13
Mar

Convenience Store Digital Coupons

images (25)Why has the affiliate couponing industry abandoned the convenience store industry? If you dig deeper into any affiliate coupon program (retailmenot.com, coupon.com) you will find that there are not many if any coupons available for convenience stores. It seems like there is a disconnect between the coupon affiliates and the convenience store industry. If you consider how much money is at stake it does not make any sense. $1 out of every $24 dollars is spent in this country in a convenience store. So why has the coupon affiliates abandoned this channel?

I think one of the problems is the sheer number of convenience stores. There are 154,195 convenience stores in the U.S. as of December, 2015 (NACS/Nielsen) and the site counts keep growing every year. Another possible problem could be the fragmentation of the industry. There are many regional players and only a handful of national players. Another problem is probably the speed of the transaction. We have all been in line at the grocery store and had that lady in front of us pulling a bunch of coupons out of her little pouch bag which simply slows down the transaction time at the register. That is not good for the convenience store. The average time it takes for someone to get in and out with a purchase at a convenience store is 3 minutes and 33 seconds (NACS). However, with the advent of the smartphone it becomes a lot easier to use a coupon. Digital couponing is basically changing the way we save money at the convenience store. The usage trend of all retail store coupons is definitely in an upward trajectory and it doesn’t look like it is going to slow down any time soon. Convenience stores account for 34.2% of all retail outlets in the United States (NACS). There is no other U.S. retail channel that is such an important part of virtually every community in the country and that is reflected in the overall dollar sales of the industry at $696.1 billion. Those sales represent about 4.1% of the entire estimated $17.7 trillion U.S. gross domestic product.

I think there is a marriage of sorts going on with convenience store coupons and the smartphone. It is estimated that upwards of 5% of sales transactions within the store will include a digital coupon of some sort by the year 2019 (Gasbuddy.com). It is predicted that there will be around 1.05 billion global mobile coupon users in the world by 2019. With the ease of use the GPS location features on smartphones and push technology getting better by the day it is no wonder why store coupon usage on your smartphone is on the rise. Digital coupon redemption is roughly 10% right now. While the old fashion print or paper coupons have a redemption rate of 1% or less. 90% of digital coupon users redeem their coupons within just a few days of receiving them on their phones. One would think that the redemption speed will only increase for the convenience customer and redeem them sooner. It’s all about speed of the transaction in this retail space.