SKUx, the fintech company pioneering the use of blockchain to transform the promotional coupon into a form of payment, came out of stealth mode this week with ambitions to disrupt what it called “archaic” practices around offer and incentive origination and redemption.
The company, based in St. Petersburg, Fla., has developed what it calls SKUPay, or a “smart incentives” platform, that allows retailers and brands to deliver virtual offers that consumers can redeem at retail checkout in the form of a one-time mobile payment. Its officials say the system addresses numerous challenges for marketers, brands and stores by eliminating sources of fraud and misredemption and enables daily settlement without the need for the lengthy process of coupon clearinghouses. Brands and marketers get additional visibility and precision around their offers, which are fully trackable, the company added; this can allow them to optimize their campaigns and reduce their costs.
“SKUPay offers are currency, not IOUs like coupons,” Jim Sampey, SKUx co-founder and CEO, said in a release. “They can be spent only once and solve long-time industry problems with process inefficiency, fraud and misredemption. These challenges are often only exacerbated by today’s digital coupons and cost brands and retailers billions of dollars. It’s time to put that money to better use providing shoppers with greater savings and satisfaction in the products they buy.”
Sampey, a former president at the direct marketing company Valpak, co-founded SKUx with payment industry vet Kenny Douglas; Robert Zaccardo, a sports marketing exec; and Bobby Tinsley, a singer turned tech investor. In an interview earlier this year with WGB, Tinsley described a vision for SKUx to be the “iTunes” of retail incentives, establishing a digital platform for a new paradigm of coupons and offers origination and redemption.
“When you look at the traditional offer model, a lot of times it just does not work for all the stakeholders in the ecosystem,” Tinsley explained. “And we’re really trying to come with a holistic approach that works great for the retailer, works great for the brand, and can drive new revenue and opportunities to engage new audiences.”
SKUx’s launch comes as coupon fraud gains new attention. The film “Queenpins,” a comedy loosely based on a significant counterfeit-coupon ring uncovered by federal authorities in Arizona in 2012, opened nationwide last week.
SKUx said it was capable of transforming “virtually any coupon, rebate, or promotional offer into an easy-to-use, serialized, single-use offer.” They can be delivered through virtually any channel of engagement—at store shelves, as part of email or mobile offers, on packages or outdoor media—and monitored and managed in near real-time. SKUx is paid on a per-redemption basis.
Officials say advantages for grocers include timely reimbursements that can cut weeks off current settlement clearinghouse methods and the reduction of instances where cashiers are forced into the role of “playing banker” by interpreting the validity of coupons amid widespread fraud.
The technology also plays into current trends in mobile payment, SKUx officials say, citing a 2020 survey from the National Retail Federation and Forrester showing broad acceptance of no-touch payments, which had increased to 69% of retailers. Mobile payment volume is growing rapidly, expected to grow from $465 billion in transactions in 2020 to nearly $700 billion in 2023, SKUx said.
Deb Henretta, a former president of Procter & Gamble’s global e-business and an adviser to SKU-x, in a statement described SKUPay as “a major leap forward” for the industry.
“Digital coupons just haven’t solved many of the major challenges that retailers and consumer products companies like Procter & Gamble have grappled with for decades,” Henretta said. “Coupon fraud, costly settlement processes and a lack of trust, transparency and visibility continue to plague us. SKUx and payment-based offers address those challenges in a way our current system can never do.”
SKUx said its platform is already being used by leading consumer brands and retailers and that it is looking to build a partner ecosystem to enhance its solution. SKUx previously announced one such partnership, with the prepaid-card company Blackhawk Network.
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