December 11, 2008
Consumers Print Their Own Coupons
Consumers
have traditionally turned to FSIs in local newspapers
to get coupon savings from packaged goods brands and retailers. A growing
number today, however, are looking for their savings online in the form
of electronic coupons that can be used in stores or on e-tail sites.
Simmons Market
Research Bureau reports that the number of consumers using online coupons
has jumped 22 percent in the past year. Today, 38.6 million Americans are
getting coupons from a variety of websites including Coupons.com, RedPlum.com,
RetailMeNot.com, CoolSavings.com, and others.
“With
the holidays here, the economy slumping, consumer confidence down and headlines
screaming layoffs, we’re seeing coupon clicks soar,”
Steven Boal, CEO of Coupons Inc., told USA Today.
National
brands such as General Mills are shifting dollars to online coupons as
more consumers look for savings online. Karl Schmidt, director of promotion
marketing for General Mills, told USA Today that online helps the
company reach younger, incremental consumers in a quicker and more cost-efficient
way.”
While
the growth numbers for online are impressive, only 11 percent of households
get their coupons from websites, according to a study published earlier
this year by Scarborough Research. That puts online coupons last on the
list of places American households go clipping for savings. The Sunday
newspaper still ranks number one as a source for coupons (53 percent),
followed by direct mail (35 percent), in-store (33 percent), loyalty cards
(22 percent), in-store circulars (22 percent), weekday newspaper (17 percent),
product packaging (17 percent), magazines (15 percent) and online.
Discussion Questions:
Where is the future of coupons headed? How long will it take to get there?
BrainTrust
Recent Discussions
Discussion Questions
Poll
There is no question that online coupons continue to gain popularity. But the problem with online coupons is that they still require ink on paper. From a distribution standpoint, they are more immediate, and more targeted than the FSIs available in the newspapers or mailers. And that is great. But the consumer still has to print the coupon, cut the coupon, carry the coupon, and remember to use the coupon. This continues to be a barrier.
When the coupons are delivered into a mobile device, whether it is a mobile phone, a game boy, an iPod, anything with a storage capability and a screen, and when the retailer is willing to scan the coupon from this portable device, that becomes a game changer. Companies such as a Cellfire are working on this; they currently have a test with Kroger. When it becomes widespread, and the retailers trust the system, targeted coupon distribution and use will explode.
In ten years, perhaps sooner, the smarter marketers will have intelligent systems to deliver customer-specific offers/coupons at point-of-sale. This will be done even without a mobile device, unless a customer prefers that “channel.” The key is to have the systems in place to be able to identify customers and this can be via multiple sources including “loyalty” cards and coupons (print and electronic) but also through other identifiers.
These “other” identifiers will be the most interesting and most compelling to customers. They will include everything from biometrics to unique identifiers (e.g., their mobile #) and even facial recognition.
The big paradigm shift that marketers are increasingly embracing is a mindshift away from breakage to the sound reality that delivering offers is most effective when they are actually used…and drive sales.
The consensus here appears to be consistent; coupons never really died and have certainly been reinvigorated given the downturn in the economy.
The future of coupons is the real question. I agree that in-store couponing through various methods (e.g., kiosk, on-shelf printers) will be the norm. We have also seen renewed interest–and participation–in rebate programs such as Caregivers Marketplace. This program offers a single check rebate for purchases of everyday over-the-counter medicines and wellness products. It goes to confirm that consumers are smart and are budget-conscious (and building brand loyalty along the way).
Especially given the costs involved, print-your-own is clearly a waystation on the path to mobile. That’s where the real action will be, assuming checkers have a way of validating a coupon that shows up on a customer’s mobile screen–Bluetooth maybe?
And I concur with the posters who see coupons popping up at point-of-sale, altogether bypassing promotional media like newspapers and online channels. (Though it’s hard for me to imagine a coupon-lover not combing the online troves for them, or subscribing to email from his/her favorite brands.)
