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General Mills Tests Using Groupon to Drive Trials, Coupon Use

By Apr 26, 2011

In its first test of the power of social coupons to move consumer packaged goods, Minneapolis-based General Mills ran a Groupon deal on April 21 that offered coupon buyers in two cities a $40 Big G sampler pack for $20.

The offer was only shown to Groupon users in Minneapolis and San Francisco who logged into their local Groupon site looking for the Daily Deal last Thursday. The offer consisted of a sampler pack of 12 grocery items, including Betty Crocker Sugar Cookie Mix, a Wanchai Ferry Orange Chicken dinner kit, and sampler sizes of Green Giant Corn Niblets, Chex Mix and Hamburger Helper.

Consumers who bought the deal received an email requesting their information for free home delivery. The sampler basket will also contain a booklet of coupons to be redeemed for other General Mills products in-store, including nature Valley Granola bars, Suddenly Salad products, Yoplait yogurt Cups and Cheerios.

Merchants offering deals on the Groupon platform often place caps on those offers, and in this case, the General Mills offers sold out by about 11 a.m. in each of the local markets in which they were available. Caps in each market were apparently in the 4,500 range.

According to press reports, General Mills viewed this foray into social couponing as a test of its powers to build sampling and in-store redemption, not as a way to sell full CPG orders directly to consumers.

Social coupon power Groupon has worked with national brands before, including The Gap, American Apparel, Barnes & Noble and Southwest Airlines. But the deep-discount nature of its offers has until now been a barrier to participation by CPG companies, who are concerned that Groupon’s typical 50% discount rates will attract only short-term, low-value consumers.

The General Mills “basket” approach was hinted at by Groupon national sales senior vice president Lee Brown at the Promotional Marketing Association’s Integrated Marketing Conference earlier this month.

“That vision of the deal-seeker who’s sitting at the kitchen counter clipping coupons is not the audience that’s necessarily engaged on our platform,” he told an audience. “We have 40 million unique users in the U.S., and as we approach maximum scale by the end of the year, you’re going to see all kinds of people in that group—not just coupon clippers.”

“We’re working actively with CPG companies today on testing different ways of redemption, different types of opportunities to present offers that aren’t just the ‘light skimming’ of traditional FSIs,” he said. “The redemption rate for FSIs is 1% to 2%. How do we model that out for deep discounts and high engagement?

“We’re figuring out how to do that with online direct purchases. Can I do a $25-for $50 basket of health and beauty products that enables the CPG company to put in products that they want to get tried as well as goods they know that consumers are going to want to buy.”

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