Review of Cartwheel, the savings app by Target

If you are not familiar with it, "Cartwheel" is the savings app owned by Target. They took a little bit of a different spin than most of the other apps out there. While most revolve just collecting coupons or earning points, Cartwheel works a bit differently.

How it works

When you first open the app you start off with a certain number of slots to put "offers" in. You are able to search through the variety of offers and add them to one of your slots. The catch is that you can only have as many offers as you have space for. While there can be a wide range of items depending on the day you are looking, some of them can be rather narrow (buy this specific color or this specific size). However, the trade off is value for selection. The branded items tend to be more specific but much larger discounts (up to 50% off) while the more generic things like Target-brand milk or eggs, are much more open but have smaller savings (ususally 5%).

  

Once you have collected all of the offers you want, you go back to your home screen. The app generates your own personal bar code that the cashier will scan at the register. This is cool because it saves you the trouble of scanning all the individual offers. Each offer in your slots is all tied back to this one bar code so you have just the one code to scan no matter what your offers are or how many you have.

After the cashier scans the code, the dollars come right off of the actual transaction while it happens. Being able to do this in real time is something that most of the other apps cannot do. It is convenient, but the only reason they can do it is the ability to tie so directly into their sales software. This means that this same kind of "real time" savings is almost impossible for any app that crosses over retailers. Since this app is just for Target, it's convenient but is obviously limited in terms of usage. Every time you use an offer, the amount you save will be added to your total so you can see how much you have saved over time. As you save, you earn more slots for offers and you earn badges as you reach certain levels.

The Good

There are definitely thinks I like about Cartwheel and it is probably my most used savings app. I like that there are certain items that are huge discounts. I have been using it for six months and saved about $500 but that is because I caught Rosetta Stone and a smart watch for 50% off. If you are an opportunist, these can be great.

I also like that everything is on one bar code. While you still need to put the time in to find the offers, you can at least easily redeem them (if you can find the items and remember to scan). This is definitely a step in the right direction from coupons. On that same note, having it on your phone is nice so you can search, select, or change the offers right in the store (while not being convenient, it is useful)

The Bad

There are also things I do not like about the app. First, the relevance of offers is sometimes just not there. I see a ton of items that I'm guessing are going to be clearance soon and this is a last chance to move them. These are things like kids movies or baby food. While many customers do want these, I'd expect my app to understand the things I buy a bit better.

The amount of effort need to find offer is also something to consider. Here is how my usual trip goes:

-10 mins filling slots with offers (say 15 slots)
-30 min finding the specific items in-store
-half the items are out of stock or I cannot find them
-15 min in-store looking like an idiot on my phone trying to find different offers
-15 min finding the new items
-Cashier won't remind you to use Cartwheel so I forget to scan about 25% of the time

As you can see, it can easily turn into a lot of time. I have not had a trip yet where I was able to easily and quickly find the items that corresponded with the offers I had selected. The only time it goes quick is if you spot something ahead of time and go in for that one specific item, like I did with this G Watch.

In Conclusion

Overall, I do think Cartwheel is one of the better savings tools out there. I think it has potential to save you lots of money on the right things, but I would suggest browsing through to catch that one or two big items rather than try to nickel and dime the daily items. For me, it just isn't worth the time or effort to use regularly. I do look at it regularly to keep an eye out for smoking deals, but I stopped using it for milk and eggs. If you decide to start using Cartwheel, I suggest you look at it as a way to get a great deal every now and again rather than a long-term way to decrease grocery expenses.

Thanks for reading!

Chris@Scannibal

What is your time worth?

Have you ever thought about how much time it actually takes to save money on anything? For the most part, it takes a good amount of time to see any sort of savings when you go shopping. This is absolutely by design. The brands who are making the coupons are focused on how long they can "engage" you. Did you know that the ads you see on pretty much every website on earth pay based on the number of seconds a person views it? Seems crazy, doesn't it? Same goes for the coupons in the paper: the goal is exposure.

Repetition, repetition, repetition

The idea behind focusing on exposure is the good ole' principle of repetition. The more we see or experience something, the more of a spot it carves out in our subconscious. Have you ever seen those scary clips of the guy with his eyelids help open being shown propaganda films? You may think that is extreme, but it's the exact same psychology that is behind advertising: the more you see it, the more it gets ingrained.

Passive v. Active

Now, while this applies to all advertising, the engagement we are talking about with coupons is a bit different. In the case of the ads on TV or on websites, they are all passive. You see them (often not even realizing you saw them) and that touch point is their key purpose. Sure they are trying to encourage you to "buy" or whatever the case may be, but they are not looking for the same direct, immediate action. In the case of coupons, they ask much more of you. You actually need to seek them out.

But what does it cost?

Let's take the Sunday paper for example. Everyone loves thumbing through the ads. There are hundreds of hundreds of great deals in there! You might be tempted to think "there is so much value in here! of course it's worth clipping!", but we will look at all the steps that go into the process from beginning to end and then let's do some math.

