Channels / Grocery
Focus on Digital

Mobile and digital deals everywhere, but where are private brands?

July 3, 2013
Trans

During several presentations this past year I have asked everyone in the audience under age 45 to raise their hands in response to two questions. First, “Do you subscribe to a daily newspaper?”  And next, “Do you read the food ads and coupon inserts to choose where to shop and what to buy?”

Not a single hand remains.

As anyone from Gen X or Y will tell you “newspapers (at least the physical ones) are so last century.” But for the past 70 years this has been the primary way that retailers and manufacturers have brought the message of savings to their shoppers.

These days our “what to buy” information comes from all kinds of digital and electronic email campaigns, mobile apps, coupon sites, Facebook promotions, and tweets from our local store. Everyone wants to be our “friend.” Digital deals and coupons are everywhere.

My supermarket now only advertises in the paper every other week (watch this trend start to grow). Each week I doreceive a digital copy of the current week’s ad plus personalized specials, recipes, and coupons. Lots of coupons. This past week, a whopping $209.64 were available.  But not a single private brand among the more than 150 coupon offers.

And it is not only at my store.

This is just one example of how the switch to social and digital marketing is beginning to represent a real risk to the share gains that have been made by private labels over the past few years. National brands have invested heavily in the resources and expertise to link directly to the consumer and dominate the digital and social market space. All have begun the process of shifting trade spending to digital coupons and mobile offers that funnel savings directly to consumers. These deals are everywhere today, but where are the private brands?

Web and mobile coupon platforms such as Coupons.comCouponNetwork.com, SmartSource.com and others now are beginning to overtake the Sunday inserts. Most can be linked directly to retailer websites and included with their electronic ads. Many can be loaded directly to the shopper’s loyalty card.  One click and no scissors. Some even put the savings in a shopper account while the retailer gets to ring the item at full price. It’s easy for everyone.

Yes, digital coupons still might be a small percentage of the total offered, but they are really taking off thanks in part to the popularity of smartphones and mobile shopper apps. I can access them whileI shop.

Add to that mom blogs, coupon bots, and consumers who treat getting the best deal as a sport and you have an exploding market opportunity too important to be ignored. The number of mobile coupons is expected to increase to 53 million a year by next year and the redemption rate is 10 percent compared with a 1 percent rate for traditional coupons.

According to a recent GfK survey, the typical digital coupon shopper is a female age 25-45 from a larger household. She spends 42 percent more a year than average in her store and makes 48 percent more “stock-up” trips per year. She is exactlythe same customer for whom private brands should have the greatest appeal.

So why aren’t more retailers incorporating their own brands?

Only a handful of retailers such as Kroger, H-E-B, Big Y, and Meijer are actively marketing their private label products via digital coupon partners and online ads. For the rest, the private brand share gains made in the past few years might start to erode.

 It is up to you to decide.  

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