As many as 12 years ago, I was predicting the rise of digital couponing and that the traditional coupon networks — FSIs, Catalina and others — would be supplemented or even replaced by new networks delivering coupons digitally. Boy, was I wrong.
The adoption time of digital coupons is taking much longer than I anticipated. I thought it would take just a few years, but digital is still a small percentage of coupons. I thought that technological hurdles would be the problem, and that once those were surmounted, it would be clear sailing — but what ended up happening is that once the best technology became clear, that only got the disputes rolling.
The consensus now is that the best way to execute digital couponing is a combination of digital-offer delivery and load-to-card redemption. Consumers, marketers and retailers all agree that the best way to deliver digital coupons is to inform the consumer that the offer exists, through email, web posting, text message or some other means, and then ask the consumer to load that offer with one click into an existing account — either with a loyalty card or some other tracking mechanism. It’s all more complex than that, of course, but such a system seems to work for all three constituencies: retailer, manufacturer and consumer. Plus the technology to support all of this is now readily and inexpensively available.
But the problem is that my original prediction of how this business would develop turned out to be entirely wrong. I assumed national networks would be built to deliver digital coupons, but as shopper marketing has become a bigger, more dynamic, more important part of the marketing mix, retailers have lost interest in becoming part of anyone’s network and would rather work directly with manufacturers. A lot of companies aspire to build a national digital coupon network, but the big retailers have no interest in being a part of a network when they think their size justifies being their own network.