canceling coupons at the point of sale, the systems also are intended to reduce the time required for processing and redeeming coupons.

Industry executives said that the reduction of redemption times through electronic coupon clearing would enhance their ability to recognize and subsequently capitalize upon current purchasing trends.

"The promise of more efficient redemption and targeting is vital because Efficient Consumer Response depends upon being able to gather information and react quickly," said Tom Dailey, president and chief executive officer of Spectra Marketing Systems, Chicago. Others added that the decreased redemption times resulting from electronic coupon clearing should improve the marketing department's planning abilities by providing more timely projections about future redemption rates.

"Right now the time from when a coupon drops to the time when you can get a report can take up to three months," said a packaged goods marketing director, who asked not to be named. "Anything you can do to speed that up helps marketers know where their budgets are and plan more intelligently for the rest of the year."

Industry observers also anticipate the systems will help brand marketers gather information into aggregate on-line data bases to allow a more accurate gauge of coupon program effectiveness.

"Electronic clearance will enable us to do a much better job tracking the sales lifts that occur when a manufacturer drops a coupon," said Mike Scroggie, president and chief executive officer of Catalina Information Resources, Anaheim, Calif.

Others said that electronic clearance, which is expected to utilize an extended bar code, would also make it easier for marketers to access the additional demographic information that currently appears in suffix codes.

"Electronic clearance could supply us with chain-specific information that could help us develop marketing programs that are more in tune with a retailer's specific audience," said the marketing director.

"By electronically accessing an extended code [such as the UCC/EAN-128 code], you would have access to much more specific and reliable information," he said.