Steps in couponing

1. Get a paper
2. Look through paper to find ad sections
3. Identify coupons of interest
4. Cut coupons
5. Read coupons for limit, exclusions, conditions, etc.
6. Go to the store
7. Remember to bring coupons
8. Find specific product the coupons pertain to
9. Make sure to buy in accordance with the coupon rules (see #5)
10. Remember to use all coupons when checking out

...That is a LOT of steps...

Now some math

Let's say there are 200 coupons in a given paper, you are actually interested in 5% of them (10 coupons), and the average discount is $1.00. So in theory, this paper is worth $10.00, right? This would be true if it were as easy as just having the coupons in hand, but unfortunately there are lots more steps between you and that $10.00. At this point you should be asking questions like "How much time will it take to get the coupons? How much is my time worth? Will I actually be able to get all $10.00 in discounts?"

Here are some quick estimations of the cost in our scenario (I used the average hourly wage as an estimate of the value of time):

1. Buy the paper ~ $1.00
2. Time to locate and clip coupons in paper ~ 15 min @ $25.00/hour =  $6.25
3. Extra time in the store searching for specific coupon items ~ 15 min @ $25.00 = $6.25
4. Additional dollars spent to reach minimums or limitations on the coupons ~ $2.00

Wait a minute...

In our quick example the total cost of those $10.00 in coupons is $15.50! That means using the coupons is actually costing us $5.50! Even looking at just the time involved, we would have been off spending those 30 minutes working (we would have earned $12.50 which is still $2.50 more than the $10.00 in coupons). That doesn't even account for the fact that the chances of being able to use all 10 coupons is slim. Plus, remember back to the goal being exposure? In our scenario you have now spent at least 30 minutes directly thinking about and engaging with the brand that sent out the coupon WITHOUT savings any money...Sneaky Sneaky

At the end of the day, the question is whether or not the coupons are worth the time it takes to use there. There are some instances in which they do, but for the most part I would argue that conventional coupons amplify the amount of time you spend thinking about a product without actually saving you a proportionate amount of money.

What do you think about the time coupons take vs. the money they save? Do you think they are a worthwhile pursuit? 

Thanks for reading!

Chris

Is "Loyalty" actually a good thing?

Loyalty used to be great!

Loyalty programs started out as a great thing. It used to be that a few businesses offered  what we would now call "Loyalty Programs" and they were often businesses where we didn't shop that often. They usually sold things that you wanted rather than needed and earning something felt like a treat. This makes sense. They want to encourage you to buy more than you normally would to earn the reward. At a time when there were fewer programs, earning that reward meant something.

Even if you ended up buying a bit more to earn that free item, it felt special. It was almost like you were one of the VIP customers who the business wanted to have a relationship with. It made you feel valuable as a consumer. Unfortunately, we have advanced to a place where "loyalty" has turned into a key marketing metric for almost every business. This means everyone has "rewards" and everyone wants to create repeat customers. This isn't always bad, but lets look a bit deeper.

Loyalty is everywhere

Loyalty programs encourage you to become habitual. Each business wants a bigger percentage of the dollars you spend. But what happens when every single business is offering their own program? Now, as customer, you need to keep track of everyone's individual card or points or rewards. The rewards themselves become somewhat commoditized and rewards become a de facto part of buying something. Don't worry, those discounts get planned into the prices and we just end up paying a higher price to compensate for the reward we think we earned.

How do customers win?

So what do we have now? We have a type of reward system that is no longer special because everyone uses it, customers who laboriously keep track of points or rewards across zillions of different mediums, and, worst of all, a shifting mentality that making customers repetitive is a good thing. This should scare us all as customers! It does't feel great being described as "repetitive", does it? The result of us being "repetitive" is that businesses can accurately predict what we will do and therefore they don't need to offer us much value to keep us coming back. They have us on the hook. So we are getting less value while being encouraged to minimize our choices. Am I the only one who is a bit uneasy about that?

Businesses should get better, not sneakier

Call me crazy, but doesn't it make more sense for the whole shopping environment if business are continually trying to improve their good or service as a means of retaining customers? Is it a good thing to have loyalty programs are used to try and compensate for businesses that have a hard time innovating or don't want to innovate? It might sound a bit dramatic, but in general I would say that as a customer, the kind of loyalty generated by conventional loyalty programs is driving value down, not up.

What do you think about loyalty? Please leave a comment!

Thanks for reading!

Chris

What is the point of marketing?

What is the point of marketing?

That sounds like a silly question, but I'm serious. What is the point of marketing? You might say "well that's obvious. The point of marketing is to sell products" and you would be partially correct You might think "marketing is how companies tell people about the products they make" and this is part of the story, but not the whole enchilada.

The real purpose of marketing is to separate emotions about products from the actual utility they provide.

Think about that for a second.

But wait...

Aren't most of the ads you see trying to create a feeling rather than give a holistic picture of what the product can actually do?  Every once and a while you see one that explains something, but for the most part the goal is to pique your interest by what they DON'T tell you and by evoking an emotional reaction. I often wonder why we don't look past these tricks and see the real motive.

