REDEEMING QUALITIES

Use of clipless coupons is on the upswing, creating new opportunities for retailers to motivate shoppers to come into a specific store for discounts on the products they want to purchase.Retailers such as A&P, Montvale, N.J.; Hughes Family Markets, Irwindale, Calif.; and Ralphs Grocery Co., Compton, Calif., are making discounts available to consumers via the Internet or kiosks located in the store.

Use of clipless coupons is on the upswing, creating new opportunities for retailers to motivate shoppers to come into a specific store for discounts on the products they want to purchase.

Retailers such as A&P, Montvale, N.J.; Hughes Family Markets, Irwindale, Calif.; and Ralphs Grocery Co., Compton, Calif., are making discounts available to consumers via the Internet or kiosks located in the store. Some clipless coupons can be found in the form of personalized "shopping lists," equipped with bar codes that can be scanned at the checkout.

Whatever the delivery method, retailers are finding that clipless coupons can be targeted more easily to individual shoppers than traditional paper coupons by using frequent-shopper data. In addition, some clipless-coupon delivery systems can encourage impulse purchases.

A&P recently completed installation of kiosks that deliver paperless electronic discounts directly to the cash registers in more than 600 of its stores. The retailer found that the rate of electronic transaction redemption ran high, though it would not release specific figures.

Redemption rates for traditional paper coupons are estimated to be in the range of 2%, according to industry sources.

"Consumers don't have to worry about going through magazines and other things looking for coupons," said Mike Rourke, senior vice president of communications and corporate affairs for A&P. "They walk into the store when they're ready to shop and they go to the kiosk and the coupons are there for them."

Rourke explained that when consumers swipe their frequent-shopper card, the kiosk presents discounts on-screen for items the shopper normally buys. For example, if the shopper is a young mother, the discount might be $1 off Pampers, among other offers.

The shopper chooses the discounts, which are sent to the point-of-sale for reduction on the bill at checkout. Shoppers can also obtain a shopping list from the kiosk so they don't forget which items have discounts.

Brodbeck Enterprises, Platteville, Wis., which operates Dick's Supermarkets, is also offering electronic paperless coupons to its frequent shoppers.

One method the retailer plans to test by the end of 1997 involves consumers logging onto its web site to select both the offers and the store locations where they want to receive discounts. The discounts will then be automatically transmitted to the store and deducted from the shopper's total at checkout, generating no paper at all.

The other method, tested this past summer and set for relaunch on Jan. 26 is the Shopping List program. When the program begins again, the list will be made available via e-mail or regular mail, at the customer's option.

In this program, several offers in the form of a shopping list are sent to members of the retailer's customer-loyalty program. Offers are based on individual purchasing preferences. Consumers receive the discount by passing the bar code on the shopping list over the checkout scanner.

With the relaunch, loyalty-club cardholders whose purchasing preferences trigger 15 offers will receive the shopping list, which will make it more valuable than the five to seven offers during the earlier test program, said Ken Robb, senior vice president of marketing at Dick's Supermarkets.

"We expect to start off in the relaunch with much higher redemption rates, because we'll have a core group of users and high value shopping lists," he said.

A new program called ValuPage, which is being used by a number of national retailers, also provides consumers with a shopping list of discounts. Some of the participating retailers are Meijer, Grand Rapids, Mich.; Pathmark Stores, Woodbridge, N.J.; and Grand Union Co., Wayne, N.J.

Although the program is not currently tied to any retailer's frequent-shopper card, its structure motivates consumers to visit a specific retailer more than once. ValuPage can be accessed through SuperMarkets Online, Greenwich, Conn., the Internet division of Catalina Marketing Corp., St. Petersburg, Fla.

To access discounts from SuperMarkets Online, shoppers log on to www.supermarkets.com and enter their zip code. A list of stores where they can obtain the discounts comes up on the screen. Once the retailer is chosen and the discounts selected, users can print out the ValuPage, which has a bar code at the top, to take with them to the store.

At checkout, the combination of the bar code from the ValuPage plus the bar code on the product triggers the Catalina printer at the POS to issue a Web Buck, a cash reward for having purchased any of the items on the list. The Web Buck is good for grocery purchases on the next trip to the issuing chain, which encourages customer loyalty for the retailer.

About 23 national consumer packaged-goods companies, representing 70 product categories, are participating in the ValuPage program, according to Will Gardenswartz, vice president of marketing/business development at SuperMarkets Online.

Meanwhile, Hughes Family Markets and Ralphs Grocery Co., both of which have worked with SuperMarkets Online in California, have tested instantly redeemable coupons that consumers print from their home computers. Security issues regarding coupons printed at home, though, remain a concern.

"We tested it to see what type of reaction we would get," said Mike Shultz, senior vice president at Hughes. "And in the first three weeks, we had 40,000 hits. It was a lot more than I expected. But it's too early to tell what residual effects it will have."

Shultz said Hughes is evaluating the ValuPage program, but that no decisions have been made yet.

Retailers are focused on capturing shoppers' attention at the store level with new coupon delivery systems.

A Cub Foods store in Woodbury, Minn., a franchise of Jerry's Enterprises, Edina, Minn., plans to test a new coupon/product locator system beginning Dec. 15. The freestanding unit features 100 spaces for product discount offers, and prints and dispenses coupons to consumers.

"We're going to position it right in the front as you enter the store," said Gary Munson, supervising store director at Cub Foods. "It's going to be extremely visible and inviting, and hopefully generate a lot of usage."

He added that if manufacturers come up with the proper vendor coupons, "we will be able to generate additional sales on high dollar value items and increase our penny profit."