AWG partners with University of Illinois on digital coupon analytics project

Associated Wholesale Grocers, Inc. (AWG) partnered with the University of Illinois Gies School of Business on a research project to discover the effectiveness of digital coupons on shoppers. The students’ findings are helping to guide AWG Brands’ digital coupon strategy, the Kansas City-based distributor announced on Tuesday.

“Our partnership truly helps both parties involved,” said Kate Favrow, AWG brands director of marketing & brand development and a Gies graduate, in a statement. "By allowing the students to work with real anonymized data, they are exposed to the complexities surrounding the grocery industry and gain real-world experience before entering the workforce. On the flip side, we gain new perspectives and appreciate the insights and recommendations that come from their analysis work.”

The partnership began in January 2022 wen three cohorts of students seeking master’s degrees in data analytics were provided five years of digital coupon redemption data from AWG and recent transaction data from seven consenting AWG retailers. The retailers who shared their transaction data also received personalized findings reports.

This was the largest data set that any of the students had attempted to analyze, AWG said.

Following months of data cleansing, goal setting and analysis, the findings showed a variety of ways in which digital coupons affect consumers’ behavior and exposed areas that need more analytical focus.

The redemption and transaction analysis conclude that: consumers who use digital coupons also have bigger basket sizes; digital coupons affect customer retention on AWG Brands; and digital coupon usage peaked at the end of 2020 during the height of the COVID-19 pandemic.

AWG said the goal of the partnership was to discover whether digital coupons and discounts are associated with a change in private brands purchasing behavior, especially in regard to more spending and/or customer retention.

"We sincerely appreciate AWG for their invaluable partnership, mentorship, and guidance, enabling our students to tackle real-world business challenges and develop vital problem-solving skills,” said Ashish Khandelwal, University of Illinois professor, in a statement.

“Exploring real data, formulating questions, and employing the tools and techniques we learned in the classroom was truly enriching,” said student Mukul Kaushik. “We are grateful to AWG for providing us with this valuable opportunity.”

On Monday AWG named retail veteran Derek Jones as executive VP of division operations. He will assume the position effective July 10.

AWG is the nation's largest food distribution cooperative for independent grocers, serving more than 1,100 member companies and over 3,400 locations in 31 states from nine wholesale divisions. AWG’s most-recent consolidated sales were $12.3 billion. The company also operates subsidiaries that provide real estate and supermarket development services, health and beauty care, general merchandise, pharmaceutical products, specialty foods, and natural and organic products.