SavingStar CEO David Rochon says that his company is poised to disrupt the "arcane and monolithic" grocery couponing industry with a national plan to link real world shopping to social currencies.
Though not quite there, the innovation Rochon has in mind is one that links consumers to brands and lifestyle choices they are passionate about by virtue of virtual currencies.
The strategy could involve the evolution of a Facebook virtual currency, which would enable brands to discover the passionate interests of those consumers and link them to the right offers.
According to Rochon, who formerly served as President of U-Promise, the current plan is to use a national network of over 24,000 retail outlets (not all of them in the same brand or chain) and distribute virtual coupons to customers, using data gleaned from shopper loyalty cards to create rewards exchangeable for accrued points.
Buddy Media CEO Michael Lazerow just joined the company's board, so that should signal a tight focus on strategy that relies on virtual communities and social networks.
"We should be delivering coupons to consumers that are relevant to their interests. It's a step function change to what is currently available," Rochon says in a phone interview Friday.
The news that Zynga is filing an IPO will make anyone sit up and take notice of this other story that has happened in the coupon space. The other shoe is just about to drop. If you want to know the future of couponing, it's in the link between shopping in real life, and the virtual commerce markets that exist, or will begin to exist, within the social networks.
Rochon says that delivering digital coupons to consumers will eventually enable consumers to rack up digital points, or social / virtual currency dollars, which consumers can then collect to use with other companies. This kind of behavior works best when the social network of their choice enables them to use virtual currencies to buy experiences, items, or other virtual goods, something that the world's largest social network platform, Facebook, does not currently allow.
I can envision the opportunity. It's a digital currency and that's for a consumer's choice. it's consumer choice about where you want to shop. Today, we have a network of thousands of stores, and you receive the value in the way that you want to receive it. I can see us working with Facebook to allow members who want to buy a virtual pig or use the currency that Facebook would potentially want to make available for their consumers.
This makes even more sense if you consider that in 2009, grocery outlets were responsible for spilling out into the world 360 billion paper coupons. Most of them were thrown away. and 90% of them were distributed in Sunday newspapers. We have seen the figures that show us where the print newspaper industry is headed.
The idea of having a model that allows for consumers to transfer shopping experiences into branded relationships and then spending currencies meaningful to those brands should entice retail owners. Zynga, anyone?
So, how will SavingsStar implement this? According, to Rochon, it's a process of using an "aggregated" collection of supermarkets around the country and collecting their data, and distributing to their customers. Think of couponing being a publishing industry of its own, rather than operating on the back of the newspaper industry.
"We have aggregated 24,000 supermarkets that provide us data on UPCs being purchased in the stores, tracked by your supermarket loyalty cards," says Rochon. The stores then pass up that data to SavingsStar and "We are then able to market to customers. We post the reward to your account, and then you get to choose the value you want."
The rewards and value of this process has to do with consumer interests and "passions," says Rochon.
In the future, we are going to offer more consumer options--like conversion to airline mileage programs, so you can shop for groceries and save miles to go to a family trip, or Facebook credits, if that store has the capability of doing that. Where everyone else is just focused on discount element at point of sale, we create the national network and deliver different options to consumers.
As time goes on, Rochon says, the company will be distributing white label opportunities to "very large organizations." Is he thinking about Wal-Mart? American Airlines?