As consumer packaged goods manu-
facturers get more comfortable with Internet coupons, many are exploring more sophisticated ways to use them, like linking them to online surveys, rewards programs, targeted e-mail newsletters and retail frequent-shopper programs.
"We want to be where our consumers are," said Rose Grabowski, vice president, value development, Mott's, which recently beefed up its online coupon program.
Indeed, consumers are on the Web -- and looking for product information and coupons while there. Though most consumers get CPG product information through the mail (88%), the Sunday paper (81%) and inside or on a product magazine (80%), they also rely on coupon Web sites (45%), an e-tailer's Web site (33%) and a brand or manufacturer's Web site (32%), according to a survey by Brand Marketing and Greenfield Online.
And while nearly all consumers get their coupons from the Sunday paper (93%), the mail (92%), inside or on a package (90%) and/or in the store circular (85%), nearly two in five feel it's beneficial to receive grocery coupons online, receive local coupons and offers online, and join an Internet club or Web site that offers free samples, coupons and other offers.
Nearly half of consumers (47%) joined an Internet club or Web site that has promotional offers and visit that site about two times a week, according to the survey, conducted with assistance from Experian, the worldwide information-solutions company, and in cooperation with the Promotion Marketing Association.
Consumers use coupons to purchase their regular brand or more of it, the survey said. This means that coupons help preserve a brand's franchise by retaining the customer base. By influencing larger purchases, coupons help keep the customer for another purchase cycle, according to the report. Coupons also work well, though to a lesser degree, to stimulate new brand or product trials.
Responding to trends like these, manufacturers are partnering with online promotions companies to boost coupon distribution and redemption. Such partnerships often help manufacturers obtain valuable consumer data, and tailor coupon programs in response to it, marketers told Brand Marketing.
"Fundamentally, we want to build an interactive relationship with our consumers," said Ralph Blessing, marketing director for Suave master brand from Unilever Home and Personal Care, North America. "The more we can learn about them in a way they don't mind, the better we can meet their needs."
Though Mott's, Stamford, Conn., has been offering online coupons for about three years, it decided to broaden the scope of its online consumer base. To do so, it joined about a dozen other consumer packaged goods companies -- including Kellogg, Clairol and Georgia-Pacific Corp. -- to be the first to take advantage of Nuvisio Corp.'s new NestEggz online coupon service. Mott's has already delivered more than 70,000 coupons through the program.
NestEggz promotes its coupons through banner ads on a network of high-traffic, content-driven Web properties, including About.com, TotalWoman.com and Yahoo.com. Consumers can choose a coupon and print it via the computer.
Once redeemed, the savings are placed in an online account, which can grow depending on the user's coupon activity. For instance, users receive a 10-cent bonus for redeeming the coupon. The consumer can leave the balance in the account, where it builds interest, or request the money at any time. Retailers handle NestEggz coupons just like regular coupons, and send them to their regular processing center.
Online coupons have given Mott's a chance to experiment with its consumer offers. It has tried various face values, and is now considering offering multiple purchase coupons. While Mott's has eagerly embraced online coupons, other manufacturers haven't been as supportive due to concerns about fraud. Such companies fear that e-coupons will be reproduced or altered in some way.
A new study from the Coupon Information Center, Alexandria, Va., says there is no such thing as "fraud-proof" print-at-home coupons, and that the risks associated with them outweigh the potential rewards. Bristol-Myers Squibb, Colgate-Palmolive, General Mills, the Gillette Co. and Johnson & Johnson are among some 30 CPG firms who are members of the CIC, a manufacturer association dedicated to fighting coupon misredemption and fraud.
The CIC recommends alternatives to print-at-home coupons, including Web Bucks, cash-like coupons that can be used on the consumer's next trip to the retailer. Web Bucks are being used by a number of companies, including Beech-Nut Nutrition Corp., the Kimberly Clark Corp., General Mills and Unilever Home and Personal Care.
Consumers can get Web Bucks through ValuPage.com, an online coupon service operated by SuperMarkets Online, Greenwich, Conn., Catalina Marketing's online division. After entering their ZIP code, users get a list of local coupons that can be used at certain supermarket chains in their area. After choosing the offers that interest them, they get a printable page with a bar code on it.
By delaying the coupon payment, and putting the validation point at the register, not in the clearinghouse, ValuPage is able to combat fraud, said Carolyn Mahoney Lopez, director of corporate communications, Catalina Marketing Corp., St. Petersburg, Fla.
While some manufacturers may feel more comfortable with programs like Web Bucks, others are just as confident about certain print-at-home coupons. Mott's, for instance, felt that Nuvisio's security system (the coupon image is never seen on the computer) would prevent fraud.
And other manufacturers said they, too, are pleased with the new types of fraud-prevention methods on the market for print-at-home coupons. Unilever's Chicago-based Home and Personal Care North America is one of them. Since it launched a partnership with CoolSavings.com in the fall of 2000, it has not experienced any illegal activity, according to Blessing.
Unilever has been so pleased with the success of online coupons that it has been testing more elaborate offerings. Along with running cents-off coupons, it has participated in an array of other CoolSavings programs, including targeted e-mails, which promote its brands to a specified number of CoolSavings members and a predetermined demographic target; and newsletters, which contain product news and other editorial information, and are sent to members who have specifically asked for the information.
It has also used e-surveys to get consumer information. For instance, it may poll consumers through CoolSavings.com on the type of hair care product they use. It will later send a coupon for and product information on its own hair care products to certain respondents.
"We're experimenting a lot," Blessing said.
Suave got involved with e-coupons so that it could better track consumer behavior, and modify marketing plans as a result. Through its partnership with CoolSavings.com, it knows how many people view, print and redeem its coupons.
"Internet couponing is a fairly low-cost way for us to have a significant presence on the Web," said Blessing.
Manufacturers are using Internet coupons in other ways, such as linking them to retail frequent-shopper cards. Giant Eagle, Pittsburgh, was one of the first supermarket chains to use U-pons, paperless Internet coupons from planet U, San Francisco, an online promotions company. The coupons are selected electronically at the retailer's Web site, www.gianteagle.com, and recorded on the consumer's Giant Eagle Advantage card. During their next shopping trip, customers purchase the products they've selected, and scan their Giant Eagle Advantage Card. The savings are automatically deducted from their total bill. Giant Eagle also delivers U-pons through the mail.
Planet U's paperless coupons are also in use at Dick's Supermarkets and Ralphs Grocery Co., a subsidiary of the Kroger Co. Other Kroger units are also in the process of introducing them, according to planet U.
In a move that hints at the potential growth of Internet couponing, Transora, the business-to-business eMarketplace comprised of more than 50 CPG companies, acquired planet U early this year. Transora intends to use planet U to offer more sophisticated targeting and types of promotions, including the delivery of electronic coupons to consumers through retail frequent-shopper cards.
