Whole Foods has introduced digital coupons that are exclusive to its iPhone and Android phone applications, enabling shoppers to show a bar code at checkout to automatically apply eligible discounts.

The move is noteworthy as in-app digital coupons are still a challenge for many retailers because of legacy point-of-sale systems. In-app coupons are an important convenience for shoppers, who always have access to coupons since smartphones go everywhere they go these days.

“Digital coupons are a feature that we are asked all the time to do, but quite often the reality of it scuttles it as a feature in the end,” said Scott Michaels, vice president of client engagement at ArcTouch.

“What this means, is that Whole Foods has solved some real challenges,” he said. “They range from the checkout/scanning point of sale being able to scan from a backlit surface – the phone – and the coupon code/values being loaded into the POS to complete the redeeming for the shopper.

“What’s interesting about this approach, is that it’s from Whole Foods themselves which allows them to control the whole system. It also means that the hardware is now installed to make other digital coupons easier to redeem – from other vendors.”

Contextual relevance
Whole Foods recently updated its iOS and Android apps with digital coupons that can be redeemed in the store. Users sign in to the app to access the coupons and then show a bar code that appears in the app at checkout to have the eligible discounts automatically applied.

Offering in-app digital coupons speaks to how consumers are increasingly shopping, with a mobile phone in hand and looking for offers at the point-of-purchase rather than clipping coupons before they get to the store.

Underscoring the in-store relevance of mobile coupons, a recent study from Koupon Media found that 65 percent of convenience store shoppers who use mobile coupons redeem offers within five minutes (see story).

Digital coupons can also help Whole Foods meet the needs of the digitally savvy, millennial consumers who make up a large part of its customer base.

Modern POS
Bricks-and-mortar retailers are testing a variety of ways to bring coupons to shoppers on their phones while they are inside a store.

In December, Target drove sales of household products by placing signage in designated in-store aisles, prompting shoppers to text a keyword to a phone number to receive an exclusive mobile coupon (see story).

AMC Theatres appealed to teens in an attempt to drum up ticket and concession sales with digital coupons advertised through a promoted tweet (see story).

“Not all grocery chains are doing well at digital coupons, and the primary reason is that the point of sale is either mixed at the locations, depending on what year the hardware was refreshed or simply not ready to scan a phone,” Mr. Michaels said.

“To move forward with initiatives like what Whole Foods has done, requires investment into a more modern POS, which many chains are simply not ready to do until the current hardware is completely retired,” he said.