I enjoyed Mike Trick’s post on discounts and data mining last week. It got me thinking about discounts and coupons. This post piggy-backs on Mike’s post about my disappointment in discounts.
I love coupons of all kinds. I am someone who buys very little without a discount (My frugality is like a blessing and a curse). To get my business, you had better send me a coupon! Since the fall, I have been overwhelmed with discounts and coupons for the first time in my life. With the economic downturn, I noticed that more stores offered store coupons than ever before. The coupon proliferation was out of control. Store coupon deals became increasingly lucrative, and sadly, I had to throw away many coupons that I normally would have used during the Christmas season (I only can do so much shopping, and I usually finish my Christmas shopping early). Just keeping on top of my coupon organizing was a chore–I didn’t have time to cut and prune coupons.
Like Mike, I was truly surprised that so few stores have been taking advantage of data mining to offer personalized coupons. There is a real opportunity there, particularly since many consumers have many loyalty cards (I have eleven on my key chain). Due to the proliferation of store coupons in the last year, I throw away most regular, non-data-mined coupons since I do not have time to organize them. These stores that make the loyalty cards have a lot of data and they aren’t really using it effectively. Major chains have been dropping like flies. Is it really easier to succumb to Chapter 11 than figure out how to do data mining?
There are exceptions. Kroger is truly a customized coupon superstar. I can’t think of anyone else in the same league. They mail me a pack of customized coupons about every month or two, based on products purchased on my store rewards card. Kroger helps me save on products that I buy anyway, since I assume they’d rather have me buy them at Kroger than elsewhere. Last month, Kroger included coupons for hummus and baby carrots in their coupon pack. I timed it right and bought both items for a quarter. I picked up a few other items with my hummus (hummus is like my gateway drug). It’s not a well-kept secret, but not everyone has figured it out. Other brick and mortar stores have offered some personalized coupons that print out with receipts. These systems seem to perform data mining by tracking credit card numbers. I’ve have one or two good personalized Target coupons in the past year but nothing else that I remember.
Kroger is particularly notable, since the Richmond supermarket Ukrops changed ownership, which has really shaken up the local supermarket scene. It’s a free for all here. All of the supermarket chains offer great deals now since they have a lot to gain (or lose). And grocery shopping is essentially a zero-sum game. Consumers can do away with luxuries, but they are going to buy groceries despite the bad economy (this isn’t completely accurate, since consumers are doing away with luxury groceries). One store’s loss is another store’s gain. But so far, Richmond grocery store chains have mainly offered generic deals that are either in the ad or mailed to everyone. The personalized coupons bring me into the store. As a result, I still do nearly all of my shopping at Kroger. I’m not the only Kroger convert, and I suspect that Kroger is beating their competitors with data-mining.
Personalized coupons and discounts aren’t really rocket science. But maybe they are, since I so rarely encounter effective, personalized coupons that take advantage of data mining. Tell me about your personalized coupon experiences!
June 8th, 2010 at 8:56 am
Here in the U.K., Tesco (biggest supermarket chain in the U.K.) uses datamining to generate its personalised coupons. It does it in two ways. One is at the checkout, when you pay for your goods, the computerised till may (not always) produce a coupon for an item or product that you use regularly, and I have the impression that the item is often one that you have not bought that day. The second way is that the loyalty card brings a mailing every quarter which has a token for the amount accumulated in cash from the card in the past three months, plus coupons as well and these are invariably for items that you use. Cunningly, the latter also include a minimum spend (save X if you spend more than Y) which is an encouragemnet to buy a little more next time.
My other loyalty cards in the U.K. do not seem to use such datamining. Or maybe I have ticked the boxes which tell them not to mail offers to me.
June 9th, 2010 at 2:05 pm
I have also noticed Kroger’s exceptional targeting of customers… and appreciate the benefits as well. Grocery stores have a particularly great position as far as data mining goes–where else do consumers spend so much money on such a large number of products specifically tailored to their specific tastes?
Another interesting use of data with regards to coupons are the “catalina” machines — often they’ll examine what you’re currently purchasing and print out specific coupons to match. If I buy any type of gluten free product, they may print out a coupon for gluten free bread that I may not have known existed (I’ve never bought it before perhaps). The information on the catalina company is quite interesting, and is available at the links below,
The second link from SAS notes that they recently started using more historical data, which isn’t too surprising.