Now, about those scenarios where people walk by a store and a 2-for-1 offer magically appears on their phones…I don’t see those really taking off. The offers need to hit a finely targeted database of only the folks who are truly interested–and how do you monitor a database minute by minute? I would think people outside that niche are likely going to feel more invaded than invited–and cross the street next time they’re in the area.
We are seeing a significant upward surge of cell phone and home phone couponing by retailers and grocers. Some of the redemption rates clients are reporting with mobile coupons are as high as 26% when combined with another medium like radio and with a strong offer. For example, this particular offer was 20%-off any 1 item with a cell phone coupon offered via a radio spot. Very innovative and effective!
The logistics of mobile couponing is no different than paper or online coupons in regards to tracking at POS. Traditional marketers do not need to be tech savvy, they need to be business savvy. Reach your customers where they live. The main item is retailers must first build a cell phone database of customers that have opted-in to receiving text message offers.
Those that have already started to build their cell phone databases are far ahead of their competitors in terms of reducing media fragmentation and increasing reach and customer penetration. Not to mention these redemptions numbers blow away direct mail response rates–at 1/10 the CPM.
Online coupons still require an pro-active approach to discounts–and in many ways are more complicated than just cutting them out of the Sunday paper. Digital in-store delivery to various touchpoints will get people when they are actively in shopping mode and where the coupon message and value has the greatest opportunity to change behavior.
We’re already doing this in multiple banners with great results via our self-service scan-and-bag solution. Solutions such as this don’t require the consumer to actually “do” anything and remove a lot of hurdles, they just decide whether or not they want to buy the product now that a discount will be applied.
Every old brand manager knows that the primary benefit of the FSI is (was) to generate activity in the store. Sales would “sell harder” if the quarterly price promotion was tied to an FSI because it was visible in the market. The Holy Grail was to get the retailer to tie-in with the FSI with an in-store display. Actual consumer redemption played a very small part in the ROI of the campaign.
Retailers are no longer as susceptible to the “support the FSI” sale. The value of couponing to the business is increasingly about the pure impact of the coupon itself. That makes targeting and efficiency more important than ever–and that speaks to online delivery.
Coupons will continue to be dispensed in many manners because we have become addicted to them at all levels. I suspect online and in-store dispensement will reign in the future.
Since couponing is a selective mechanism, I’ve always wondered how many companies could actually market their wares profitably if coupons were outlawed.
Cell phone and download devises are the future of coupons. Just as some companies are driving traffic by sending messages to cell phones about special short-term offers and seeing an immediate increase in sales, the same will happen to cell phones or other similar devices. Coupons tied into loyalty cards will allow retailers and manufacturers to customize the program to fit a particular customer’s buying habits.
I think the only thing that needs to be worked out is making sure the coupons are valid.
Newspapers are going to have to change to survive.
Loyalty programs can really take advantage of the electronic discount medium. Using marketing data, they can tailor coupons to the customer’s specific buying habits. Paper coupons and flyers are still an invaluable way to market to a community or defined selling area. Paper coupons are also an excellent tool for new product launches. Nothing gets customers excited like a nice discount or freebie on a new item.
Digital is the wave of the future and as coupons are making a resurgence, retailers and vendors should utilize online coupons as a way to grow sales.
This fits right in with yesterday’s topic of the decline in newspapers. Why should consumer’s buy newspapers if one of the primary reasons is to get coupons that they can get for free off the Internet? As interest in print media continues to decline, I believe online coupons will continue to increase.
In a down economy, consumers will go everywhere they need to do find the deals they’re after. However, online coupons still lag because they still have many of the barriers of the FSI (I have to find it, I have to remember to bring it to the store, I have to remember to redeem it at checkout and make sure I picked up the right product) with the added challenge of “I have to print it using my own printer and paper.” Online coupons certainly show a lot of promise and opportunity but concerns about fraud still dog the industry as does the simple truth that providing more discounts for more people isn’t necessarily a great long-term business gain.
In 10 years I expect the coupon business will be much more rationalized as retailers and manufacturers use loyalty card data, past transactions and website opt-ins to segregate and reward their best customers with discounts and offers delivered automatically via loyalty card or sent out via mobile.
