|Digital Coupons are Driving Retail
By: Danny Flamberg
If you think only little old ladies clip and use coupons; think again. Smartphones, load-to-card, plus other evolving technology against a background of stagnant wages are motivating and empowering a new generation of savvy coupon seekers and users.
A billion coupon users, roughly 55% of all US internet users, will receive 31 billion eCoupons and redeem about 9% this year. Usage, about 6 in 10 internet users, which includes basically all adults, is beginning to plateau. Digital coupons represent about 1-2 % of all distributed coupons but are disproportionately redeemed at a rate of 18.2%.
Coupons are distributed in free-standing inserts (FSIs) in the Sunday papers, by email as PDFs or print-your-own versions, as downloads on branded or coupon aggregator websites, from social media sites, as functions in branded or in shopping apps, at the point of sale, as plug-in codes or pre-loaded on grocery store apps or loyalty cards. Print still represents the vast majority of uses. But millennials lead the way in using and preferring mobile and online coupons. Over the next few years, with the decline of print, digital and mobile distribution and redemption will dominate.
eCoupons, mostly accessed by women using smartphones, drive store traffic. They are sought, found and used in-store, increase average or repeat purchases, impact brand awareness and switching and contribute to brand and/or product loyalty. And yet less than half of marketers use digital coupons or codes as part of their overall strategy.
Consumers looking for ways to reduce necessary and recurring expenses, focus on couponing for food, pizza, restaurant dining, clothing, haircuts, personal care products, car washes, and gas and oil changes. Brands are distributing online and printable coupons using email, SMS, websites, display and retargeted ads, Facebook, Twitter and selected influencer blogs.
Mobile distribution and use are projected to grow dramatically as loyalty cards and payments become part and parcel of regular smartphone use. Consumers will consistently seek out deals and discounts using eCoupons as a preferred instrument and they expect merchants to automatically apply coupon values to their shopping baskets. Anticipate much more real-time in-store collection and use as a by-product of immediate in-the-moment comparison shopping with widespread deployment of RFID beacons at retail.
To ensure success in using digital coupons, follow these three rules:
Keep it Simple. Online shoppers scan. They don’t read. Make the offer BIG and bold. Make the time frame easy to see. Specify qualifications, shipping costs and if the offer can be combined with others. Put the terms and conditions upfront in big type.
Go Low Involvement. Don’t make customers download software to print coupons.
Offer PDFs and simple ways to print or store the coupon digitally. The more time elapsed; the less likelihood of redemption.
Do the Backend First. Don’t even begin the coupon game until you’ve road tested the underlying technology. Make sure that POS, credit card processing, shopping carts and accounting systems can accept, process and fulfill their wish for a discount or a deal.
Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.
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