Can Kroger Clip Coupon Value without Harming Customer Relationships?

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Perhaps this story should be filed under the category "All Good Things Must Come to an End." Kroger appears to be phasing out the doubling of manufacturers' coupons. The practice gave coupon users an incentive to shop Kroger as the retailer would match a manufacturer's coupon value, usually up to coupons with 50-cent face value. This week, Kroger's Central Division announced it would no longer double coupons in its 136 stores, located mostly in Indiana and Illinois. It joins the Houston and Cincinnati divisions in honoring manufacturers' coupons at face value only. Kroger officials said the reason for the change was that fewer shoppers are using manufacturers' coupons as they get more offers online.

Not a Popular Move
As you might expect, some Kroger customers are unhappy that their purchasing power has been blunted with coupons no longer being doubled. Social media reactions to the ending of doubling coupons indicate that some customers are sad, some are mad, and some believe Kroger is making a big mistake. Kroger's counterpoint to complaints about the end of coupon doubling is that it affects only a small percentage of their customers (about 7%). And, in place of forgoing revenue via coupon doubling the company will lower prices on "thousands of everyday grocery items." Thus, all customers stand to benefit from Kroger's policy shift, not just the 7% who were enjoying benefits of coupon doubling... at least that is the Kroger company line.

Overcoming Resistance to Change
A key to overcoming customer skepticism will be transparency. Kroger must make shoppers aware not only of the new lower prices, but the items with prices lowered must be communicated. One of the complaints from some shoppers in the markets in which coupon doubling has ended already in favor of lowering everyday prices is that they cannot see the impact of the new program. Perhaps most of the items with lower prices are not items these shoppers buy, but regardless Kroger must proactively show that they have permanently lowered prices on many items.

What Will Be the New Different?
Now that Kroger has decided to phase out coupon doubling in a third region and customers adjust to the new reality of no coupon doubling, what will the company focus on to differentiate itself in an increasingly competitive grocery market? Walmart and Target are aiming to take customers away from traditional supermarkets with low prices and a one-stop shopping experience. Publix has captured a position of best-in-class customer service. Kroger's point of difference? Well, it is big and getting bigger. Kroger announced this week it is buying the Harris Teeter chain. Unfortunately, being the biggest company in any category is not a very meaningful position to those who matter most: Customers. It's your move, Kroger. Show us the new different- how will you be remarkable? Kroger to Quit Double Coupons

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