The fundamental challenge is that until there is a central database that can be referenced to validate the legitimacy and terms of online coupons, there will always be the risk that the retailer is accepting a bogus coupon created on a customer’s computer. The central database may also support serialization in order to limit redemptions. Cell phone and in-cart mobile devices are likely to be better means for delivering targeted discounts in the meantime.
The question implies that there will be a significant shift in coupon usage depending on where a consumer gets coupons. Does this really matter?
Coupon usage is trending up again, primarily in response to the economic downturn.
Should brand marketers offer coupons in print, direct mail and online, if coupons are part of my marketing mix? Yes!
Whether shoppers get the coupons online, via cell phone, newspaper, or direct mail, the coupon device all too often just feeds cherry-pickers. Most coupons don’t induce trial leading to adoption, they just pander to price-hunters. So what’s the achievement?
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There is no question that online coupons continue to gain popularity. But the problem with online coupons is that they still require ink on paper. From a distribution standpoint, they are more immediate, and more targeted than the FSIs available in the newspapers or mailers. And that is great. But the consumer still has to print the coupon, cut the coupon, carry the coupon, and remember to use the coupon. This continues to be a barrier.
When the coupons are delivered into a mobile device, whether it is a mobile phone, a game boy, an iPod, anything with a storage capability and a screen, and when the retailer is willing to scan the coupon from this portable device, that becomes a game changer. Companies such as a Cellfire are working on this; they currently have a test with Kroger. When it becomes widespread, and the retailers trust the system, targeted coupon distribution and use will explode.
In ten years, perhaps sooner, the smarter marketers will have intelligent systems to deliver customer-specific offers/coupons at point-of-sale. This will be done even without a mobile device, unless a customer prefers that “channel.” The key is to have the systems in place to be able to identify customers and this can be via multiple sources including “loyalty” cards and coupons (print and electronic) but also through other identifiers.
These “other” identifiers will be the most interesting and most compelling to customers. They will include everything from biometrics to unique identifiers (e.g., their mobile #) and even facial recognition.
The big paradigm shift that marketers are increasingly embracing is a mindshift away from breakage to the sound reality that delivering offers is most effective when they are actually used…and drive sales.
The consensus here appears to be consistent; coupons never really died and have certainly been reinvigorated given the downturn in the economy.
The future of coupons is the real question. I agree that in-store couponing through various methods (e.g., kiosk, on-shelf printers) will be the norm. We have also seen renewed interest–and participation–in rebate programs such as Caregivers Marketplace. This program offers a single check rebate for purchases of everyday over-the-counter medicines and wellness products. It goes to confirm that consumers are smart and are budget-conscious (and building brand loyalty along the way).
Especially given the costs involved, print-your-own is clearly a waystation on the path to mobile. That’s where the real action will be, assuming checkers have a way of validating a coupon that shows up on a customer’s mobile screen–Bluetooth maybe?
And I concur with the posters who see coupons popping up at point-of-sale, altogether bypassing promotional media like newspapers and online channels. (Though it’s hard for me to imagine a coupon-lover not combing the online troves for them, or subscribing to email from his/her favorite brands.)
Now, about those scenarios where people walk by a store and a 2-for-1 offer magically appears on their phones…I don’t see those really taking off. The offers need to hit a finely targeted database of only the folks who are truly interested–and how do you monitor a database minute by minute? I would think people outside that niche are likely going to feel more invaded than invited–and cross the street next time they’re in the area.
We are seeing a significant upward surge of cell phone and home phone couponing by retailers and grocers. Some of the redemption rates clients are reporting with mobile coupons are as high as 26% when combined with another medium like radio and with a strong offer. For example, this particular offer was 20%-off any 1 item with a cell phone coupon offered via a radio spot. Very innovative and effective!
The logistics of mobile couponing is no different than paper or online coupons in regards to tracking at POS. Traditional marketers do not need to be tech savvy, they need to be business savvy. Reach your customers where they live. The main item is retailers must first build a cell phone database of customers that have opted-in to receiving text message offers.
