Jewel-Osco is back in the personalized discount business.
The Illinois grocery chain eliminated its loyalty card in 2013 in favor of offering the same prices to all. Now, with a new app, it has started to offer discounts and sometimes even free products to those who sign up and share their personal information. The move comes as use of digital coupons is growing at a rapid clip but accounts for a very small percentage of the billions of coupons redeemed each year.
Itasca-based Jewel-Osco has been advertising the new MyMixx service on its plastic grocery bags, and it has a prominent space on the store’s website.
Jewel-Osco called MyMixx an additional savings tool on top of “already low prices” in its stores, and the latest way the company is trying to build one-on-one relationships with customers. Marketing Manager Allison Lubersays thousands have already used the service, which launched in late January.
Personalization is critical as grocery stores try to cater to younger, tech-savvy shoppers, especially those who don’t get traditional newspapers and aren’t interested in spending time clipping print coupons if they do.
Last year, 2.84 billion coupons were redeemed in the United States, down from 2.9 billion in 2013, according to Inmar, a data firm that manages promotions for retailers. Traditional paper coupons, such as those found in newspaper inserts, still account for the largest chunk of the coupons distributed by brands and retailers and redeemed by shoppers. But the fastest-growing type of coupons are digital coupons. The use of load-to-card coupons, as Inmar calls them, doubled to account for 1.8 percent of overall coupon redemptions in 2014.
“You’re picking up a new generation of shoppers who probably would never have engaged with a newspaper,” said John Ross, president of the retail division at Inmar.”You’re also picking up a generation of shoppers who don’t want to work as hard to find discounts.”
The launch of the app comes about a year and a half after Jewel-Osco dropped its Preferred Customer Card, which offered users lower prices on some items in return for sharing personal information, such as a phone number. Jewel-Osco did away with that program after more than two decades, saying it had lowered prices throughout the store and that every customer deserved the same price.
Now, the chain is asking shoppers to share their name, email address, address and phone number with Jewel-Osco in to use MyMixx and get deeper discounts beyond the prices offered to the public at its 185 stores.
With MyMixx, users select the coupons they want to use on the app or on the chain’s website. When they shop, they enter their phone number at the checkout counter to apply the coupons and receive the discounts. The data is collected and used to create personalized offers on items and categories people shop the most. Also, Jewel can track how coupons are working. If it sees certain coupons aren’t popular, it can let the vendors know so they can devise better offers.
“It makes a lot more sense to give people the best price on the items that are most important to them,” said Jim Hertel, managing partner at Barrington-based Willard Bishop, a grocery consulting firm.
Sharing data in order to get deals is not a turn off to most, as long as it adds value to the shopping experience, other industry watchers said.
“So far, the vast majority of consumers are willing to share their personal information as long as the offers truly are targeted,” Ross said.
Plus, digital and targeted offers can cost less for manufacturers than classic mass discounting, he said. Inmar works with Jewel-Osco’s parent company in coupon processing, supply chain logistics and pharmaceutical returns.
Jewel dropped its loyalty card after it was acquired in 2013 by AB Acquisition, an affiliate of private investment firm Cerberus Capital Management.
These days, Jewel-Osco uses paper fliers, online coupons, weekly sales and other promotions as it works to remain relevant in shoppers’ minds, especially as personalized delivery services and chains such as Mariano’s, Whole Foods Market, Fresh Thyme and Heinen’s expand on its home turf.
Other chains have launched digital coupon services. Meijer lets shoppers browse and clip digital coupons through its mPerks service. With Target’s Cartwheel, an app the discount chain launched in 2013, shoppers select deals by searching for products or scanning item bar codes using the camera on a mobile device. Shoppers then present a unique bar code, either on a mobile device or on paper, to get the discounts. Target said more than 13 million shoppers have signed up for the service and saved a total of more than $191 million by using it.
The launch of MyMixx marks a bit of a return to electronic coupons for Jewel-Osco. Years ago, Jewel was seen as one of the leaders in electronic coupons with its Avenu service, said Jill Cataldo, who runs coupon workshops and has a nationally syndicated coupon column. The Avenu service was dropped a few years ago.
Cataldo says she held on to her Jewel Preferred Customer card after the chain eliminated discounts tied to the card. She was still presenting it until January in order to get deals through SavingStar, a digital coupon service that links to supermarket loyalty cards for additional savings.
Cataldo said she has seen a lot of what she would call “fun offers” through MyMixx, such as $5 off a purchase of $50, as well as giveaways such as a 12-pack of Canada Dry.
“When you give away free things like that it’s a great way to get the consumer engaged and get them thinking about checking those offers,” Cataldo said.
Still, plenty of shoppers are accustomed to bargain hunting, and eliminating that chase can turn them off. In 2012, J.C. Penney got rid of coupons and frequent sales under then-CEO Ron Johnson. The attempt backfired. Its revenue plunged, and the company brought back its tried-and-true strategy and a former CEO months later.
“People love a bargain, they love to feel like they’re getting a deal,” Cataldo said.
On the registration page, Jewel calls MyMixx “a savings personalization program that tailors coupon and sale offers to you.” MyMixx is set up to be used on mobile devices, but can also be accessed on a computer for those without a smartphone.
Still, while “mobile is the rage” when it comes to marketing and promotions, the challenge will be trying to get enough people using such personalized offers that their use really moves the needle in terms of sales and market share, Willard Bishop’s Hertel said.
By his calculations, traditional grocery stores have been losing about 1.5 percent of their transactions annually to challengers ranging from discounter Aldi to organic and natural grocer Whole Foods. Jewel declined to share specific sales figures, but said its customer counts and average transaction per customer are “trending positive.”
Jewel-Osco launched MyMixx in late January, following the lead of its sister chain Acme, which launched the program in the fall. Other sister chains, Shaw’s and Star Market, launched their versions in February.
Several early reviews of Jewel’s app in Apple’s AppStore reviews were mixed. Some praised the app and said it made shopping easier, while others said it was confusing. “Jewel, you shouldn’t make it more difficult to save and shop at your store,” one reviewer wrote Feb. 22.
Jewel’s Luber said the chain reviews customer feedback and is looking at updates to enhance MyMixx
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