Empowered Consumer Experiences Drive Loyalty, Profits

 

We don’t get a physical newspaper at our house, but sometimes my wife will go buy one – and then throw it away (!) – to get the coupons inside. It’s not just my family abandoning newspapers -- newspaper circulations have been declining for over 15 years, and the rate of decline has been accelerating as other, often free, forms of getting the news crowd out newspapers as sources of news. The NY Times (not counting the reader) now has more online readers than print subscribers, and other papers are seeing online subscriptions rise, too. While online newspapers can still place ads, there’s not a good, established way for consumers to interact with weekly promotions or coupons in online newspapers. The association between weeklies /coupons and newspapers has historically been built on the idea that newspapers come to consumers with ads and coupons, consumers find coupons they want, clip them, and then bring them to the store. This model is breaking down.

What will replace it? One option is nothing – just do everything with member cards, and maybe cash register coupons. But coupons and weekly promotions have a place. Consumers like them. There’s two distinct dimensions of coupon clipping that seem most important to me. First, there’s the kitchen/meal planning and budgeting on the practical side. Then there’s the “thrill of the hunt” on the other side. My wife experiences genuine joy when she can hunt through the ads and finds good bargains – something that doesn’t happen when she just presents her member card at checkout. Moreover, many parts of the grocery retailing and food manufacturing business have been built and optimized around the notion of weeklies and coupons.

Another option is for someone – newspapers or special industry services like Smartsource – to fill the gap by providing printable coupons online. At this time, Kroger doesn’t appear to support printing online coupons, but Alberton’s and Safeway use the Smartsource coupon printing service from their own online sites. (I should add: I can’t comment on how the Smartsource service really works, as they don’t support Windows Vista yet – although they do promise they will soon!) Oh – and who owns Smartsource? Newscorp! As in Rupert Murdoch’s Newscorp, owner of 175 different newspapers around the world (along with Fox, and many other assets). So the newspaper industry is already responding to this trend. But is there really any reason why coupons should be linked to newspapers in a digitial world? The tie between the newspapers and coupons was historically the fact that newspapers get physically delivered. In the digital world, the transport is no longer an issue. Just as importantly, is there any reason – in the long run -- coupons should be printed?  While I do recognize that grocers and consumers alike may want to continue printing coupons for some time, I frankly don’t see this as a great long term solution. Paper-oriented processes are costly, time-consuming, and error prone. Providing an option that lets people and enterprises get the value out of the concept of coupons without imposing the real issues of handling paper coupons would be a boon for the industry. Actually printing coupons should not be on the required path to use coupons.

I wonder if a better approach might be for grocers to deliver coupons (and weeklies) directly to consumers?  Does there need to be a Smartsource-style middleman in the coupon business?  Besides having a middleman help consumers print coupons, today, Kroger's, Safeway's, and Albertson's online coupon and promotional capabilities revolve around some form of access to the same (untargeted) weekly promotions that also get distributed in newspapers. 

Below is a short review of each grocer’s online coupon/weekly capabilities, as well as some general observations about their consumer web sites and how they enable consumers to have better experiences across multiple phases of what I call the “total meal lifecycle” (i.e., planning, shopping, preparing, eating, cleaning, saving).

Kroger
Kroger lets consumers view an image of the coupon items in the actual weekly, and when you hover over a specific item you get a “flyout” with a larger image of the item plus the text of the coupon. You can also search Kroger’s weekly coupons by category or keyword, and scroll an alphabetical list of coupon items. If you click on an item, it pops up in a separate browser window with two control buttons: “close item” and “add to list” that lets users add the item to a shopping list. There’s also one click access to the shopping list that shows product name, description, coupon expiration date, price, and quantity to buy, as well a column at the end for consumers to add any notes they want to make for themselves. You can tell they’ve put some effort into it. The add to list functionality is easy to use, but also the quite limited. For example, there’s only one list. Also, there doesn’t appear to be any way to actually plan/shop for items at Kroger that are not listed in “the weekly”. To Kroger’s credit, they appear to be searching for ways to create stronger linkages between shopping and the cooking, meal planning experience. There’s a wine guide, with an interesting Flash-based tool to help people pair foods with wine types. There’s also an section on wine growing regions where it appears that wineries can pay for recommendations (not sure if they do pay, but that’s the appearance). Want a wine from Sonoma County? Kroger recommends a 2002 Chardonnay from Gallo of Sonoma. There are also recipes from Good House Keeping, but no apparent way to add recipe ingredients to a shopping list. I can get store hours for the Kroger in my neighborhood, as well as mapquest map/directions, by entering my zipcode, but consumers can learn very little about what’s at my store (beyond the “weekly” – which is based on location).