I must say, I'm a bit biased being something of a pragmatist. For me, things are about function above all. I realize not everyone looks at the world this way, but for me this makes most of the ad and marketing realm feel squishy and sneaky. I never quite feel like I can trust what I'm hearing or what I'm seeing. We are not exactly talking about an industry with a track record of honesty. Most ads I see make me ask "what are they really trying to get out of this?"

"IT'S A TRAP!!"

Like we said before, the real motive is to separate feelings about a product from the function of a product. Put simply, marketing's goal is to make what should be a need-based or value-based decision and make it an emotional decision. With a good marketing campaign, you can easily cover up any shortcomings with the actual product. They have also come to find out that influencing emotions is much easier than improving the product. This makes the equation pretty scary for consumers.

This creates a world in where quality and value of a product have less influence on a purchase than does the impact of the emotional context they stick it in. For instance, let's say Starbuck coffee is average (IMHO). There is nothing special about their product yet they have grown to dominate the coffee market. How is this? Why aren't the places with better coffee winning? While there are a huge number of factors that come into play, marketing is a huge one.

We are talking about a business that has been able to use billions of dollars and a complex understanding of how our minds work to engineer emotional responses to their brand. All the sudden you have people selecting inferior products (often for more money) and ignoring products that offer a better value or would better meet their needs. Doesn't that seem irrational? It should. once a brand hits this certain "critical mass", the consumers stop really "choosing" because that brand has created an addict of sorts.

"If it ain't broke, don't fix it. Wait..."

With that in mind, I want to know why we don't have a better way to regulate the impact of marketing. It's great for businesses to be able to promote their good or service, but what happens when they get beyond promotion and into the realm of having consumers hooked or psychologically stuck? Shouldn't there be a way to help keep the balance of power when it comes to branding? How do we keep some semblance of consumer choice and decision making power when brands have such a dramatic ability to influence our behavior through driving emotions?

I will leave you with this final thought and I would love to hear opinions.

If the goal of marketing is to get us to make less rational decisions, why don't we change it?

Thanks for reading!

Chris

Rethinking Coupons

If you are anything like me, you look through coupons regularly. There are lots of ways they get distributed and it's a full time job trying to actively use them. When you think about the myriad of offers, the variety of mediums, and the vast number of retailers or products trying to get your attention, its not surprising that the majority of these get missed. This is particularly true if you are like me and end up grabbing one or two coupons you just happen to see. The fact is that, for most of us, 99% of coupons are useless.



Coupon distribution is changing

The way companies are sending out coupons has changed dramatically over the last few years. Gone are the days of the classic print inserts you used to make your Christmas list as a kid. I spent a few years working for a major retailer and I've seen the dramatic impact of how quickly these are becoming obsolete. While right now only 10% of coupons are digital, the use of online and mobile coupons is growing faster than any other segment.

Digital creates new challenges

The exciting thing about the transition of coupons from print to digital is the new found ease of access than many customers are experiencing. Its easier than ever to search for coupons you want and use them on your phone. In fact, there are many sites and apps that are aggregating digital versions of all the coupons that used to be (or still are) in print. Google "Best Buy Coupon" and dozens of codes and coupons are bound to show up. This does, however, create a new problem.

With the old print news papers, the only way to have an old coupon was to have an old newspaper. This make it much less likely to have an expired coupon as most papers are disposed of within a week of being received. However, in the case of digital coupons the lifecycles longer without the natural purging that came with print. Once a coupon is out there, it is much more likely to stay posted and in circulation long after it has passed expiration. This means customers have to put in the effort to make sure the offers they are collecting are valid. Believe me, it's a ton of work.

Digital coupons are still not easy to use

While there are many benefits that have come with the advent of digital, there are still challenges. It is still a ton of work to search for and collect coupons from a vast number of sites and apps. It is still a toss up whether the coupons you got are going to be valid. It is still a matter of taking lots of time and coordinating tons of  moving pieces for an often immaterial payout. There has to be a better way.

With all that in mind, I put a question to you: would you use more coupons if they were automatically generated all in one place, specifically for you, right on your phone? This means you would never have to cut, search, clip, or collect coupons every again. Personally, I need a way to take advantage of all the benefits and savings that coupons offer without all the effort. In that respect, I'm lazy. I want to sit back and let my coupons come to me. I want them to be valuable, I want them to be easy to use, and I want them to be relevant.

There is a better way

We are trying to build a way for you to anonymously use your spending history to create you own coupons in one single app. As you shop, you will earn coupons to the competitors of all the places you shop. For example, say you spend $100 at Wal-Mart. Scannibal would let you earn a percentage of that $100 back to other grocery stores in your area. What if you could spend $100 and earn back a full $100 in discounts and now have valuable coupons to every other grocery store within 10 miles? We think that would be pretty cool.

We want to hear what you think!

If you are someone who uses coupons of any sort, we would love to hear the good and bad parts of your coupon experiences. If you are someone who doesn't use coupons, we would definitely love to hear why you don't. If you are someone who is just a coupon and clearance shopping nerd like me, drop a line and lets talk savings!

Thanks for reading!

Chris
chris@Scannibal.com
http://scannibal.com