To Many Consumers, Coupons Represent Value – Leverage That
Oh those retail store consumers are a fickle lot. It seems they’re expecting discounts on everything and are almost making it some sort of social-media driven crusade to find the lowest prices.
Culturally it seems, we all like getting the lowest prices and discount coupons is the vehicle consumers recognize most. The excitement of saving a few dollars is too much to resist. I might suggest that couponing is an important tactic, and whether it is a success or not, depends on your coupon strategy.
According to Inmar’s 2013 Coupon Trends survey, consumers are still finding couponing a relevant factor for them in their purchase decisions.
Inmar’s excellent survey is a must read for discovering the benefits of couponing and how others are using the medium.
Manufacturer’s running POP campaigns should pay close attention to how consumers view couponing and how they’re using them. Digital couponing is getting quite creative and some of that is covered in the Inmar report.
Coupons: Billions Served
Coupon redemption is only one metric in the value of couponing. Improved revenue/ROI, successful launches, and improved branding are 3 desirable outcomes we must recognize.
With 1 billion coupons redeemed in 2012, consumers are clearly getting some benefit from using coupons. Overall coupon distribution in 2012 was 310 billion, yet only 1% of those were redeemed. Coupon distribution was down by 1.2% from 2012.
“Coupon users save $11.20 on average per shopping trip with coupons (11.5% of the basket total), with 15 minutes of seeking, clipping and planning their shopping with coupons.” from the 2013 Annual NCH Coupon Facts report.
Figure 1 Screen shot From the CPG COUPONS: U.S. MARKET ANALYSIS
Why the drop in coupon redemption? It could be a number of things, including improved targeting, such as:
- manufacturers not wanting to continue with discounts
- better targeting by marketers so they wouldn’t be giving away so much in poorly targeted offers
- manufacturers pushing new brands/products instead of established ones
- lower sales of major brands because of encroaching house brands
- even that they were becoming less effective.
Other studies (NCH International Promotions) on coupon distribution and redemption shows that consumers are still strongly interested in coupons.
Free standing Inserts Still Most Utilized
Consumers redeemed non-food coupons via these routes: 48.5 % Free-standing insert, 15.9% Instant Redeemable, and 5.6% Electronic Checkout. They redeemed 14.3% less coupons in 2012 and the overall value dropped by $14 billion.
Some manufacturers and brand managers may be losing faith in coupons, but they remain a very important promotional tool. The key to maximizing the value of couponing may be to improving engagement of the consumer online. The growth of integrated marketing might suggest that companies can’t rely on traditional couponing only as a sole promotional technique.
Couponing Still Has Tremendous Value – Don’t Shy Away
Top 10 Benefits of Couponing for manufacturers:
- Stimulate trial, especially of a new product
- Build additional new sales & customers
- Bring back previous customers
- Increase volume of orders/purchases
- Generate cross-sales or up-sales
- Increase/reinforce brand awareness and value proposition
- Push customers into social media and website engagement
- Support retailers/distributors ability to move stock
- Undermine competitor’s promotions
- To stand out better at Point of Purchase
Couponing can still be a valuable addition to your promotional mix. We’ve used it very successfully in some of our client’s campaigns. Our Spin U Win campaign has generated outstanding results for a number of pharmaceutical products. We used online tie-ins to make it easy for customer to get coupons and thus cut the cost of printing and distributing paper coupons.
Suffice to say that a well-conceived coupon marketing strategy can be very successful and that you shouldn’t avoid using one.
Need some ideas on how to make the best POP displays? Check out our survey of users on which display elements make the biggest impact. Speaking of impact, are your displays and POP collateral providing the brand lift you need?
NFC or near field communications is creating a wave in retail. Consumers can use magnetized cards or devices to pay for merchandise and to receive promotional communications from retailers or manufacturers. Read about how it will impact retailing and what opportunities it might open up for your firm.
Contact us about your POP campaign needs.