Safeway
Safeway uses the almost the exact same control as Kroger for allowing consumers to browse the weekly coupon inserts. Turns out both are provided by a company called Vertis, a marketing communications and analytics company that serves the retail industry (and others). I would guess this weekly coupon insert browsing control was state of the art in 2004. It’s not bad, but it seems somehow “unfinished” by today’s standards. See comments above. As with Kroger, Safeway also seems to be thinking about ways to expand how it creates value for consumers beyond the act of shopping in the store itself. For example, there’s a section of the site that offers recipe ideas, and lets consumers browse or search recipes from Allrecipes.com. Consumers can email recipes to friends, can submit their own recipes, can “find more like this”, and the recipes have ratings (1-5 stars, and reviews). There’s even an “add to list” feature that will let consumers add the recipes to a “Recipe Shopping List” which builds a single ingredient list by store category (baking, dairly, etc) for the recipes selected. The list can be printed. The only problem is that THIS shopping list doesn’t include the items from the weeklies that consumers add to THAT shopping list. Two lists? Well, actually more than that, as there’s also an online shopping capability at the Safeway site with its own “Shopping Cart”. I didn’t explore Safeway's online shopping experience, as it requires registration.

Albertson’s
Albertson’s appears to be very focused on enabling consumers to have a better total meal lifecycle ( planning, shopping, preparing, etc.). The entry page to Albertson’s site offers four primary activities: “Planning”, “Shopping Online”, “Find Savings”, and “In Our Stores”. By clicking on Find Savings and selecting a store, consumers can get a flash-based image of the weekly coupon inserts. The flash-based weekly coupon viewer has controls that let consumers add items to their shopping list, and also circle or make a note about items, as well as a print capability. From the navigation perspective, there’s a “QuickFlip” feature that shows an animation of the pages turning based on the movement of a slider control. It’s a little like a down-level version of the Silverlight example shown here. Hovering over a specific coupon item in a weekly insert gives consumers a “flyout” with a larger picture and additional information. By clicking on a specific coupon or promotional item, consumers can add the item to their shopping list and access additional controls to search ads by category or keyword. They can also click a link called “View All Weekly Ad Items”, which brings up a table with all of the weekly coupon items, with images and data, that users can browse and scroll through (9 per page). Consumers can add an item from the weekly to a shopping list. Unfortunately, this shopping list doesn’t connect to the “Shop Online” shopping list. Albertson’s also provides recipes from Allrecipes.com, as does Safeway. From the Safeway experience, I would suspect that this list is also separate from the other shopping lists on the Albertson’s site. I can’t say for sure, though, because I kept getting an error when I tried to add recipe ingredients to a shopping list. With different components of the web site coming from different providers, I can see how this would happen – but it’s still not acceptable, and certainly not a great user experience. In fact, while I give Albertson’s points for trying hard and having some nice features (the ability to save lists, online shopping from list, online shopping from past purchases, etc.), my overall impression is that there’s just too much clicking around and page loading and re-loading and the different parts don’t work together well enough. For the level of functionality they are trying to provide the user experience would benefit significantly from a dose of AJAX, or better yet, it should be a client application.

All in all, the presentation and interaction models at the grocers I evaluated were difficult at best. None of the grocers sites I visited really succeeded in putting together an integrated experience for consumers to access or use coupons online as part of a larger shopping experience.  All the grocers seemed to recognize that they could create value for consumers and themselves if they could empower users in multiple phases of the holistic meal lifecycle, but they could only really deliver on point solutions within certain lifecycle phases and it seems have not yet figured out how to create a seamless experience across the phases of the lifecycle. I think this is important. Fortunately, it's also achievable. 

Driving loyalty with a better user experience.    
IMO, there's a great opportunity for a grocer to drive higher consumer loyalty and expand the the set of shopping trips for which a consumer will consider that grocer by empowering consumers with better experiences.  To get started, grocers need to look beyond the weekly promotion / couponing paradigm to the context of the total meal experience, and it's apparent from the grocer websites described above there's some interest in this -- so we're off to a good start.  :-) 

Additionally, grocers should also look beyond the web site, and instead be where the consumers are.  Web sites remain important, but they are increasingly becoming the "lowest common denominator" experience as consumers migrate toward services that are available to them where they are, on their terms.  Industry standards for information and service interoperability make this possible. Web 2.0 is based on this idea, that consumers can consume and even co-create information and services on their own terms. 

