Consumers Clicking for Coupons

Discussion
Apr 02, 2009

By George Anderson

New research
from Information Resources and Platform-A shows fewer consumers clipping
coupons from free standing inserts (FSIs) in their Sunday newspapers while
greater numbers are clicking on downloadable coupons on manufacturer, retailer
and third-party websites.

Economic conditions
have brought about an increased focus on value for American consumers and
interest in coupons has grown as consumers look for ways to save.

“We have
an economy that makes coupons much more relevant to the average consumer,
a rising generation of families totally at home with the Internet, and
an overall decline of the newspaper and its Sunday circular distribution.
There’s clearly a huge window of opportunity here,” said Mark Ellis,
senior vice-president, AOL/Platform-A, in a press release.

According to
the study, 78 percent of shoppers currently use newspaper coupons at retail.
Roughly 40 percent of consumers were likely to go online to get coupons.

“What’s particularly remarkable about
the study results is how open young people are to the idea of using coupons
online — even though clipping coupons from the newspaper really hasn’t
been their thing,” said J. P. Beauchamp, senior vice president, IRI
Consumer & Shopper Insights. “I think we’ll be seeing CPG manufacturers
jumping on this trend — using online coupons to court a new generation
of consumers and build loyalty during these cost-conscious times.”

Discussion Questions: Will we see a growing
number of CPG brands moving to online coupons in the near future? What
factors would prevent retail stores from accepting online coupons? Are
stores that don’t accept online coupons operating at a competitive disadvantage?

[Author’s Commentary] While the
move to online coupons grows, there are still large chains that do not
accept internet coupons. On a recent trip to a Top 25 supermarket chain
store, a cashier said, “We don’t take this here,” after
being handed coupons downloaded from the SmartSource website. Being in
a somewhat irritable mood to begin with, I replied, “No problem, we
don’t buy these here,” and put the products off to the side.

We contacted the chain in question
for comment and have not received a response.

Please practice The RetailWire Golden Rule when submitting your comments.

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16 Comments on "Consumers Clicking for Coupons"


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Tim Henderson
Guest
Tim Henderson
13 years 1 month ago
If they haven’t already, then CPGers and retailers should be exploring e-coupons. It’s part of the natural evolution of couponing from print to electronic and one that tech-savvy, younger consumers will increasingly desire. But, as your experience notes, hurdles do remain. The industry as a whole needs to establish standards to safeguard against counterfeit e-coupons. And merchants and CPGers also need to push for widespread acceptance of e-coupons at the POS. Another issue is developing a way to ensure that coupon offers are mirrored in both the online and physical spaces. Not all consumers are looking for coupons online. Yes, e-coupons can be held out as a reward for providing personal info at company websites, for example, but the shopper still clipping the Sunday circular still wants savings too. When that latter customer realizes they’re not getting the deals, that could prove a turnoff. That said, paper or electronic are not the only choices. A nice middle ground exists with programs like Giant Eagle’s e-Offers which allows consumers to go online to “attach” coupons to… Read more »
Jeff Weitzman
Guest
Jeff Weitzman
13 years 1 month ago
The future is now, people! Most of you know that I spent over 6 years with Coupons, Inc., so you know where I’m coming from. But nearly *every* major CPG manufacturer has been using printable coupons for several years now; many of the major retailers (Kroger, Safeway, etc) are now distributing printable coupons from their own websites, and Coupons.com has emerged as a major distributor of coupons. NCH data recently showed that 5% of redeemed coupons were printed from the Web. 5%! This is not an experiment, this is already mainstream. It’s also worth touching on some continuing myths. Mel’s comment about consumers’ use of coupons online vs. offline is simply not supported by real data. People use coupons online for the very same mix of reasons they clip them offline, and they are actually more likely to use them to try new products than FSI users. The retailer acceptance “problem” is another one of those self-reinforcing perception issues that is fading fast. In the vast majority of cases, the stores that don’t accept them… Read more »
Bernice Hurst
Guest
13 years 1 month ago

I can hardly believe we’re even discussing this. It seems pretty much a no-brainer. Fewer newspapers carrying less advertising – a genuine chicken and egg situation – means consumers will be more proactive. The up side – they will look for what they want and be pleased not to wade through what they don’t want. The down side – they will have to spend time looking for what they want and may be less likely to know about new products. Which means that the new products will have to find new ways of making themselves known. I recognise the growing popularity and usefulness of mobile contacts, digital advertising and kiosks although resisting them myself. What gets me every time is wandering around the store but products do have to work hard to make me notice them unless I’m specifically in receptive mode. However you look at it, though, stores that refuse to accept coupons, no matter where they came from, are just being downright stubborn and deserve to have customers walk out without buying.

