Catalina Program Gives Shoppers Peek at Next Week's Deals

Checkout Program Aims to Address Declining Reach of Newspaper Circulars

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Catalina is launching a program that gives shoppers personalized previews of next week's deals from store circulars as they check out. It's a move aimed in part to address the shrinking reach of printed circulars.

Numerous websites and blogs already preview deals that will show up in Black Friday circulars or newspaper coupon inserts a week or more in advance. But the Catalina program, dubbed "My Favorite Deals," looks to make the practice legit -- and systematic.

Testing so far indicates it has wide appeal, said Todd Morris, president of Catalina's U.S. business, increasing sales of promoted items by 1.5% to 5%, and overall sales to shoppers reached by 1.5%. The idea is to encourage them to come back more regularly to get the deals they know are coming.

Every shopper enrolled in the loyalty programs of participating stores is shown five offers for the week ahead when they check out, using printouts from Catalina's Checkout Coupon system. But Mr. Morris said the offers would also be available to people on desktop computers or mobile devices when they log into their loyalty accounts.

The deals will be customized based on what and when shoppers purchase. The number five was chosen based on research finding that was the average number of offers most people care about from the 100 or so frequently found in a circular, he said. That's not surprising, he added, given that the average shopper makes all purchases annually from a narrow group of only 0.7% of items carried in a store.

Timing is important too, he said. "If we know someone tends to have a 180-day purchase cycle for a particular product, we want to make sure we're showing them the offer on day 175, not day 185."

Retailers spent $5.8 billion on newspaper circulars last year, according to Borrell Associates, but newspapers reached only 23% of the U.S. in 2012, down from 41% a decade earlier, according to Pew Research.

Catalina has found that 66% of shoppers typically don't buy a single item from a traditional ad circular in a given week, but hopes to increase that number by reaching essentially all of a store's shoppers with My Favorite Deals.

Even so, Mr. Morris said the idea is to supplement, not replace circulars. Participating retailers will ultimately decide which brands participate and how much they pay, he said, but he expects the system may make it more cost-effective for smaller brands that reach more niche audiences to participate than broad-reach circulars do.

So far, two U.S. retailers are using My Favorite Deals regionally and one European retailer is using it nationally, Mr. Morris said, but Catalina isn't authorized to say which are involved. He's hoping to expand the program to a much broader swath of the 28,000 supermarkets, drug and mass-merchandise outlets served by Catalina Checkout Coupon machines now.