Fundamentally, consumers have a shortage of time and attention.  Grocers who force consumers to come to their website are fighting for that time and attention.  Grocers who expose valuable capabilities to consumers where they are, empower those consumers, and turn consumers' attention and time deficits to their own advantage -- driving higher loyalty and a stronger business. 

Beyond a grocer's website, some additional channels that grocers can now leverage:

• Windows Vista gadgets and Live gadgets to reach consumers on their desktops and on their home page.  A couple possibilities: show personalized "deals of the day" or perhaps a "price watcher" that alerts consumers when a product hits a price threshold.  These channels can lead consumers seamlessly to a grocer's web site when needed.   
• Windows Live Messenger.   Consumers could IM an automated service to check prices, see stock levels, and find in-store locations (e.g., "sugar on Aisle 6").  Can also lead consumers to a grocer's website, if needed. 
• Windows Mobile / SmartPhones to empower consumers "in store" or on the go.  There's Live Messenger for mobile, so the capabilities above are possible, but there's also opportunities for on-device shopping lists and payment processing, among other scenarios. 
• In-store kiosks for ordering special items, printing shopping list saved online or in a custom application (see below), personalized route planning to get in and out of the store faster, check stock levels or prices on items, see promotional discounts, etc.   
• Rich custom applications that leverage online services and information.  This channel can provide consumers with an integrated, high value experience for managing part or all of the meal planning, preparation, and clean-up lifecycle.  The possibilities are nearly infinite, but my personal wish list would include:
  • The ability to receive, view, search, and digitally “use” coupons so they are credited with my member card, save grocery coupon usage with past purchase history.
  • Transfer items to shopping list or digital shopping cart – only one list, please  :-) 
  • View recipes from multiple sources
  • See videos of people making recipes
  • Voice control of certain elements – especially recipe videos “pause”, “replay that”, etc., so I can follow along in the kitchen with dirty hands
  • Meal planning service – pick a series of healthy meals, and get the recipes and sent to my shopping list and “meal calendar”
  • Import ingredients to shopping list
  • For ingredients on shopping list, show recipes I can make
  • Show coupons or promotions for items on shopping list
  • Tell me what’s in stock/out of stock at my local grocery store, and suggest substitutes that I can select and add to list
  • Get notified/alerted when out of stock items are in stock
  • Show estimate price of shopping trip, and the estimated discount from coupons
  • Show shopping history (by ingredients and spend)
  • Share content via spaces.live.com blog (e.g., "Post the recipe and shopping list from last night's party") that others could import into the grocer's application 
  • Promotions tailored to my shopping history
  • Option to launch the grocer’s application from a Vista gadget
  • Synchronize with my online shopping list
  • Ability to place orders for special services – order custom deli items, custom baked goods (e.g., upload photo, put on cake)
  • Expand over time to offer additional services -- place and manage pharmacy prescriptions, photo printing, etc.
  • Option to send list to my Smartphone
  • If a kiosk or other electronic device is present in the store, the option to swipe member card and enter password/pin and get my access to my personal shopping list and in-store route planning, to connect my home experience to my store experience
  • Fully connect with my Windows Live gadget and website experiences.

If I were a grocer, I’d also like to make sure:

• • The application worked with my other systems, and enhanced the value of other technology and information asset investments.
  • I could gather insights on purchase intention to reduce stockouts
  • I could target different coupons to different people
  • I had analysis capabilities on consumer behavior, preferences, and the ability to test the market and find elasticity/threshold decision criteria (that is, why do people make certain decisions and what would make them choose different decisions)
  • This was a mechanism to positively reinforce brand
  • Possibly this could be a channel for mfgs to buy ads???
  • A digital coupon delivery channel that maintains some fidelity to the newspaper weekly coupon model (e.g., people enjoy finding bargains), but provides value to consumers without creating direct price competition (e.g., my store coupons are not side-by-side with my competitors store coupons)
  • A service that surprises and delights consumers, and gives them a durable, difficult to copy, reason to choose my grocery chain.

Again, this is basically my personal wish list for a better shopping experience.  :-)  Are there features or elements you'd like to see that I didn't list?  Or, are there items on the lists above that you think are more important/more valuable than others?  Which would be your favorites? 

Technorati tags: grocery, gadgets, user experience, vista, Live, spaces.live.com, loyalty, coupons, grocers

Comments

• Anonymous
  July 03, 2007
  Are you thinking about your consumers' personal value stream? The businesses I generally work with are

• Anonymous
  April 23, 2009
  Use technology to make life better – for your family, friends, neighbors, customers, suppliers, partners,