I have a love / hate relationship with coupons. I love the savings, but I hate clipping them out and sorting through them at the check-out counter. It takes way too much time to organize and plan a shopping trip and speaking for myself, I want to get out of grocery store as soon as possible. Maybe I’d think of less than a chore and more of a game if extreme couponing could be done in Canada, but it’s very rare that you’d get your entire grocery cart for free up in the great white north. Last year I did manage to score a deal thanks to RedFlagDeals.com where there was a free coupon for a case of Nestea Iced tea when you purchased a case and nothing stopped you from picking up a case with another coupon in it. That day I managed to score 10 cases for the price of 1 which was fantastic! In general couponing just isn’t for me…
Or is it?
There’s a new App available on iOS and Android called Checkout 51 that promises to revolutionize couponing. No longer will you be slaving away at cutting out tiny pieces of paper and organizing them into giant folders to take on your grocery trip that you’ve been planning for weeks. All you have to do is:
- Use their app to view their cashback offers.
- Go to the store and buy what interests you.
- Take photos of your receipts and upload them.
- Once you’ve accumulated $20, they send you a cheque.
You don’t need to itemize, highlight items, or do anything but take a photo of the receipts and upload them – their character recognition software determines what you’ve purchased and credits your account. I wish the expense reports for my business trips were this easy! They’ve even taken into account snapping photos of extremely long receipts as well.
Time is Money
For the consumer this is fantastic. Not only do I typically forget which coupons I have (I have a drawer full of expired ones), but I’m sometimes frustrated at stores that don’t accept certain coupons. With Checkout 51 this doesn’t happen! I can easily see which deals they’re offering and it doesn’t matter which store I purchase it from. No more keeping track of expiry dates, no more store hopping (or chasing the deal), no more clipping things out of newspapers – I’ve reclaimed hours of my life and I’m saving money!
What’s the Business Strategy?
Checkout 51 does have a business model that is extremely interesting. Millions of coupons are printed and go unused everyday costing corporations money. Not only the immediate printing costs but the quality of data is poor considering the poor redemption rate. In 2011, the Full Standing Insert rate fell to 0.51% meaning that a good majority of them are being thrown away or discarded – it’s like voodoo trying to determine what the effect of a price drop does to alter consumer buying behaviour. Besides redemption, there is huge amounts of lag between the stores sending in their coupons and the data to be correlated. If you thought your network latency on World of Warcraft was bad, collecting good data from coupons in a timely manner is worse.
Electronic submission of receipts provides Checkout 51 and opportunity improve data collection and analysis. They can eliminate the lag time and display redemption rates in real-time – that information is worth a lot of money to consumer product companies. Not only can they track redemption rates, they’ll be able to determine which geographies have greater price sensitives to a product/service that their customers can take advantage of. Better yet, they’ll know which stores are attracting larger sales than others and may even uncover unexpected sales outlets as it doesn’t matter where the product is purchased. Data will be coming from any store, regardless if it’s a major chain or not.
Can they Survive?
What Checkout 51 will have to do is make sure that they’re data collection and redemption model is the easiest on the market. This will drive consumers to their app versus the several hundred clones that are most likely being coded as I type this article. Their key for long term sustainability will be their analytics engine – being able to report and visualize coupon redemption rates in real time in new and innovative ways will keep their competitors at bay. But one thing is for certain – they found a problem in the market that has been dying for an innovative solution.