Kroger: Digital Won’t Replace Paper, Until All the Old People Die

Digital coupons – the kids love ’em, we’re told. But does your great aunt Ethel?

In certain marketers’ and retailers’ zeal to save the trees, retire the scissors and get us all to go digital, few seem to be considering our older friends. You know, those who think a smartphone is one that you can dial without having to call an operator first, or that a tablet is something that Moses carried.

The two top grocery chains in the country both have well-established digital coupon programs, but each also has a very different perspective on when it will be time to go all digital – whether old people like it or not.

For Safeway, that time is now. Its CEO predicted last month that digital coupons would virtually eliminate paper coupons within five years (read: “Safeway Chief Predicts End of Paper Coupons”). Safeway is also making plans to do away with printed weekly circulars (read: “The End of Supermarket Circulars?”)

Kroger is adopting a more moderate position. “My mother-in-law doesn’t have a smartphone,” Kroger CFO Michael Schlotman told a retail conference in Orlando yesterday. “She doesn’t have an iPad and barely turns on the computer that she has. So we have little hope of engaging someone like that digitally. But we don’t want to ignore them as a customer.”

In December, Kroger marked a milestone of more than 500 million digital coupons downloaded. But Schlotman pointed out that the company still sends out more than 9 million mailed offers to households each quarter. “We’re just going to let the customer decide how they want to interact and engage with us,” he said, “because there are plenty of customers out there who you just can’t engage with digitally.”

It’s not just a matter of older people like great aunt Ethel and Schlotman’s mother-in-law, though. There are also those with lower incomes who might not have access to mobile devices or computers. And everyone has to shop, and eat. Safeway CEO Steven Burd argued recently that Safeway’s Just For U digital program “applies to people of virtually all income levels… even the so-called top 1%, they’re using Just For U because they all have iPads, they all have iPhones.”

But many shoppers don’t. And even many who do, don’t necessarily want to see paper coupons disappear. “It actually is quite easy to move that over digitally if we wanted to flip that switch,” Kroger’s Schlotman said of transitioning the store’s paper offers to digital. “As we go down a path of allowing that customer to get it digitally, do they want it just automatically loaded onto their loyalty card so they don’t have to carry the coupon? We’re going to let the customer decide.”

Letting the customer decide – a quaint notion. Just, apparently, like paper coupons themselves.