New POS Trend to Watch: Digital Couponing

Cigarettes, Non-Tax Price Increases, Price Promotions

The tobacco industry spends over 91% of its marketing dollars at the point of sale, including expenditures on coupons to reduce the retail cost of tobacco. They know that price is one of the most powerful influences on tobacco use. In 2013, the tobacco industry spent $32.2 million on coupons for smokeless tobacco, and over $248.8 million on coupons for cigarettes, which is up from the $239.6 million spent on cigarettes in 2012.

spot_you_moreNow, as detailed in “Cigarette couponing goes mobile”, a new article published online in the journal Tobacco Control, the tobacco industry is promoting the use of a different kind of coupon. Altria and Reynolds American have both started offering digital coupons (e.g. $1.50 off one pack) that users can redeem using a smartphone. These can be sent to them via text, e-mail, apps, and/or social media.  Altria’s MHQ app even uses the GPS built into smartphones to identify tobacco retailers that are located nearby the user that will accept the Marlboro coupon. The coupons can then be scanned in-store.

R.J. Reynolds has invested in new technology to facilitate the use of these coupons – their “Spot You More” standalone device that retailers can place right at the register to scan the digital coupons.

The authors suggest digital coupons may be a new way for tobacco companies to effectively reach millennials. What’s more – they’re working. The introduction of digital coupons and was associated with a 6% increase in sales of Camel cigarettes.

Laws that restrict tobacco marketing may need to be updated to account for mobile and digital marketing. Some localities such as Providence and New York, and states such as Massachusetts, have enacted laws to prevent this marketing strategy by:

  • prohibiting the redemption of coupons
  • prohibiting sampling
  • strengthening minimum price laws so that they exclude price discounts from the calculation of minimum price

Learn more here about ways to restrict POS promotions.

Seidenberg AB & Jo CL. (2016). Cigarette couponing goes mobile. Tobacco Control, Epub ahead of print. doi:10.1136/tobaccocontrol-2016-052996 is a project of Counter Tools. Counter Tools (logo)
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