Cut the Coupons: Mondelēz and SKUx See Blockchain Transforming Retail Promotions

Technology can revolutionize industries when applied thoughtfully.

When it comes to evolving customer engagement strategies, particularly across the traditional couponing and promotional landscape, innovation is transforming antiquated paper-based and manual workflows.

Xiang Xu, global COE leader of digital strategy and blockchain at Mondelēz International, and SKUx co-founder and CEO Bobby Tinsley told PYMNTS’ Karen Webster that distributed ledger technology (DLT) and blockchain advances are providing groundbreaking steps forward for the retail and payment-based offer ecosystems.

When it comes to the traditional couponing and promotional landscape, there’s a lot of room for technology and innovation to run.

“For reference, in today’s traditional paper-based coupon processes it takes seven to 10 days for the consumer to eventually redeem a coupon in a retail store, and we have no data or insight around who presented that coupon or what product they bought,” Xu said, adding that Mondelēz, known for its iconic brands like Oreo and Cadbury, has historically relied on traditional couponing methods involving paper checks and mailed promotions.

This legacy system was once effective, but it has become increasingly disconnected from modern consumer behavior.

“The future of promotions is payments,” Tinsley said. “And the future of consumer engagement is the mobile device.”

Paper Promotions and Blockchain’s Transformative Role

In a joint effort to create an end-to-end secure and seamless consumer offer experience tied to an immutable record of transaction, Mondelēz and SKUx partnered this month to innovate beyond the conventional couponing process. The collaboration led to a proof of concept (POC) that transitioned Mondelēz’s promotions into a digital format, shortening redemption times from several days to seconds and achieving a 90% conversion rate — an improvement over the paper-based system.

“Just click the link and redeem the coupon instantly,” Xu said. “That’s what the user experience looks like. The Gen Z or the Gen X consumer, they’re never going to use paper-based anything.”

Blockchain technology underpins this new digital promotional system, offering transparency and efficiency. Both executives explained that by using DLT through partnerships, including those with the Hedera Council and the Hashgraph Association, Mondelēz and SKUx can track and trace every promotional transaction in real time.

“Blockchain has traditionally been very crypto-focused as opposed to actually utilizing the ledger for what the ledger is, which is the tracking and traceability of transactions,” Tinsley said. “The ability to provide unmatched transparency to the data that we are powering on behalf of partners, that is where this becomes groundbreaking for retail.”

By eliminating paper-based processes, companies can save on costs associated with printing and distributing physical coupons, reduce processing times and improve consumer experience. The immutability of blockchain ensures that once an offer is redeemed, it cannot be reused fraudulently, providing brands with greater confidence in their promotional spend. This level of security and transparency not only supports the business case for brands but also appeals to retailers who can benefit from streamlined processes and enhanced consumer engagement.

See also: From Transaction to Transformation: Blockchain’s Loyalty Proposition

A Holistic Approach to Loyalty and Consumer Engagement

While there is a strong desire for digital transformation, businesses must be convinced of the long-term value and return on investment (ROI) associated with adopting new technology, Xu said. Incremental improvements to traditional systems are insufficient for achieving notable growth goals. Instead, a transformational shift — backed by advanced technologies like blockchain — is necessary to drive efficiency and long-term profitability.

A key aspect of the approach being taken by Mondelēz and SKUx is the development of a new promotional rail — one that is agnostic to payment providers and networks. By offering digital promotions compatible with various payment methods and integrating them into existing loyalty programs, SKUx aims to create a seamless experience for both merchants and consumers, Tinsley said. This infrastructure enables brands like Mondelēz to offer tailored promotions that can be instantly redeemed, track consumer engagement more accurately, and drive incremental sales.

Xu and Tinsley are also exploring ways to expand this ecosystem further. Beyond digital coupons, they said they see potential in integrating retail loyalty programs and developing new types of wallets that tie brand and retail loyalty together. By doing so, they aim to create a more integrated financial relationship within the promotional ecosystem, which not only incentivizes consumers but also benefits stores and brands.

Still, scalability and interoperability are challenges that the partnership between Mondelēz and SKUx aims to address as the companies move beyond proof of concept and into full production. While the initial rollout focused on the United States and Canadian markets, efforts are now expanding to Latin America, Europe and Asia, Xu said. This international expansion involves navigating different currencies, retail environments and regulatory requirements, testing the flexibility and robustness of their blockchain-based system.

By doing so, Mondelēz and SKUx aim to redefine how brands engage with consumers, moving beyond the limitations of traditional promotional models.

“Having that infrastructure layer of DLT gives us the confidence that, as we grow and we scale those use cases, that you can trust the data,” Tinsley said.