Coupons in the Digital Age

Stephen DeAngelis

August 29, 2018

For decades, a common sight in many homes has been a mother sitting at the kitchen table cutting out coupons from the Sunday paper. You could be forgiven for thinking coupons are passé in the Digital Age; but, you would be wrong. Even though newspapers have suffered serious declines in circulation and advertising, “Free-Standing Inserts (FSI) found in the Sunday newspaper continue to dominate both distribution and redemption.”[1] However, as so-called Millennials and Generation Zers mature, this may change. A few years ago, Jack Loechner (@mp_research) reported, “According to eMarketer, the number of adult mobile coupon users in the US rose nearly 18% to 92.6 million in 2015. By the end of 2016, mobile coupon users [increased] by 11% to 104 million in the US. And Koupon Media (a mobile offer platform) reports 500 million mobile coupons [were] delivered in 2015.”[2] Although it may seem counter-intuitive, thanks to smartphones, coupon usage is actually on the rise. Dan Alaimo reports, “Digital coupons have seen five successive years of double-digit increases, with the strongest growth in share of redemption for load-to-card, which is now up 587% from 2013 to 2017.”[3]

 

Coupons and the Digital Path to Purchase

 

Most people are aware of the impact the Internet has had on the retail industry. The relatively rapid penetration of smartphones around the world has made the digital path to purchase a preferred customer journey. Even when shopping in brick-and-mortar stores, consumers often consult their mobile devices. “In a survey last year,” reports Dan O’Shea, “71.6% of consumers said they shop via mobile smartphone at home, while traveling or during their spare time, and 60.1% said they used their smartphones in brick-and-mortar stores.” [4] As a result, marketers are turning to digital coupons to attract customers. Loechner reports the eMarketer study found, “Customers spend more money, buy more products, and adopt new technologies when they’re given a mobile coupon. … As mobile engagement becomes increasingly important to brands and retailers, mobile coupons are emerging as a top priority.” Almost any business can benefit by offering digital coupons. In the food industry, for example, a recent study conducted by Tillster, concluded, “QSR and fast casual restaurants customers are driven by digital coupons and rewards. The study, Digital Coupons and Loyalty Index, was conducted in collaboration with research firm SSI on the usage of digital coupons and loyalty programs of more than 2,000 QSR and fast casual customers. Around 80% of QSR and fast casual customers agreed to visit a restaurant when offered digital coupons or part of a rewards program. According to the study, customers are willing to shift brands or would try a new brand when digital coupons were offered.”[5]

 

One of the attractions of mobile coupons and offers is that they can be offered up in real time. O’Shea reports, “54% of respondents [to iVend Retail’s 2018 Global Path to Purchase survey] said they chose to shop with retailers who sent them special offers via mobile while they were inside physical stores.” O’Shea concludes, “The evidence that consumers are shopping via mobile and using their mobile phones in-store has been piling up for a while now. It may also hint that retailers are not doing as much as they can to effectively connect with shoppers.”

 

Digital Coupons in the Grocery Sector

 

Coupons have always played a significant role in the grocery sector. That trend continues in the Digital Age. Alaimo reports the Inmar Promotion Industry Analysis and its Shopper Behavior Study concluded, “Coupons are changing shopper behavior. The study found that of shoppers with coupons, 39.1% said they would buy a product sooner; 39% said they would buy a brand they otherwise would not have considered; 38.5% said they would buy more of a product; 29.9% said they would buy a different product within a brand; and 18.1% said they would switch back to a product.” As noted at the beginning of this article, Free-Standing Inserts still dominate the coupon scene; but, digital coupons are on the rise. Holly Pavlika (@HollyPavlika‏), Senior Vice President for marketing and content for Inmar, reports, “Free-Standing Inserts made up 90.8% of all coupons distributed, and 34.6% of all coupons redeemed in 2017, while other methods like Load-to-Card made up 1.1% of all coupons distributed and 10.9% of all coupons redeemed.”[6] She observes, however, “Generation Z, Millennials, busy shopping parents and even Boomers are just finding digital coupons to be more convenient and easier to use whether at convenience, supermarket, mass merchandisers or drug stores. The retailers and brands that will win with these shoppers are those integrating digital promotions into all of their marketing efforts.”

 

One of the benefits of offering coupons through loyalty programs is the consumer data being collected. That data can be used to personalize shopping and make digital coupons even more effective. Enterra’s Category Management Intelligence System™ (CMIS) contains a Trade Promotion and Insights Optimization Module that can help assess shopper marketing efforts (including couponing and non-traditional displays). There are multiple opportunities for retailers and brands to provide digital coupons to consumers at just the right moment in their decision-making process. Cognitive computing capabilities can ensure those moments are not lost.

 

Summary

 

“Although the process of clipping coupons from the Sunday paper may be long in the past,” writes Laura Forer (@LauraFWrites), “that doesn’t mean coupons aren’t still popular among consumers. In fact, new technologies can make deal-seeking easier than ever.”[7] Forer may be a bit premature in declaring FIS coupons dead, but she is correct that digital coupons represent the future. Alaimo concludes, “Coupons are changing with the times and have never been more important for driving traffic, sales and brand conversions. Brands and retailers need to meet shoppers wherever they are on the shopping journey.”

 

Footnotes
[1] Holly Pavlika, “Viewpoint: Study shows coupons change buyer behavior,” Supermarket News, 15 March 2018.
[2] Jack Loechner, “Mobile Coupon Users On The Rise,” MediaPost, 6 September 2016.
[3] Dan Alaimo, “Inmar study: 45% of shoppers load digital coupons to loyalty cards,” Food Dive, 19 March 2018.
[4] Dan O’Shea, “Shopping is going mobile, in-store and out,” Retail Dive, 13 March 2018.
[5] Staff, “US study finds digital coupons and rewards drive QSR and fast casual customers,” Verdict Foodservice, 11 July 2018.
[6] Pavlika, op. cit.
[7] Laura Forer, “Always On: How Modern Life Has Changed Shopping and Coupons,” MarketingProfs, 5 April 2018.