Case Study: Natural Food Chain Sees Steady Growth In Mobile Coupon Redemptions

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PCCMerchant: PCC Natural Markets
Location: Seattle, Washington
Size: 9 stores
Platform: Chinook Book
Results: Nearly 600 mobile coupon redemptions in September.
Bottom Line: Digital coupons are becoming an increasingly important marketing tool for grocery chains.

One-in-five consumers has downloaded a supermarket app, and the majority of those consumers use their mobile apps at least twice a month. In an effort to get in on the trend, PCC Natural Markets, a health food co-op with nine locations in Washington, partnered with Chinook Book earlier this year on a mobile coupon app.

“Print coupons are still very popular—we get a ton of them that come through our registers—but it’s inevitable that digital coupons will become more prominent,” says Tom Monahan, marketing manager at PCC. “From our standpoint, this is a great partnership just to get into this game and understand it a little bit better.”

Consumers who download Chinook Book’s mobile app can get access to one-time manufacturer coupons that are exclusive to PCC. Chinook Book manages the partnerships with manufacturers, and checks in with PCC regularly for feedback on which products they’re likely to promote. “As they started to get manufacturers on board, they would approach us and say, ‘We’ve got this manufacturer that wants to do this,’ and we’d let them know, ‘We carry these 20 SKUs from this line,’” says Monahan.

Nearly two years passed between the time when Chinook Book first approached PCC and the launch of the pilot program this past summer. During that time, Monahan worked together with Chinook Book to find solutions to infrastructure and logistics issues. “We needed to figure out the best way to make it work for cashiers. Currently the coupons are redeemed the same way as we’re redeeming retailer offers, so the PLUs are keyed in by the cashier, but we’re really close to the point where we can actually start scanning the coupons off of the customer’s mobile phone,” says Monahan. “That would make the process quite a bit easier for everyone.”

Although customer usage has grown steadily since Chinook Book began offering exclusive manufacturer coupons at PCC, Monahan still views the platform primarily as a learning tool for his company. “We’re seeing pretty good numbers over these few months, but it’s not huge numbers where we don’t feel like we can adequately support it either,” says Monahan.

In the first month since the mobile app debuted, PCC saw just over 400 redemptions. That number grew to 500 in August, and by September almost 600 mobile manufacturer coupons were redeemed. “From our perspective it’s clear that we have shoppers who would like to use these types of offers and we’re seeing growth from month-to-month, which is encouraging,” says Monahan.

While Monahan says he’s “very pleased” with the results thus far, he’s struggled to measure the ROI. “That’s the tricky part. You have a little bit of guess work associated with that,” says Monahan. “You can’t say for sure that people who are using these offers would or wouldn’t have purchased the items [without a mobile coupon], but I’ve got to think it’s probably encouraged some additional sales.”

Partnering with Chinook Book on an app that offers manufacturer coupons, as opposed to retailer coupons, has given PCC the opportunity to work through the growing pains of launching a mobile coupon program with the support of an outside vendor. Chinook Book has worked with manufacturers to come up with offers that run exclusively on the vendor’s mobile app at PCC, and found solutions for obstacles that have come up along the way. “If we’ve got a customer trying to access five or six different coupons, that could take some time. So [Chinook Book] figured out some methods to make that process easier on both ends,” says Monahan.

One way that Monahan is hoping to make the redemption process easier is by adding mobile scanners at the point of sale. “Having those scanners in place at the registers is going to go a long way for us,” says Monahan. “Making the process as easy as possible for the customer, but also as easy as possible for our own staff, is probably the biggest thing right now. It’s really infrastructure, just making the operation work as smoothly as possible.”

Monahan is hoping to take some of the lessons he’s learned about digital coupon redemptions from the Chinook Book partnership and use them to inform PCC’s mobile marketing strategy going forward. “The biggest thing for us is trying to connect our own website and our own web resources to the shopper, and specifically the shopper on the go,” says Monahan. “We’re seeing mobile visitations to our site growing pretty quickly, so we’re trying to be more mindful of making those resources on our website pretty mobile-friendly.”

The Takeaway
Partnering with an established coupon vendor has given PCC a way to offer digital manufacturer coupons to its customers without going through the hassles associated with launching its own private mobile app. PCC can take what it learns from this project and use those lessons to guide its future mobile marketing efforts. For example, Monahan has already learned how important it is to have the right infrastructure in place to efficiently redeem mobile coupons without bogging down cashiers. Adding scanners to each register is just one step that he’s taking to prepare PCC as digital coupons become more popular among consumers.

Stephanie Miles is an associate editor at Street Fight.

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Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.