Comment: Providing a better coupon experience

The rise of couponing over the last year appears irresistible, with 230 million redemptions made in 2011 alone. As the big retailers fight for competitive supremacy, it’s understandable that they look for ways to make sure customers continue to come through their doors. At the same time the brands are using coupons to reward existing loyal customers and to encourage new customers to try their products. Brand owner and supermarket coupons promote customer retention but can also prove problematic when validating, processing and, particularly with paper coupons, distributing. One way to keep these costs down is with digital couponing, which is on the rise and immediately reduces distribution costs, whilst also reducing the potential costs and risk of fraud.

There are many online websites offering vouchers for the major brands or stores. Unfortunately, I have also seen examples of coupons for sale online which have obviously been copied or even completely faked. In both cases, the retailer and brand owner are being defrauded.  For all types of coupon, - retailer, open, digital or paper -, the key is to give each coupon a unique serial number which can be used to guarantee the coupon’s authenticity and to control the number of times it can be used.

Another issue with coupons is ensuring that the customer has fulfilled the redemption criteria, for instance that they have bought the necessary products. Validating redemption criteria is often left to the check-out operator and this manual approach can lead to queues at the check-out, ignoring redemption rules, customer complaints or possibly all three. A much better approach is to provide full information about the coupon and its validation in a standard format either from a coupon data pool or using electronic data interchange like messages. This information can then be used to fully automate the validation process at the till which will be faster, more certain and allow for more sophisticated redemption criteria.  

The prevalence of vouchers has been described as ‘unhelpful’, but if retailers and brands work closer together with an agreed set of standards, they can provide a better coupon experience to the consumer while reducing coupon processing costs and minimising fraud and mis-redemptions. I believe we will see strong growth in this area in the future as retailers and brands alike look to exploit the potential of digital coupons on mobile phones. However, this will only happen for the mass market with an agreed adoption of standards. I am sure that the standards we are developing for digital will also lead to innovation for paper coupons. Now is an exciting time for the coupon industry as retailers and brands continue to use coupons and technology to find exciting and innovatory ways to reward existing customers and to find new ones.

• David Weatherby, Senior Consultant, GS1 UK