December 2, 2010
Rise of the Coupon
Rise of the Coupon
In a struggling economy where marketers are trying every tactic possible to keep their customers, one of the simplest forms of marketing is rising above all – discount coupons. Product based companies have been printing coupons for over a hundred years to attract customers to choose their product over the competition. Although two of the strongest and oldest sources of coupons, newspaper circulars and direct mail, have been taking a beating since well before the economy crashed. But now, thanks to the recession, consumers have been constantly looking for ways to save money which made 2009 a year with the highest coupon usage in US since 1992.
Though marketers historically used newspapers and mailings as the most popular ways to distribute coupons to a mass audience, all that is now changing with the revolution of the internet. There are now a multitude of channels for a consumer to receive coupons, such as: online, mobile, social networks, sms/mms etc. Sunday circulars, which primarily contain grocery savings coupons, still account for 70% of all coupons ‘clipped’. However, with the newspaper industry declining rapidly and the online market and e-commerce picking up, more consumers have now started searching for ways to save via the internet. For those companies that have gone to online couponing, they have found another way to keep their customers engaged and to encourage them to continue spending even in a bad economy. Even though internet coupons accounted for only 6% of all coupons used during 2009, they offer roughly twice the value of the average printed coupon. This type of margin is primarily due to the fact that consumers prefer to shop for bigger ticketed items online versus the smaller items such as grocery and everyday needs.
As more and more companies realize the importance of being online and making their products and services available via the internet, the amount of coupons applied online is going to increase drastically. According to some statisticians, the internet will soon account for 9% of coupons distributed whereas the traditional newspaper circulars will drop to 68%. Some might argue that the usage of online coupons has risen due to the struggling economy, but I would argue that the basic fundamental behind online coupon usage is really tied to consumers now doing online research before buying any high ticketed items. This research usually involves them searching for reviews, product and price comparisons, and in turn any discount coupons that might be available for their benefit. The rise of coupons will definitely outlast the economic downturn, especially with more companies starting to sell online and even more so with the increase in usage of mobile browsing.
Now with the rise of Smartphone’s (i.e. Blackberry, iPhone, etc.), consumers are spending a lot of time browsing the internet using their mobile devices. The flexibility offered to consumers using mobile phones has added yet another way consumers can spend in general. The end user can now receive coupons via sms or mms and apply them directly through their mobile phones. They can also use applications such as Yowza and Foursquare, which provide them the flexibility of downloading selected coupons on their phones. Another company called mobiQpons has created an application for mobile users which allows users to search coupons and deals available at stores near their location directly through their mobile phones. Yankee group, a top Research Company, forecasts the number of mobile coupons redeemed in North America is set to increase more than tenfold in 2010 followed by triple digit increases in 2011!
While to usage of coupons continues to rise amongst consumers through various mediums, we can definitely gather one thing from all the facts above – recession or no recession, coupons are here to stay, and are going to change the way people save and spend.