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BizReport : Ecommerce : October 14, 2020

Expert: The coupon is coming back

Coupons have long been a stable of consumers in the offline world, and for many years digital coupons and coupon codes have been popular for online shopping. But, according to one expert, the coupon is getting even more attention because of the COVID19 pandemic as consumers try to make their dollars go farther. Here's what merchants can do.

by Kristina Knight

Kristina: What trends are you watching with coupons currently?

David Mounts, Chairman & CEO, Inmar Intelligence: The coupon industry is going through a significant transition as marketers on both the retail and brand side are learning how to adapt to a new environment in which shoppers' demands are rapidly evolving. Safety has joined cost and convenience as a key shopper requirement and we're seeing an increasing number of consumers adopting some form of hybrid grocery shopping -- employing a mix of in-store shopping and grocery e-commerce to "find" convenience, protect their health and still enjoy the personalized engagement that they've come to expect from trading partners. 
38% of shoppers surveyed by Inmar Intelligence report that they shop both online and in store for their regular, weekly grocery purchases.
At the same time, more and more shoppers are using a combination of traditional paper coupons (FSIs) and digital coupons to meet their savings and security needs. Today's shoppers are aggressively looking for value and savings, so it's essential that retailers continue to provide price incentives and coordinate with brands to optimize both consumer and trade promotions.
Health concerns are also moving many consumers to pursue a contactless shopping experience by turning to e-commerce and digital coupons to eliminate, or limit, physical interaction. With this digital transformation in full swing, marketers  need to understand shoppers' media preferences and work to deliver promotions -- and a personalized shopping experience -- through each shopper's medium-of-choice.
Kristina: Did the pandemic increase consumers' use of either physical/digital coupons or deal sites like Ibotta?

David: The pandemic has, most definitely, accelerated shoppers' adoption of digital promotions as their preferred promotion method. This was made strikingly clear in the second quarter of this year when, for the first time ever, redemption volume for paperless, load-to-card offers exceeded that of traditional paper coupons. 
This isn't to say that traditional paper coupons no longer have a place in the media mix. However, with newspaper subscriptions continuing to shrink while distribution volume for digital coupons continues to grow, the over-time decline of FSIs will continue as well. They're not going to disappear completely anytime soon as they're still popular with some shoppers and marketers but the future for promotions is decidedly digital.

Kristina: What is driving consumers' interest in coupons?

David: In a word, "economics." With millions of Americans either out of work and/or facing increased economic pressures, coupons represent an important means for consumers to stretch their grocery budgets and help feed their families. While the current downturn has not formally been designated a recession, it carries all the earmarks and coupon redemption has, historically, increased during a recession. We anticipate coupon redemption to increase in the fourth quarter -- and beyond -- as the pandemic continues with no real sign of consumers' current financial challenges lessening. 
36% of shoppers surveyed by Inmar Intelligence say frequent sales and specials are "most" influential in determining where they go in store to shop.

Kristina: What are the most important elements of a coupon campaign?

David: First and foremost, the offers included in a campaign must be relevant to the audience(s) being targeted and they must provide real, and easily perceived, value to shoppers. The offers must also be delivered through the appropriate media to ensure they reach the right shoppers at the right time. By employing a media mix that ensures offers are made available across all appropriate consumer touch points marketers will more effectively engage shoppers and have a much greater chance of activating targeted consumers.

Kristina: How can merchants and brands build loyalty through coupons?

David: For all that consumers want from retailers and brands in terms of safety, convenience, etc. value remains a critical consideration among consumers when choosing where to shop and which brands to purchase. Competing on price full time is not a viable option for most retailers and brands but regular deployment of coupons is an efficient and effective means of projecting a positive and attractive price image to shoppers. Occasionally (but regularly) rewarding already loyal shoppers with savings opportunities is an excellent way to retain their loyalty while pursuing new or lapsed shoppers with attractive offers can be very effective in bringing them to -- or back to -- the store and/or brand.  
Among shoppers surveyed by Inmar Intelligence who reported having recently tried an alternative brand 20% said it was due to lower cost.

Tags: coupon trends, ecommerce, ecommerce trends, Inmar Intelligence, retail coupons, retail trends

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