Checkout Coupon Company Joins Boom in Online Discount Offers

By STUART ELLIOTT

A COMPANY long known for providing shoppers with coupons at store checkouts is joining the popular, crowded category of online coupons.
The Catalina Marketing Corporation is introducing Coupon Network by Catalina, to be found online at Couponnetwork.com. Advertisers with offers on the Web site include pantry mainstays like Campbell Soup, General Mills, Kellogg, Kraft Foods, Nestlé, Reckitt Benckiser and Unilever.
There are also some unexpected offers on Couponnetwork.com, among them savings on toys from the Fisher-Price division of Mattel and light bulbs from General Electric.
Coupon Network is an addition to the decades-old businesses that Catalina calls shopper-driven marketing, intended to help advertisers more efficiently and effectively reach target audiences. Catalina estimates that it distributes more than $6.5 billion in coupons to shoppers each year through its printers at store checkout counters.
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The checkout coupons provided by Catalina compete for consumer favor with coupons in free-standing inserts, which are the coupon booklets carried in Sunday newspapers; coupons in magazines and so-called penny-saver publications; and coupons distributed by direct mail.
Catalina is so well known for checkout coupons that many devoted couponers, as avid discount-seekers refer to themselves, call the offers “Catalinas.” There are few higher accolades in marketing than a brand becoming synonymous with a product, whether it is Band-Aid, Kleenex or Q-Tip.
Still, the online coupon field is alluring, because it is booming. Two factors are feeding its growth.
One is the increasing influence of the Internet in everyday life. Not only are there printers in millions of homes, readily printing out coupons from Web sites, but there is also the phenomenon of social daily-deal coupons from companies like Groupon and LivingSocial.
The other factor benefiting online coupons is the recent bumpy economy. Coupon redemption rates had been falling for decades until the recent recession.
Although online coupons account for only 1 percent of all coupons distributed, they account for about 10 percent of all coupons redeemed, said Susan Gear, group vice president for digital at Catalina in St. Petersburg, Fla.
Ms. Gear also noted that consumers “can print out coupons for exactly the products they want,” which adds to their appeal.
For some time, Ms. Gear said, Catalina had been considering an entry into the online coupon realm, joining Web sites like Coolsavings.com, Coupons.com, Couponmom.com, Redplum.com and Smartsource.com.
The idea gathered momentum after Catalina took technological steps in the last couple of years that included offering coupons by mobile e-mail, handling Target’s coupons section on its Web site and acquiring E-centives, an Internet coupon company.
In developing the Web site, Catalina consulted with advertisers, retailers and bloggers, among them the “Super-Coupon Queen,” Jill Cataldo.
“They’ve got a lot of great printable coupons” on Couponnetwork.com, said Ms. Cataldo, of Huntley, Ill., who has a Web site, Jillcataldo.com, and writes “Super-Couponing Tips,” a nationally syndicated column.
Coupon Network “is doing a good job giving us coupons we might not have seen before and are pretty relevant to what I buy,” she added.
Those are welcome words to an advertiser like Karl Schmidt, director for promotional marketing at General Mills in Golden Valley, Minn. “We’ve been going digital with print-at-home coupons since tests in 2001,” he said.
“In the early days of print-at-home, six, seven years ago, there were issues with redemption,” Mr. Schmidt said, as retailers declined to accept them. As that largely disappeared, digital coupons have become “a significant percentage of our spending,” he added.
“We get great results; it’s the perfect self-targeting medium,” Mr. Schmidt said. “And they’re available 24/7.”
Also, “digital coupons attract younger consumers,” he said, “who aren’t buying the Sunday newspapers” that carry free-standing inserts.
In the digital coupon realm, Catalina executives “are playing come from behind, which they’re probably not used to,” Mr. Schmidt said. “But they have strong content and a strong sales force.”
Another point in Catalina’s favor is that Couponnetwork.com includes a type of Catalina in-store offer, called YourBucks, that are prized by couponers like Ms. Cataldo because they offer discounts off whatever they buy the next time they shop rather than savings on a single specified item the way regular coupons do.
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The retailers whose checkouts have been home to Catalina’s printers are unlikely to bemoan the company’s expansion online because they, too, have been going digital.
“More and more of our offerings are moving online as well, replacing circular coupons,” said Karen Meleta, a vice president at ShopRite, part of the Wakefern Food Corporation in Keasbey, N.J.
There is a section of Shoprite.com devoted to YourBucks along with other coupons.
Ms. Gear said Catalina has also been considering initiatives in areas like daily deals and group buying, adding, “We’re working with our clients to figure out how to market in this new world.”
“There’s a fun, engaging, gaming element to couponing,” Ms. Gear said. “We are exploring how you take the concept of social networks and add that to it.”
Among the attractive aspects of how social coupons work are the “element of urgency to the daily-deal buying,” she added, and their interruptive nature as companies “send out texts or e-mails.”
Because Catalina is privately held, she added, the company would not disclose how much it has spent on developing Coupon Network. Catalina is owned by the investment firm Hellman & Friedman.