Doron Levy
Guest
Doron Levy
13 years 1 month ago

With the decline in newspapers, we may see the demise of the weekly circular all together. Online and smart cards (especially smart cards) is how I see coupons in 5 years. Especially in grocery, where most of your coupon action happens.

Ben Sprecher
Guest
Ben Sprecher
13 years 1 month ago

I agree with the general consensus here that mobile (specifically, location-aware and loyalty-card-connected) platforms are the direction of the future, although they will by no means be the only channel. Online and in-store distribution (kiosk, hand-held, cart-mounted, shelf-mounted, etc.) will only grow. FSIs, like the newspapers that contain them, are headed for extinction–maybe sooner than we think as the economic downturn undercuts ad revenue at many nearly-bankrupt newspapers.

To Lisa’s question about the clearinghouse process, I think one of the great benefits of new-media couponing is the opportunity to cut out the antiquated, inefficient, and fraud-prone clearinghouse system once and for all. Because most of the new distribution channels can be traced to the individual receiving the offer, clearing can be performed entirely based on POS loyalty data when the coupons are issued in collaboration with a retailer. Even for pure manufacturer coupons, I suspect the coupons of the future will have unique identifiers, which will allow for true electronic reconciliation.

Mel Kleiman
Guest
13 years 1 month ago

When it comes to coupons there are 3 [types of] users and 3 attitudes. Manufactures, retailers, and distributors. The 3 attitudes are we love them, we hate them or, we tolerate and sometime use them.

Online coupons had some great advantages to those consumers that take the time to go to web to download them. That means they were, in most cases, looking for a coupon on a specific product and would most likely have bought the product anyway. Consumer wins, manufacturer loses. Another scenario is the potential for fraud created with downloaded coupons.

I see one way that there can we a winner with downloadable coupons and that is when the coupon is issued by retailers, good only at their locations and good only for one item and maybe with a minimum purchase.

Jonathan Marek
Guest
13 years 1 month ago

I hope so–the overall amount of money spent on FSIs is astounding. It is much too high. As consumers learn to use online channels for coupons (and as newspapers go out of business!), the decline of the FSI will likely continue.

Many of the best consumer goods and retail companies are already thinking about this issue, and how to position their online spend in relation to FSI. Google’s “Clicks-to-Bricks” initiative, and other attempts to prove “online-to-offline” effects, will be critical. Those consumer goods companies and retailers who can truly measure the incremental online-to-offline impact with rigorous test-and-control methodologies will be the companies who make this ad spend shift in the more profitable way. Those who just look at coupon redemptions, web site traffic, or other less insightful metrics will find their ad spend ROI declining.

Dave Wendland
Guest
13 years 1 month ago

Newspapers and FSIs are definitely declining and consumers are finding new ways to take advantage of coupons. The digital age has not only arrived–it is in full bloom.

There may be a means of linking online coupons with in-store kiosks that will enable retailers to better control the process (at least that may make sense). Ultimately, PDAs and cell phones will be integrated into the process and accepted at retail. There is likely a time horizon before this becomes mainstream but the movement has begun.

Warren Thayer
Guest
13 years 1 month ago

It’s certainly easier, and more sensible, for shoppers to be able to search for the specific coupons they want rather than wade through FSIs and clip things out. I can easily see someone, before going shopping, making a list and then downloading coupons they want. Going thru FSIs is a pain, and you’re likely to leave the coupons home anyway.

