P&G and Kroger Call It Quits on Coupon Partnership

Dispute Over Whether to Redirect Consumers From Retailer's Website Leads to Split Despite Program's Success

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BATAVIA, Ohio (AdAge.com) -- Kroger and Procter & Gamble Co. are ending their electronic-coupon partnership at year's end despite its apparent success, after a tug of war between arguably the top manufacturer and top retailer in package-goods loyalty programs.

P&G was getting a lot more out of the relationship than Kroger was, with almost 24% of referrals to PGeSaver.com coming from Kroger.com in November.
P&G was getting a lot more out of the relationship than Kroger was, with almost 24% of referrals to PGeSaver.com coming from Kroger.com in November.
P&G e-mailed consumers enrolled in its eSaver electronic coupon program earlier this month to tell them they would no longer be able to download coupons to their Kroger Plus and other affiliated card programs for instant redemption after Dec. 31.

P&G began the test with Kroger two years ago, and a spokeswoman said in an e-mail the company was pleased with the results. But Kroger wanted to stop redirecting consumers from its site, Kroger.com, to PGeSaver.com, instead keeping them on the Kroger site to load coupons. It's a request two other partners in Kroger's e-couponing program -- AOL Shortcuts and mobile coupon player Cellfire -- agreed to, but P&G wouldn't, a Kroger spokeswoman said.

"We'll continue to partner [with third parties on coupons] but as we move forward, we are going to have coupon offers available on Kroger.com where people who have Kroger loyalty cards can see all offers available to them," she said. "We think it's more convenient for customers to show them all offers all on the same platform."

Traffic wise, P&G was getting a lot more out of the relationship than Kroger was. Data from TNS Compete show almost 24% of referrals to PGeSaver.com, with 1.3 million monthly visitors, came from Kroger.com in November. But PGeSaver or other P&G sites accounted for somewhere less than 3.9% of referrals to Kroger.com, with its 2 million monthly visitors.

Safeway, the other retail partner with PGeSaver at this point, doesn't appear nearly so active, accounting for only 4% of referrals to the P&G site, according to Compete.

P&G said it couldn't comment on the background of the decision because it doesn't talk about customers, but a spokeswoman said, "We are excited about the future of eSaver and other online coupon programs."

The e-couponing breakup indicates one of the hurdles P&G faces as it prepares to substantially ramp up e-commerce both on its own sites and elsewhere: Retailers won't readily share their consumers or their data.

Making the breakup a tad more interesting is a recent executive move. Gary Cofer, who had been North American VP-sales (Customer Business Development) for P&G, left in September to become global exec VP overseeing the manufacturer practice of Dunnhumby, which is Kroger's relationship-marketing shop, owned 50% by the retailer. Spokespeople for P&G and Kroger said Mr. Cofer's move was not related to the e-coupon decision.

Regardless of who benefited more from the relationship, it's pretty clear a rising tide of e-coupons lifted all boats. Traffic to PGeSaver was up more than 600% last month over a year ago, while traffic to Kroger.com, Shortcuts.com and Cellfire.com rose 31%, 114% and 522%, respectively. P&G's site drew almost as much traffic as the 1.4 million visitors to Shortcuts or the 900,000 visitors to Cellfire, with the latter two serving coupons predominantly for General Mills and Kimberly-Clark Corp. brands.

All three are smaller than the granddaddy of e-coupon sites, Coupons.com, with its 14.6 million monthly visitors, according to Compete. But the load-to-card players have been growing much faster. Coupon Inc.'s site, with its predominantly print-at-home coupons, increased traffic only 7% over a year ago.

Coupons.com serves a broader array of package-goods players and manages the print-at-home coupon galleries for several retailers, including Kroger, CVS, Walgreens, Kmart, Safeway, HEB and most recently A&P. It also runs save-to-loyalty-card coupons, and last week introduced an iPhone app that lets consumers use their phones to display scan-able coupons at checkout. Coupons.com was the only coupon site that ranked in the top five referrers for Kroger.com last month, per Compete, accounting for 3.9% of referrals.

Despite recession driving increased interest in online coupons, redemptions of print coupons stayed relatively flat. Print coupons have become an increasingly endangered species, as Sunday newspaper circulations and readership by Gen Y shoppers decline. But P&G long has avoided print-at-home online coupons out of concern about fraud, though its brands often distribute coupons by mail to those who seek them online.

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