By Shelby Saville, SVP/Managing Director
Recently coupons have changed from something suited for moms and grandmas or those on a tight budget to the mainstream man or woman. Coupons have become everything from a way to connect with friends and be “in the know” to a downright sport.
The Recession has changed the perception of using coupons
During the recession, coupons and deal sites flourished as consumers began watching what they were spending and wanted to feel as if their dollars were going further. In a time where people needed to cut back, deal sites such as Groupon and Living Social became a way to still enjoy “luxuries” while staying on a budget. Although print coupons still outnumber digital coupons by 3 to 1, digital coupons and deal sites skew more affluent. More importantly, because online coupons have appealed to a demographic that were previously less active with coupons, brands can expect redeemers of digital coupons to be composed of a higher percentage of new buyers.
Groupon and its many copycats have made it social
Daily deal sites, such as Groupon, are a different animal than digital coupon sites. Daily deal sites tend to be younger (18-34) and even MORE affluent than digital coupon users. The social nature of the daily deal sites has allowed the retailer to break into a younger demographic that may have overlooked coupons in the past. They also offer an element of being the person in your social circle that is the most “in the know,” as these sites currently focus on local places. In addition to the social element of daily deal sites, according to many studies, the number one reason a consumer “fans” a brand is to receive deals and offers. Consumers have come to expect unique and deep discounts coming from brands through the digital space. They also expect to be able to share the coupon with friends. Fifty-four percent of internet users cited that they were likely to share coupons/discounts. This ranks just below funny videos, family pictures and news about family and friends. With Facebook looking to insert “deals” into their social platform, they are poised to dominate the social couponing arena.
TLC has made it a sport
Coupons have gotten into the pop culture vernacular due to the success of TLC’s Extreme Couponing show. It is one of the top 5 successful launches in TLC’s history. The show currently has propelled TLC into the #1 position for ad supported cable during primetime. Pre-recession, this show may not have had the same “awe” that it does for viewers. Although, this “awe” may be short lived as accusations of coupon fraud and potential retailer backlash seems imminent as these shows focus on people who appear to game the system.
Perspective Takes Form
Especially in today’s financial climate, coupons can be a very powerful part of the marketing mix. Consumers see coupons as relevant to the purchase of a can of soup as they do to a gift card at the latest hot restaurant. That said, although the coupon “tool box” has gotten larger, it is still just one component of the mix. Understanding what various forms of offers and coupons can do to help move consumers from intent to action is a key driver to boost trial and/or sales. Increased consumer comfort level can come at a price as well. Too strong of a reliance on coupons to drive action can create the consumer mindset of waiting for the deal. Deal sites/ social coupons are skyrocketing in size, but it is important to test these sites to determine how to make the economics work in your favor. Even though the landscape has changed, the fundamental competitive advantage is still rooted in an understanding of how to use coupons and deal sites to drive long term value for the brand. We believe that coupons can help facilitate a connection of people to brands, but it cannot be the glue that holds that relationship together.