A New App Called Milk Helps You Save On Groceries, Without Clipping Paper Coupons

The creators of coupon-code finder Honey, which helps online shoppers save at checkout, have now launched a new app called Milk (mmm…milk and honey…) that lets you save at the grocery store. The app is now one of many aimed at helping consumers save on consumer packaged good purchases, even if they don’t have time for clipping coupons from a newspaper.

Today, there a lot of apps like Milk to choose from, including SavingStar, Shopmium, ibotta, Checkout 51, Shrink, and more recently, Groupon Snap.

These sorts of applications have emerged as a way to transition paper coupons, a marketing effort reliant on the dying newspaper industry, to a more usable, mobile format.

Honey co-founder George Ruan explains why there’s been such a rapid increase in grocery rewards app in recent months, saying: “Each year, 315 billion coupons worth well over $400 billion dollars are distributed. But only a tiny fraction is redeemed – 0.8% – and usage is dropping.”

Not only are newspapers struggling to maintain readership, people’s free time is also dropping, while their time spent using social media is increasing.

“For millennials, the time spent on social media each day is a staggering 5.4 hours,” Ruan notes. “The time commitment to keep track of, acquire, manage, and use grocery coupons is a hassle that is no longer worth it for most consumers.”

I consider myself an extreme couponer, so I understand the complaint. (I save half or more on my grocery bill using coupons, but don’t “stockpile” mass quantities of deals, like on that crazy TV show.) However, it does take a lot of time to clip, match-up, stack and organize your deals. Most people would be happy with just saving a little bit more at the register. And for people like me who go all in, these apps are just icing on the cake.

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In general, most of the grocery rewards apps work similarly. After shopping, you typically confirm your purchases matching offers in the app by scanning the product’s barcode, then uploading a photograph of your receipt. In the case of stores that offer store loyalty cards, some apps, like SavingStar, will apply the discounts automatically at checkout.

The new Milk app fits into this latter group as it, too, only handles digital coupons that are “clipped” to store loyalty cards. Other apps that credit you after you scan your receipt are really offering rebates that are presented like digital coupons, and Milk avoids these. That arguably makes it less useful to a wider audience, since many grocery stores have done away with loyalty cards in favor of systems that work only via phone numbers plugged in right at point-of-sale. (Loyalty card stores also allow you to enter your phone number at point-of-sale, but they still require the card as the first step to account creation).

However, for those who do shop at one of the over dozen chains that still use loyalty cards, like Kroger, Safeway, Vons, Fry’s, Tom Thumb and others, Milk is easy to use. You simply add your card to the app, then shop its deals. The app organizes its digital coupons into various sections, like baby, beverages, bakery, etc., allowing you to easily find relevant offers. You can add the deals to a shopping list in Milk, too, to help you remember what to buy when in the store.

saved_outline_screenshotWhile apps like ibotta use a pay for performance model to earn commissions on sales, Milk creators plan to charge a monthly fee for its service, which I think is a mistake. Couponers, whether digital or otherwise, are interested in cutting costs, not increasing them. Ruan says that beta testers saved on average $27/month using the app, which means regular users could still save more than they paid to subscribe, but this misunderstands the mentality of those who clip-and-save. And with a half-dozen plus competitors on the market, including web couponing giants like Coupons.com, SmartSource.com and others, many consumers may choose to skip the app that charges them directly.

Ruan notes that Milk doesn’t represent a pivot for Honey, whose browser extension has now been installed over a million times, has 300,000+ weekly shoppers, and has processed through $750 million of transactions. Honey’s users have saved over $20 million to date, he says.

“The only challenge was that the consumption behavior of grocery is different from what Honey users are used to and it was sure to cause confusion,” says Ruan. “For that reason, we decided to give the grocery app a different name. It’s an expansion of what we do at Honey – to save people money in fun and serendipitous ways.”

Milk is a free download on iTunes and, soon, Google Play.