Target (TGT) has added digital coupons from manufacturers to its popular Cartwheel shopping app, an expansion that will mean savings will come in dollars and not just as percentage discounts, likely bolstering a tool the retailer increasingly relies on to cultivate customer loyalty.
With this pilot test, the discounter’s highly rated app is also likely to offer bigger savings since shoppers will now be able to digitally obtain many of the same coupons customers find in weekly circulars. Many of Target’s discounts clock in at 5%, a small amount for regularly purchased household items. Now, the app will allow shoppers to get discounts in dollars and cents on a larger variety products. Target said in a blog post this week that popular coupons out of the gate have included things like 50 cents off General Mills’ (GIS) Honey Nut Cheerios , and $1 off Edge shave gel, deals that are more than 5% the price of those items.
Cartwheel was launched in 2013, and quickly became a hit for Target, which at the time was well behind rivals like Walmart (WMT) and Amazon.com (AMZN) on the digital front. It has been downloaded more than 20 million times.
TechCrunch reported this week that Target is working with a coupon database rather than with manufacturers directly to get deals. Currently, there are about 40 digital coupons of this nature available in the app.
Digital sales rose 34% over the holiday quarter, and a growing number of such sales are done via app. But in stores, Target shoppers are increasingly using their smart phones as they shop. And use of Walmart’s shopping app exploded during the holiday. What’s more, even indirect rivals like Kohl’s (KSS) and J.C. Penney (JCP) have added coupons to their apps, adding to the pressure on Target to keep updating Cartwheel.