Those that have already started to build their cell phone databases are far ahead of their competitors in terms of reducing media fragmentation and increasing reach and customer penetration. Not to mention these redemptions numbers blow away direct mail response rates–at 1/10 the CPM.
Online coupons still require an pro-active approach to discounts–and in many ways are more complicated than just cutting them out of the Sunday paper. Digital in-store delivery to various touchpoints will get people when they are actively in shopping mode and where the coupon message and value has the greatest opportunity to change behavior.
We’re already doing this in multiple banners with great results via our self-service scan-and-bag solution. Solutions such as this don’t require the consumer to actually “do” anything and remove a lot of hurdles, they just decide whether or not they want to buy the product now that a discount will be applied.
Every old brand manager knows that the primary benefit of the FSI is (was) to generate activity in the store. Sales would “sell harder” if the quarterly price promotion was tied to an FSI because it was visible in the market. The Holy Grail was to get the retailer to tie-in with the FSI with an in-store display. Actual consumer redemption played a very small part in the ROI of the campaign.
Retailers are no longer as susceptible to the “support the FSI” sale. The value of couponing to the business is increasingly about the pure impact of the coupon itself. That makes targeting and efficiency more important than ever–and that speaks to online delivery.
Coupons will continue to be dispensed in many manners because we have become addicted to them at all levels. I suspect online and in-store dispensement will reign in the future.
Since couponing is a selective mechanism, I’ve always wondered how many companies could actually market their wares profitably if coupons were outlawed.
Cell phone and download devises are the future of coupons. Just as some companies are driving traffic by sending messages to cell phones about special short-term offers and seeing an immediate increase in sales, the same will happen to cell phones or other similar devices. Coupons tied into loyalty cards will allow retailers and manufacturers to customize the program to fit a particular customer’s buying habits.
I think the only thing that needs to be worked out is making sure the coupons are valid.
Newspapers are going to have to change to survive.
Loyalty programs can really take advantage of the electronic discount medium. Using marketing data, they can tailor coupons to the customer’s specific buying habits. Paper coupons and flyers are still an invaluable way to market to a community or defined selling area. Paper coupons are also an excellent tool for new product launches. Nothing gets customers excited like a nice discount or freebie on a new item.
Digital is the wave of the future and as coupons are making a resurgence, retailers and vendors should utilize online coupons as a way to grow sales.
This fits right in with yesterday’s topic of the decline in newspapers. Why should consumer’s buy newspapers if one of the primary reasons is to get coupons that they can get for free off the Internet? As interest in print media continues to decline, I believe online coupons will continue to increase.
In a down economy, consumers will go everywhere they need to do find the deals they’re after. However, online coupons still lag because they still have many of the barriers of the FSI (I have to find it, I have to remember to bring it to the store, I have to remember to redeem it at checkout and make sure I picked up the right product) with the added challenge of “I have to print it using my own printer and paper.” Online coupons certainly show a lot of promise and opportunity but concerns about fraud still dog the industry as does the simple truth that providing more discounts for more people isn’t necessarily a great long-term business gain.
In 10 years I expect the coupon business will be much more rationalized as retailers and manufacturers use loyalty card data, past transactions and website opt-ins to segregate and reward their best customers with discounts and offers delivered automatically via loyalty card or sent out via mobile.
The fundamental challenge is that until there is a central database that can be referenced to validate the legitimacy and terms of online coupons, there will always be the risk that the retailer is accepting a bogus coupon created on a customer’s computer. The central database may also support serialization in order to limit redemptions. Cell phone and in-cart mobile devices are likely to be better means for delivering targeted discounts in the meantime.
The question implies that there will be a significant shift in coupon usage depending on where a consumer gets coupons. Does this really matter?
Coupon usage is trending up again, primarily in response to the economic downturn.
Should brand marketers offer coupons in print, direct mail and online, if coupons are part of my marketing mix? Yes!
Whether shoppers get the coupons online, via cell phone, newspaper, or direct mail, the coupon device all too often just feeds cherry-pickers. Most coupons don’t induce trial leading to adoption, they just pander to price-hunters. So what’s the achievement?