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TSS ELECTRONIC COUPON-DISPENSING PROGRAM WITH LONG'S DRUG STORES

This article was originally published in The Tan Sheet

Executive Summary

TSS ELECTRONIC COUPON-DISPENSING PROGRAM WITH LONG'S DRUG STORES is slated to begin in May at store locations in the Bakersfield, Calif. area. Under a letter of intent agreement with Long's, Providence, R.I. marketing technology firm TSS Ltd. will conduct an eight-store demonstration with "The Savings Spot," an electronic promotion program that enables in-store distribution of coupons for packaged consumer goods. TSS hopes that a successful demonstration will lead to a rollout to all Long's stores. "The Savings Spot" is essentially a computerized "kiosk" the size of a soft drink dispensing machine that features graphic reproductions of coupons for up to 32 products. Customers press the picture of the coupon they want on the pressure-sensitive screen, and a coupon for that product is printed out. Usually placed near the entrance of a store, the terminal can offer cents- off coupons, contests and sweepstakes offers, and product rebates. Participating products also are promoted via in-store circulars, shelf talkers, and posters and banners, TSS said. Each set of 32 products displayed on the kiosk is replaced approximately every month by TSS, which designs and reprograms new graphic reproductions based on designs provided by the product manufacturers. TSS expects that the majority of products featured during the Long's demonstration will be OTC drug products and other H&BAs. TSS charges companies about $ 595 per month to have their product coupons displayed at "The Savings Spot." The firm said its program can generate a 40% coupon redemption rate versus the 1% return from free-standing inserts and other coupons. TSS maintained that "The Savings Spot" also allows stores to monitor buying and store traffic patterns, as well as the number of customers who convert the coupons into purchases. Products featured on TSS' machines include: Sterling Winthrop's Aspirin and Extra Strength Aspirin; McNeil's Children's Tylenol and Sesame Street vitamins; Bristol-Myers Squibb's Excedrin; SmithKline Beecham's Sucrets; Chese-Pond's Power Stick deodorant and various astringents, lotions and soaps; and Colgate- Palmolive's Colgate toothbrushes. In addition to Long's Drug, TSS recently signed a letter of intent to demonstrate "The Savings Spot" in 10 Caldor stores in the New York, New Jersey and Connecticut region. The Caldor test program, which will begin in August and span six months, is expected to incorporate coupons for local merchants in addition to national brands. To date, "The Savings Spot" has been set up in 155 Ralph's supermarkets in southern California and in 116 K-Mart stores in Michigan and Indiana. TSS said that it also has letters of intent pending for demonstration projects with three other supermarket chains, including Milwaukee-based Sentry Markets and Kroger supermarkets in the Dallas area, and with Payless Drug Stores.
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