The only thing wrong with this is that it is more difficult for totally new products to get noticed, I would think, by the shopper searching for specific coupons than by the shopper browsing through FSIs and being exposed to everything. But in time, I suppose, online systems will learn your buying habits and offer things that make sense to you, and get them in your face on-screen.

All this, by the way, from someone being dragged (not kicking and screaming, but definitely fumbling and mumbling) into the high-tech future.

Joan Treistman
Guest
13 years 1 month ago
Let’s prioritize the strategy: • We want consumers to purchase our brands and buy in our stores; • Coupons that are perceived to provide a value will encourage purchase, especially in this economy; • FSIs aren’t getting the share they used to; • Newspapers aren’t selling the way they used to, hence less FSI exposure; • Consumers have learned to expect finding deals online; • Consumers, old & young, know they can download coupons online; • People share their information/coupons with “friends & family”; • This creates brand awareness and stimulates purchase; • Retailers and CPG companies are leveraging these realities by reaching out online; • However, some retailers and CPG companies are challenged by the proliferation of information, online coupons and/or the ability to print “extra” copies of coupons; • Seems like a great opportunity for marketers and retailers who are willing to face the facts and develop a strategy; • To maintain the brand essence, remember, it’s about demonstrating value for equity, not about slashing prices; • Open your minds and embrace the… Read more »
Lisa Bradner
Guest
Lisa Bradner
13 years 1 month ago

Love the commentary and I agree with the role of mobile in the future. Question I have for the group: How will the clearinghouse process change in this scenario? It is an intensive slow manual process rife for fraud. I think this has held companies back–if we add more sources and types of coupons, how do we settle them and how do we avoid more fraud? I’m interested in what the group thinks about this–I know enough to be dangerous!

Gene Hoffman
Guest
Gene Hoffman
13 years 1 month ago
Being an advocate of “All customers are entitled to equal price treatment in a store,” I repeat what I have previously projected in print and presentations: Retailers should give all customers of their store(s) the discount coupon price, with or without a coupon. Confessedly, suppliers did not, and have not, fully embraced this paradigm. But if any retailer believes every customer in their store is entitled to the same net price when purchasing the same (non-distressed) item, here’s a new paradigm to consider, and it goes beyond having printed brochures inside the store with printed coupons. Place a sign in your store proclaiming your fairness philosophy–if you believe in doing this. “All customers of this store will always get the same price for the same product–with or without coupons in hand. We have programmed our computers to automatically discount the full amount of all prevailing manufacturers’ coupons valid in this marketing area as well as our own. When you buy these fine products you will automatically receive the coupon discounts when you check out, and… Read more »
Max Goldberg
Guest
13 years 1 month ago

It is no surprise that consumers are using coupons from newspapers and online. As newspaper readership declines, the Internet is the logical place to look for and find coupons. Manufacturers will follow consumers and therefor, offer more coupons online.

Retailers that do not accept online coupons are doing themselves a disservice. Retailers need to facilitate customer desires, not block them.

Liz Crawford
Guest
13 years 1 month ago

Sure they are. Meantime, there are fewer newspapers and fewer readers for FSI’s.

The whole world is going digital, so this is part and parcel of the whole. Next–no searching; no printouts. Just cellphones and “push” coupons.

Tony Orlando
Guest
13 years 1 month ago

The problem I have with e-coupons is the huge amount of fraudulent ones being created by all of these hackers. Each week we receive from IGA a list the the multitude of fraudulent coupons entering our market, and you can not trust what is going on in cyberspace. This will only get worse as computers become more sophisticated, with laser printers, so I am skeptical of the reception some stores have with this.

As a small business, I can not afford to set up these elaborate systems in-store like many chains can. I’m sure the future is going to forge ahead without me anyway, but I thought I’d put my 2 cents in.

Dave Wendland
Guest
13 years 1 month ago

One way to cut down on the potential of fraud with e-coupons is to create a co-existence with this trend by enabling consumers to print the coupons within the retail operation.

We’re beginning to see this with effective in-store kiosk systems (ReadyTouch and HealthPicks, for example) that can authenticate the legitmacy of the coupon and put control in the consumer’s hands. No it doesn’t create a paperless society but it does increase sales without falling victim to fraud.

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