Inmar recently published a press release highighting that 2009 saw year-over-year sequential growth in coupon redemption for the first time in 13 years. This activity translates into 27% annual growth from 2008 with nearly 3.3 Billion coupons redeemed. Pretty impressive statistics, but not at all suprising given the anemic global economy and cash-strapped consumers.
But the real news here is the contribution that digital coupons continue to deliver to this equation. The numbers tell the story all too well: Print coupon distribution via FSI accounted for 89% of total coupons in circulation and about half of redemptions…which leaves the balance to digital, mobile and point-of-sale coupon delivery. So roughly 10% of total coupon distribution (via digital and other means) drove roughly half of all redemptions.
On a related note, just today Cellfire and Verizon announced a pretty cool distribution partnership. It’s essentially a white label version of the Cellfire store, and will put digital coupons in front of a large swath of Verizon mobile users.
Given this very apparent shift to digital, it’s amazing that Valassis and other print media publishers are still able to command the insertion rates they do. I wonder how long it will be before they dump their print FSI service and go all-in to digital delivery only. Time will tell.
This is a follow-up to Part I on the same topic, which you can find here.
Earlier this month I had the opportunity to catch a live presentation by the founder and CEO of Alice.com, Brian Wiegand, at the Consumer Goods conference in Orlando. This was a learning experience on many fronts, as my earlier views were based on partial information.
In a word, the best way to summarize Alice.com is PLATFORM. What Wiegand and team have done is to offer CPG brands the tools and forum with which to sell direct to consumers. Alice takes no ownership of the product, the data or the consumer. They have built a nifty e-commerce platform that allows a brand, and really a community of brands, to easily merchandise themselves to a set of engaged shoppers. Alice does take the burden of financial transaction processing, fulfillment, customer service and data management off the hands of the brands — a welcome proposition for most CPG companies so they can focus on building and marketing their goods. Their fees are based on the services they provide, not how much volume they move.
This business model puts Alice in a unique position. Unlike the first generation of selling consumer packaged goods direct to consumers (Webvan, Netgrocer, etc.), Alice can put their focus on three things: building the platform, ensuring excellent service, and working closely with the brands to mine the data.
So while my earlier analysis concluded that this channel may not move tonnage for many brands, it does offer a quick, easy and value-added way to reach a set of high value consumers…efficiently. And since Alice isn’t directly taking a piece of each transaction, the full retail margin is passed directly to the brand helping to support Alice’s promise of free shipping. But the real potential boon here for CPG brands are the valuable insights that can be gleaned by interacting with and marketing directly to consumers. Alice intends to drive a lot of value with this part of the proposition, and rightfully so.