At the end of the third quarter, Inmar reported that redemption volume for digital coupons was up 86 percent versus Q2 2012 and that year-to-date redemption volume was up 160 percent over 2012. As a result of continuing growth, digital offers are now fixed elements in the promotion mix for a number of channels -- with significant penetration in the grocery and drug channels.
But, what about the potential for increased deployment of digital load-to-card (L2C) promotions in other channels? Specifically, what is the mindset of non-food CPGs when it comes to participating — with greater frequency and in greater volume — in L2C programs with mass merchandisers?
In order to better understand the willingness of non-food product manufacturers to provide additional delivery of digital offers to retailers in the mass merchandise channel, Inmar's Analytics team spoke recently with 106 executives (most of them from sales and marketing) representing 19 non-food product categories. Here's a summary of what we discovered when we asked them about digital promotions in this channel:
The overall outlook among these manufacturers regarding digital coupons is very positive.
- 69 percent believe digital promotions provide an effective opportunity to increase brand awareness.
- 67 percent perceive that digital L2C programs are important to shoppers.
- 74 percent anticipate their company will spend more on digital promotions in the next fiscal year.
Manufacturer activity in support of digital promotions is already on a significant growth trajectory with the number of manufacturer digital offers in the marketplace up 250 percent compared with last year.
There are educational deltas that must be addressed in order to engage more of these manufacturers and secure their participation in digital L2C programs.
- 17 percent consider digital load-to-card programs to be untested.
- 14 percent see their company as too small for these programs.
- 15 percent are unfamiliar with digital load-to-card program capabilities.
Earlier this year, Inmar sponsored a study by the Institute for Advanced Analytics at North Carolina State University that found early evidence of digital coupons generating significant sales lift — with identified increases in sales reaching as high as 5x among digital coupon users versus shoppers not acquiring an available digital coupon. We know that digital coupons work, and how they work. We need to better demonstrate both to those who could immediately benefit.
These manufacturers want to participate in digital coupon programs but are looking for increased support from, and collaboration with, their trading partners in order to engage.
- 74 percent want to participate in digital L2C programs with their retail partners.
- 70 percent want to participate in a comprehensive digital L2C program that could include email outreach, featured offer(s), dedicated category focus, coordinated in-store signage and/or sweepstakes opportunities.
A lot of the desired support centers on analytics and information sharing. The message we received from these manufacturers is that they want retailers to share market and basket data, to collaborate when it came to analytics and be more open with shopper data as it relates to program testing and promotion execution. At the same time, it was made clear that these manufacturers want retailers to be more proactive in reaching out regarding promotional opportunities. They want improved facilitation in understanding why they should participate and how they can scale an opportunity up for greater reach and efficiency.
This is another opportunity for Inmar to help trading partners engage shoppers, grow share and build brand. We have the analytics, modeling and targeting to meet these needs.
Digital offers are effectively and efficiently complementing traditional methods — enhancing engagement with increasingly tech-savvy shoppers — throughout the marketplace. And, there's no reason that can't be more the case in the mass merchandise channel. We're all just going to have to work to make it happen.
I'd like to know your thoughts regarding the effectiveness of digital L2C programs in the mass merchandise channel. You can share your comments as to what it will take to grow digital promotions in this channel in the comments section below.
Credit: Travis Lewis