Coupons gather momentum in economic downturn
Economic woes indicate an increase in coupon usage, according to a survey by ICOM Information & Communications LP (ICOM). The survey was conducted via e-mail using a random sample of 40,000 US households from ICOM's 26 million Shopper's Voice database.
Of the 1,529 US consumers who responded, 67% said they are much more likely, or somewhat more likely, to use coupons during a recession. Consumers ages 18 to 34 were 3% more likely than those in the 35 to 54 age bracket and 8% more likely than those ages 55-plus to take advantage of coupon savings during a recession. Midwesterners, meanwhile, led the list in terms of geographic location, with 70% responding they would be more likely to make use of coupons during a recession. Income levels did not make a significant difference.
“This is a great opportunity for marketers to get competitive and discard the mass coupon mentality,” explained ICOM VP of marketing Peter Meyers. “We're moving into a period of stagnation, if not a recession, and consumers are looking to save more money. Coupons are a great trial tool for direct marketing and for gaining brand loyalty.” At the moment, Meyers said, “I'm seeing a lot of indiscriminate couponing to consumers. While brands currently do a great deal of research, they need to better harness it and send offers relevant to the needs of individual consumers.”
Technology advancements have also opened up space in the coupon sector, with 58% of consumers responding to ICOM's survey predicting their coupon use would increase if they could download a coupon from the Internet and have it automatically connected to an electronically swiped frequent shopper card. The current problem with e-mailed coupons, said Meyers, “is that you have to print them, so it's not a time saver.”
Still, he continued, “online coupons of all kinds represent less than 1% of the overall coupon market, so brands should determine if the current technology is right for their consumer. In the meantime, there are a lot of proven ways to get coupons out to consumers, such as direct mail, online distribution offers for retailers, and in-store couponing.”
According to Meyers, 86% of the 300 billion coupons available each year are sent out through newspapers. The problem here, he said, “is that these coupons typically include a three month expiration date, which forces consumers to redeem quickly but is not an effective brand builder.” Despite the debate over coupon dissemination, Meyers is confident usage will continue to grow, noting that “the coupon industry has been around since 1894 and saves consumers $3 billion per year.”