Weekly circular ads and couponing apps in 2017 – consumer, where art thou?

Inside the shoppers’ app arsenal

Following my previous post: Besides “the internet”, what specific digital tools do consumers have at their disposal to navigate all the prices and promotional offers out there? Surely there must be some amazing apps for the world of FMCG retail by now. Let’s open the shoppers’ app arsenal and have a look. Indeed, there are dozens of free apps to be found when searching app stores for “weekly ads” or “grocery coupons”, some of them with millions of downloads. For weekly ads surely Flipp, Retale or Shopular are the biggest, and for finding your way through hundreds of coupons there are apps like The Coupons App, Coupons.com, SavingStar, SnipSnap, which boast millions of installs in the US market. Also worth mentioning are apps like Ibotta or Checkout51, which introduced a new kind of cashback couponing a couple of years back.
The interesting thing about cashback couponing is that – while presenting quite a barrier for consumers, who need to take pictures of their receipts – it comes very close to providing actual purchase data. Data that could be used to provide some helpful personalization and pre-selection within the jungle of thousands of grocery offers. But for whatever reason, this has not been acted upon by the makers of cashback couponing apps. On the plus side, they do work across different retailers, and consumers can redeem several coupons in one go.

So do any of these apps achieve “killer app” status?

In fact, none of these apps really do the trick, i.e., none of them really manage to effectively harness the potential available today. What they offer is nothing like the power boost of price comparison (compared to the old days) when booking a hotel or buying a TV. All the apps work pretty similarly and you still need to flip through all the circular ads page by page and dig through tons of coupons – only now you do it on the screen of your smartphone. Yes, you can search for specific brands and the Flipp app even lets you search for individual promotions from circulars. But it still shows you scraps of the printed version of each of the retailer’s carefully crafted layouts. A quick comparison of prices and product deals is simply not possible in any of these apps. The retailers’ booklets of special offers are apparently sacrosanct – and coupons still need to be printed on paper for most retailers, because ancient scanner technologies are unable to recognize barcodes on smartphone screens.

Easily plan your weekly grocery list? No, not really, paper shopping lists are still faster. Get relevant deals at the right moment? Nope. On-the-spot personalized suggestions? Nowhere near it. Welcome to the digital age, in which...not very much is possible.

“People don’t ignore weekly circulars because they’re paper, they ignore them because they are mostly irrelevant”

The worst thing of all: the user needs to start all over again every week, pretty much from scratch, in order to dig through all the offers and coupons. There is basically no personalization or use of historic user data. Sure, people find it nice that they are theoretically able to access a lot of offers and coupons (while no app really contains all offers available), but they would surely prefer to have the most relevant ones right on the spot. Facebook doesn’t show you all the posts they could show you. It’s fine for the users if Facebook removes tons of posts, as long as the most relevant ones are in the feed. When Google lists the most relevant search results on the first page, no one cares about page 2 and a million other irrelevant websites. It would be exactly the same with grocery offers. If a well-trusted party (ie. an app) showed a consumer the 10 most relevant offers in a very specific moment, then it would be enough for the consumer to feel well informed and get value out of it.

People don’t ignore weekly circulars because they’re paper, they ignore them because they are mostly irrelevant; they ignore digital irrelevancy as well. In the year 2017, this foray into the digital space for weekly ads and coupons feels akin to a slightly faster horse. The car in this industry, or call it the Facebook or Google of grocery promotions, has yet to be invented.

“The big misconception here is seeing consumers as soulless robots, mindlessly gravitating toward the cheapest price being held up in ads”

What did the industry lose sight of a long time ago?

Retailers themselves, despite their excellent access to historical purchase data via loyalty cards, have failed miserably when it comes to offering their consumers apps or other communications with a personalized experience. No big surprise there, as traditional retailers are neither technology companies, nor have they learned to build truly great customer experiences. You need both: smart algorithms and UX know-how.

Instead, their focus is heavily on price or other supply-side topics mentioned in my first post. The big misconception here is seeing consumers as soulless robots, mindlessly gravitating toward the cheapest price being held up in ads. But consumers want to be treated like human beings, and expect a human-like merchant on the other side, one that remembers the customer and makes special, personalized offers and curated suggestions.
Will new food giants like Blue Apron or Hello Fresh win and keep their customers by offering the cheapest tomato? I doubt it. It’s more likely to be the fact that they remember the gluten allergy or a customer’s preference for vegan food and deliver boxes that take those things into account the next time. People are willing to pay for that.

In the end, Amazon won’t kill retail by being the cheapest, but by being the one to offer the best customer experience. They may even one day start printing offers in circulars and putting them in the mailboxes of whole streets. But again, it’s not about online or offline. It’s about something food retail lost sight of a long time ago. Or to put it more precisely, they lost sight of someone, someone that Amazon understands and has focused on since 1997. Consumer, where art thou?

Magnus Aufschild

CPO at So1. Entrepreneur. Startups. Solving problems. Disrupting grocery retail with AI.