Supermarkets add digital coupons, but response has been tepid

  • Article by: JOHN EWOLDT , Star Tribune
  • Updated: June 3, 2014 - 10:13 PM

New Cub, Rainbow programs have been plagued by rollout glitches.

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Cub Foods is the latest Twin Cities supermarket retailer to let consumers click their coupons instead of clipping them.

No scissors, fumbling or organizer required. With digital coupons consumers can save 50 cents or a buck using their smartphone or ­loyalty card.

It’s a program that Rainbow, Target and even Medica have already launched, along with the grocery chains Safeway, Publix and Kroger. The digital programs mix and match mobile coupons, loyalty card-loaded coupons, and cash-back apps.

“The load-to-card system will provide customers with a convenient new way to save, whether they’re planning their grocery list at home or using our mobile app on the go,” said Mike Stigers, president of Cub Foods.

To use the program, shoppers need to have a Cub Rewards card and a Cub.com account. The program started last month and has received fair to middling reviews from users so far.

“The first several weeks it wasn’t ­working right,” said Carrie Rocha, coupon expert and founder of Pocketyourdollars.com. “You couldn’t load manufacturers’ coupons on the Cub Rewards card, and the store coupons weren’t coming off correctly.”

Extreme couponer Karen Gunter of Champlin, who founded Creativecouponing.com, has tried digital coupons but also experienced glitches with Rainbow’s program launch in January and Cub’s program recently. “I’d get to the cashier with my coupons loaded on my card, but they would never come off,” she said.

Cub spokesman Luke Friedrich said that part of the problem occurred when shoppers who loaded coupons to their rewards card had not set up a Cub.com account. Customers must have a Cub.com account with their My Cub Rewards card number attached to it, he said.

More recently, the company has received more positive feedback and higher redemption rates, he said.

Digital coupons are the latest attempt to revitalize a declining coupon industry. Despite an increase in the number of all types of coupons being released (315 billion in 2013, according to NCH Marketing Services), redemption declined to 2.8 billion coupons last year, compared with 7 billion in the early 1990s. Digital formats made up about 10 percent of that total, according to NCH.

But few think that digital coupon redemption will overtake the traditional paper coupon anytime soon. “In the next five years, paper will still be the champ,” said Krista Garcia, senior retail analyst at eMarketer in New York City. “They’re too ingrained in American couponing habits.”

That partly explains why experts aren’t expecting an explosion in digital coupon redemption in the near term.

In 2013, 52 percent of Internet users said they had redeemed at least one digital coupon that year. By 2016, that number is expected to rise to only 59 percent, according to eMarketer.

Garcia attributes the slow growth to an awareness issue. “Most shoppers haven’t been introduced to it,” she said. “It hasn’t gone mainstream yet.”

Phil Lempert, founder of Supermarketguru.com, thinks the problem lies in technology. He said scrolling through hundreds of coupons is neither convenient nor easy.

“Digital is clunky,” he said. “Redeeming them should be flawless, quick and fun. We haven’t figured that out yet,” he said.

Gunter said that, at least for now, she prefers paper because she can use multiple coupons if she buys several of one item. Most digital programs only allow one redemption.

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  • Cub Foods offers a My Cub Rewards card and a new digital coupon program for customers to download to their phones.

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