Dive Brief:
- Kroger announced the sale of You Technology, its digital coupon and rebate publishing unit, to technology and marketing firm Inmar. The deal also includes a new strategic relationship with Inmar that entails a long-term services agreement allowing Inmar to continue the delivery of digital coupon and rebate management services to Kroger.
- YouTech is a cloud-based digital offer platform that was acquired by Kroger in 2014. YouTech’s technology in conjunction with Inmar’s expertise in managing open platforms will expand the retailer's coupon and rebate distribution to even more retailers.
- "This services agreement supports Restock Kroger, namely the partner for customer value and redefine the grocery customer experience drivers," Yael Cosset, Kroger's chief digital officer, said in a statement.
Dive Insight:
Kroger’s Restock initiative is aimed at strategically investing dollars into growth streams and pulling dollars from less-promising channels. So while the retailer wants to continue deploying digital coupons and other offers, owning the operation isn't worthwhile moving forward. Kroger wants to put the responsibility in the hands of a specialist.
Paper coupons are still more widely used than digital. According to a survey conducted by Inmar, significantly more people use paper over digital, but the majority of respondents use both. However, 53% expressed the desire for all coupons to be digital. The same survey found that four out of 10 people bought more than they intended to because of a deal.
Although retailers still accept printed coupons, many have expanded their digital coupon efforts by offering exclusive deals on their specific platforms. Target, for one, recently merged its Cartwheel app with its main Target app to create a seamless experience for digital couponing. By offering the most savings via its app, Target drives customers into its stores.
Previously, Target had partnered with Catalina, a marketing and coupon company that is best known for printing coupons at registers. But that partnership recently ended, and Catalina has filed for Chapter 11 bankruptcy. Its once revolutionary technology in 1983 is now on its way to becoming obsolete as marketing spending shrinks and continues to shift to digital channels. Catalina acquired digital coupon provider Cellfire to gain more control of the digital coupon space but was outpaced by other companies like Inmar and YouTech.
To avoid having to create their own platform or in addition to their own, many retailers have also partnered with third-party cashback apps like Ibotta which allows customers to take a picture of receipts after purchase and credits any rebates or offers to their account.
The combination of YouTech and Inmar gives Kroger access to two digital coupon and rebate units. In addition, it takes the pressure off of the retailer to create a powerhouse digital coupon service, allowing it to focus on more lucrative projects like its driverless delivery or autonomous fulfillment centers.
