This presentation provides an overview of the emerging markets for digital coupons in the supermarket and grocery retail channels. It also covers the clearing and reimbursement model for digital coupons.
2. ProLogic Overview ProLogic is one of the leading coupon clearinghouses in the industry Over 40 years experience in the coupon processing business ProLogic processed over 1.1 billion coupons in 2009, which equates to about 35% market share We manage over $1.5 billion in transactions for our customers The only coupon clearinghouse exclusively dedicated to retailers and wholesalers Not a “manufacturer’s agent” Singularly focused on the success of the retailer An early adopter in digital coupon clearing Launched one of the industry’s first digital coupon programs with Shop ‘n Save over a year ago ProLogichas processed over one million digital coupons
3. Digital Coupon Definitions Internet coupons Consumers can download coupons from Internet and print at home Redeemed and processed just like any other paper coupon Technology ensures that coupons printed only once, protects against fraud Accepted at most retailers today Not really considered “digital” since they must be printed in order to be redeemed Digital coupons redeemed via grocery loyalty card Consumers select coupons on a web site which are loaded onto their grocery loyalty card Discounts are automatically applied when consumer uses loyalty card at retailer (coupons never exist in paper form) Digital coupons redeemed via a mobile device (cell phone, key fob, etc.) Consumers select coupons on a web site which are loaded onto a mobile device such as a cell phone or a key fob Mobile device is scanned at checkout counter to activate coupon Potential issues with reliable scanning of non-standard interfaces such as cell phone screens
9. Benefits of Digital Couponing A new way to deliver discounts to consumers How, when and where they want to receive them More convenient for consumers No need to clip, save, remember, file, etc. Reach a younger generation of consumers 60% of Cellfire’s users are under age 35 Faster reimbursements from manufacturers Reduced processing time compared to paper coupons, fewer denials and mis-redemptions Potentially more information available through digital coupon redemption compared to paper coupons Page views of digital coupons (impressions) “Clips” of digital coupons (interaction and selection) Redemptions of digital coupons Better for the environment (paperless) Eliminates printing, shipping, and waste disposal of paper coupons
11. Who’s Who in the Digital Coupon Market Manufacturer Content providers that bring digital coupon offers, manufacturer-focused Integration with loyalty card or POS system, retailer oriented, no offers Retailer
13. How Does Digital Coupon Clearing Work? No paper involved for coupons loaded onto loyalty cards or cell phones Digital coupon publisher provides offer information to retailer and retail clearinghouse Retailer provides redemption information to retail clearinghouse Clearinghouse validates offers and generates invoices to manufacturers based on redemption files Clearinghouse provides reporting back to retailer
14. Benefits of Paper Clearing Process Independent of both retailers and manufacturers Well-understood & documented processes Externally-audited processes (SAS 70 reports, ISO 9001 certification) Detailed reporting Able to handle huge volumes Efficient and cost-effective Established relationships throughout the process enable rapid resolution of disputes
15. The Digital Coupon Clearing Process Digital coupon publisher Retailer Manufacturer Agent Sends offer codes Sends invoices Returns offer code status Sends redemption files Sends payments or denials Validates redemption files
20. YOU Technology hosts the digital coupon website and therefore provides ProLogic with both the offer files and the redemption files
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22. Economics of Digital Coupons No shipping or HTH fees for digital coupons Fewer denials and issues with manufacturers? Manufacturers continuing to pay the 8¢ per coupon, for the time being Clearinghouse costs are a function of IT investments as opposed to facilities, labor and freight Will mis-redemption and fraud increase or decrease? Basket contents must match offer exactly No potential for cashier override
Editor's Notes
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process
Complexity of navigating the redemption processChallenge of fairly representing stakeholder in qualifying and reimbursement of couponsAnd intermediary plays an invaluable role in advocating for the retailer in this process