Sometime last year, a tech entrepreneur named Noah Godfrey decided to take a closer look at the business of grocery-store coupons.
He wasn’t exactly wowed by what he saw. “Coupons haven’t changed much in 125 years,” he says. “You have to cut them out, file them.” His conclusion: the coupon industry was “ripe for some innovation.”
So Godfrey (centre in photo) teamed up with two business partners, Andrew McGrath (left) and Pema Hegan (right) to “revolutionize” the coupon game. The result is Checkout 51, a new mobile iPhone app that rewards people with cold hard cash when they buy certain brands.
The idea behind Checkout 51 is fairly simple: Consumer packaged goods companies offer cash-back deals on products ranging from bacon to tooth- paste. Those deals are then advertised on Checkout51.com and its app.
Consumers who buy the brands can then upload pictures of their grocery receipts to have rebates credited to their account. Once customers have a mini- mum of $20 in their account, they’re sent a cheque.
Checkout 51 made its debut on Apple’s App Store in December and quickly became one of the most downloaded free apps in Canada.
Godfrey thinks people are drawn to Checkout 51 because it’s easy to use. “Manufacturers pay us to distribute and process offers for them,” he says. “They only pay for offers that get redeemed.”
Companies that Checkout 51 has worked with to date include Maple Leaf, Kraft and Johnson & Johnson.
Godfrey and Hegan are no strangers to startups. In 2004, they created Dose, a weekly magazine that has since morphed into the online entertainment portal for newspaper publisher Postmedia. Next they set up GigPark, a social business recommendation service. It was bought, by CanPages, in 2009.
Since its launch, Checkout 51 has amassed a user base of 230,000 people and sent out nearly $100,000 in rebates.
Gary Ng, editor of mobile news website iPhoneinCanada.com, says the app is popular because it’s intuitive. “[People can] save easily on groceries and submit receipts digitally via their iPhone camera. It’s very seam- less for the end user.” Beyond that, he says, “nothing else is required.”
Ng is also impressed that big-name consumer packaged goods firms are signing on. App marketing can be relatively inexpensive, he adds, so brands are able to be more creative than they are with regular advertising.
“With traditional coupons, the brands felt limited in what they could do because there was a lot of sunk costs,” Ng says. “You have to print a huge number of them, pay to ship them, and then you have no idea what the uptake is going to be or when they’re going to be cashed in.”
One CPG that has been doing a trial run with Checkout 51 is Heinz Canada. The ketchup maker has allowed a few of its products to be featured on the app to help Heinz decide if it wants to work with Checkout 51 on an ongoing basis.
Heinz corporate affairs leader Joan Patterson says mobile apps are simply another way to reach the growing number of tech-savvy consumers.
“It’s a fact that Canadian shoppers are increasingly becoming consumers of social and digital media. They will be the ultimate judges as to the value of tools like the Checkout 51 app,” Patterson says.
Godfrey, meanwhile, has big plans for Checkout 51. An Android version of the app is expected in the near future, and Godfrey’s team is looking to expand to new markets. “We expect to launch in the U.S. by later this year,” he says.
Let the coupon revolution begin.