Leveraging Coupons in the Digital Age

April 28, 2016

The days of the blue haired-biddies and accordion coupon files are over. With the onset of mobile and internet coupon sites like Groupon and Living Social, as well as shows like “Extreme Couponing,” coupon clipping is now a sport for all ages and incomes … and retailers are keeping score.

“Coupon” is Not a Four-Letter Word
There was a time when a business owner would hear “coupons” and immediately think … “Great, discounts … there go my margins.” Today, coupons do not always have to equal discounts. While coupons offer consumers a chance to stretch their dollars further, they also offer real growth opportunities for retailers if they know who to target and leverage coupon delivery vehicles.

Coupons can and should be used as guest check/transaction builders and occasional drivers. While your coupon set should include at least one aggressive offer, “bundled” offers (grouping a few complimentary items with little to no discount) can help persuade a consumer that the value of the bundle is higher than if the items were bought separately, encouraging consumers to ultimately spend more due to the discounted entry price point.

Coupons also influence purchase decisions and can keep a brand in the consumer’s mind – they help people decide where to shop and what to buy. While all brands have their frequent and loyal shoppers, coupons can help capture switcher transactions (those consumers who consult their coupon drawer before making a purchase decision).

Delivery or Digital?
Twenty percent of consumers use digital media to find coupons; the majority of consumers still turn to weekly circulars in newspapers, in-store and Direct Mail to feed their discount addiction. Coupon vehicles (FSIs/Shared Mail/Direct Mail Postcards) act as broadcast media in terms of inserting brand presence into consumers’ homes. FSIs have the highest distribution and lowest coupon redemption of any coupon vehicle, while online coupons have the lowest distribution with the highest redemption. If you are looking for brand awareness, use FSIs, and if you’re looking for direct response, online coupons are your best bet.

Take a closer look the next time you get a Red Plum in your mailbox or those inserts fall out of your Sunday paper – the time, thought and detail put into the creation of these coupon vehicles is benefiting the many clients paying out those dollars. The mediums may change as the digital coupon continues to gain popularity, but the consumer’s drive for savings is here to stay.

Want to know how coupons can drive business for your brand? Contact us at solutions@oxfordcommunications.com today.  

Written by Lisa Skinner.