Digital Coupons: Must Be More Than Discount Flyers

A recent study on the impact of coupons concluded that they're still very popular with shoppers and can help drive loyalty, footfall and increased customer spend. The study also found that there were 6 percent fewer coupon redemptions in 2017 than the year prior. Ironically, this is good news for retailers and marketers.

How is this good news, you ask? It's my personal belief that the decline in the number of coupon redemptions is a sign of increased intelligence and efficiency among retail marketing teams. In my experience, relevant offers (generally) make up just 10 percent of coupon distribution, but 30 percent of redemptions. Let me elaborate.

We often think of coupons as something that only the most price-conscious consumers consider a major part of their shopping journey. It takes a lot of time and commitment to sort through the mail to find relevant offers or hunt them down online. With nearly 90 percent of all distributed coupons coming in the form of free-stand inserts (FSIs), the consumer pool naturally leans to those with a lot of free time and very tight budgets. Still, with 90 percent of coupon distribution, FSIs only make up 34 percent of redemptions.

That doesn’t mean coupons are going away. In fact, 72 percent of coupons used in 2016 were found to have a direct impact on shopping behavior. So, why are the numbers dropping at a 6 percent clip?

Simply put, the decline in the number of coupons is a sign that retail marketing teams are getting smarter and more strategic. Instead of mass email blasts, marketers are learning to be more precise with their targeting, and shoppers are responding. As marketers and retailers learn more about each shopper's behavior, they can eliminate spam and increase the number of relevant offers for each potential customer, driving engagement and redemptions.

What’s needed are tools to enable retail marketing teams to connect with shoppers via media they prefer (e.g., digital, paper receipts, etc.) without burdening retailer IT and operations departments. This will improve near-term engagement and generate long-term loyalty.

Digital coupons can be integrated into a retailer’s e-commerce strategy, in-store experience, mobile applications, and both printed and digital receipts. Coupons are, on their own, useful for driving sales. Furthermore, in combination with other marketing initiatives, they become a powerful marketing channel that enables retailers to create in-store campaigns in a few key strokes. More than just a discount flyer, digital coupons have the ability to change the way the industry approaches in-store retail marketing.

Mike Grimes is the CEO of Ecrebo USA, a point-of-sale marketing specialist that enables retailers to deliver targeted offers to customers alongside their receipt or digital receipt.