I’ve spent an inordinate amount of my career working on coupons and couponing, and while I have plenty to show for it in terms of patents, accomplishments, bonuses and press coverage, I used to feel I spent too much time chasing after something a little removed from the mainstream of marketing, not to mention the mainstream of real life.
But over the past 18 months, starting with the financial meltdown late last summer, couponing has become red-hot in the U.S. Companies are looking to coupons and other pricing mechanisms to revive flagging sales. Leading manufacturers want to use coupons to protect their premium brands from migration to lower-priced and generic products. Retailers are using coupons to get consumers into their stores. And everyone wants to do something that feels like it will get business moving again. All of these factors mean that coupons are back with a vengeance. Consumers are playing along.
Inmar, one of the major couponprocessing houses, recently released its 2009 report on couponing practices, which indicated that coupon usage was up – dramatically so – for the first time since 1992. Coupon distribution was up, despite declining circulation of Sunday newspapers; coupon values were up, reaching an average of $1.44 in face value; and, most importantly, redemption was up a total of 27 percent vs. 2008. With that the case, how can we make the most of it? Recently, much has been written by me and others about the potential of the Internet for couponing. I won’t recap that whole discussion here, except to say that the combination of improved POS technology, better and cheaper data mining, the Internet, and the rise of smart mobile devices will collectively create the technology infrastructure that will fuel the future of Couponing.
Serious Innovation Needed
U.S. shoppers have an interesting relationship with coupons. In consumer intercept interviews done a few years ago, 80 percent claimed to have used a coupon within the last year. In the same study, however, just 20 percent of consumers claimed to read the Sunday FSIs on a regular basis, or to seek out coupons in any proactive way. So, fully 60 percent of Americans will use a coupon if it’s “convenient” or “easy,” but can’t be bothered to seek out coupons in newspapers, on the Internet or anywhere else.
If we can develop couponing approaches that accommodate these consumers, we can make a real difference in all of our businesses. Couponing has the opportunity to reinvent itself as a critical part of the marketing mix. It can shift from being a niche tactic aimed at a small price-sensitive minority to a mainstream driver of marketing Strategies.
What needs to happen is some serious innovation. Coupon professionals (myself included) must redouble their efforts to harness the need for, and the power of, coupons, and deliver them to the 60 percent of consumers who are ready to use them if they’re delivered properly. Technology will play a key role in developing better ways both to deliver coupons and select which ones are distributed to which consumers.
Creativity is just as important, however, and we won’t fulfill the promise of couponing until we connect the power of emerging technologies to the power of creative and innovative approaches to selecting, distributing and redeeming coupons.
Here are a few steps designed to make sure that you keep your stores on the leading edge of the couponing curve:
Innovate with coupon delivery.
Start sending coupons to cell phones and e-mail addresses, as well as through other unexpected channels
Innovate with coupon selection.
Use your frequent shopper database and other consumer data to figure out who wants what, and deliver it to them
Aim to hit the 60 percent.
Start thinking of coupons outside of the context of serving only your most price-sensitive consumers. Use them to drive your gourmet food selections and new product offerings
Think creatively about coupons.
Take them out of their current cubbyhole and try using them to accomplish your other marketing objectives If properly deployed, coupons could become important drivers of our core businesses.