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Coupon-clippers can be clickers instead

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Associated Press / January 14, 2008

CINCINNATI - Some coupon users are clicking instead of clipping to get their grocery discounts.

Supermarket chains are trying out paperless digital coupons to help the thrifty-minded save time and money. Shoppers load the online discounts onto their store loyalty cards, receiving the credit at the checkout.

Grocers see it as a way to build customer loyalty, drawing consumers who are increasingly spending time online to their websites and ultimately to their stores. The move could increase coupon use by attracting shoppers who don't bother with paper coupons. It offers convenience for the companies in reducing the handling, tallying, and shipping of coupons, as well as cutting the use of paper.

Kroger Co., the nation's largest traditional grocery chain, and Procter & Gamble Co., the largest consumer products company, are partners in a digital coupon trial that began last month. Other supermarket companies have been trying out ways to offer digital discounts in addition to the traditional clip-outs from newspapers.

Although online coupons for ordering everything from DVDs to laptops on the Internet have been around for several years, couponing, especially for groceries, is still dominated by paper.

Some early users like the convenience of paperless coupons.

"You don't have to waste your time going through all those little pieces of paper in your purse," said Carol Hoffman, of Covington, Ky.

The digital coupons can't be doubled, but expiration dates still apply. Selections are limited during the initial trials, but companies expect to expand digital offerings soon.

Coupons for groceries date to the late 19th century, and industry experts say the majority of American households still regularly use them. Combing through Sunday newspaper coupons is still a ritual in some homes.

Annual savings are estimated at $3 billion, but that's a small percentage of potential savings from unused coupons, according to industry estimates of redemption rates as low as 1 percent.

"It's great to see the innovation, and I'm happy to see two big players taking a lead in that," Peter Meyers, vice president of the Toronto-based marketing firm ICOM Information & Communications LP, said of the Kroger-P&G trial. But he said it might take awhile for digital coupons to take off among grocery shoppers.

"If you're very computer savvy, this is probably a plus," he said. "But if you're more of a traditionalist, paper is familiar, and this is not."

Ken Fenyo, Kroger's vice president for corporate loyalty, said Kroger means to complement traditional paper coupons but expects to expand its current pilot program as part of its recently overhauled Web site.

Some grocers also offer in-store paperless coupons. Chicago-based Unicous Marketing Inc. said regional chains, such as Springfield, Mass.-based Big Y, are trying its EZ-PIC program in which "instant coupons" are advertised on store shelves and cut the item price electronically at checkout.

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