01.01.2009 10:48 am

Click, Print And Save – Coupons Make Their Way Online


It has become a common practice in many American households to flip open the Sunday morning newspaper to check for coupon inserts. Coupons have indeed become a way of life for most shoppers who are on the lookout for savings, discounts or special deals. For retailers and consumer product companies, coupons have tremendous potential to reach millions of consumers- helping to build brand awareness and loyalty.  With the rise of the Web, coupons are no longer limited to the Sunday newspaper - as you may already know, they have made their way into the online world. Online coupons sites like Coupons, CoolSavings and Zixxo allow users to click on any offer and print out the slip to redeem for savings during the purchase. Whether it’s a $1 off on microwave popcorn or a $2 savings on moisturizer, getting special deals is at your fingertips. According to the Promotion Marketing Association, the use of online coupons is rising rapidly, by more than 50% a year.  However, this figure, accounts for less than 1% of the consumer goods coupons redeemed.


Paper coupons have always been one of the most effective tools that brand marketers use to boost sales and build relationship. People love coupons; and, as such, coupons have been a motivating factor in driving consumers to retail stores - even if the redeemable savings on consumer products were small. Consumer surveys have shown that 76% of Americans use coupons and that coupon inserts are the second most read part of the Sunday newspaper after the front page. As the Internet continues to have an impact on our daily activities, the coupon business is no different. While paper coupons target virtually anybody, online coupons aim to offer a more targeted delivery – reducing the number of unused and unredeemed coupons. An estimated 99% of the roughly 300 billion coupons distributed each year in the US go unredeemed, but that may be about to change with the targeting capabilities that the online world has to offer.  In addition to consumer savings, online coupons are also an effective tool for gathering consumer information and databases in exchange for coupon offers.

Online coupons are gradually being adopted by retailers and consumer goods manufacturers.  A recent survey of 100 large retailers by the E-tailing Group revealed that 20 of them now offer online coupons, compared with just five a year ago. Online coupon sites like Coupons, CoolSavings and Valpak are just some of the sites offering special discounts and savings. CouponCactus is another recently launched site that not only offers thousands of coupons from well-known online stores, it also allows shoppers to get cash back on purchases and earn bonus commissions on purchases made by members they refer. The Internet assault on paper coupons is more imminent with Google’s move into the local coupon market. Google has recently teamed up with Valpak to enable businesses to add discount coupons to their listings on Google Maps for free. Google also has plans to let AdWords advertisers drive traffic to their Google Maps coupons' page through AdWords. Moreover, coupons are also being test via mobile phones. Last month, Cingular teamed up with Access 360 Media and a number of retailers including Quiksilver, Mandee and f.y.e to offer mobile coupons to Cingular’s young adult consumers.

As of 2006, consumers have printed approximately 697 million Internet coupons, a 3.4% increase over 2005. Out of that figure, only 6.2 million were redeemed for savings. Now, marketers have the challenge of identifying an effective way to reach out to a certain target group and motivate them use online coupons. The use of E-mail coupons can help maintain an on-going dialogue among loyal customers. To build buzz or marketing campaigns around younger audiences, brand marketers should make the most of social networking sites, blogs and RSS feeds, etc. Moreover, online coupons will likely appeal to a certain demographic group. For example, advertising a coupon about baby diapers will likely appeal to moms reading an article about tips on taking care of an infant. This kind of selective advertising and promotion activity based on a user’s browsing interests will likely see a higher conversion rate.

Online coupon use is still in the early stages, but it sure to catch on soon. Before you know it, the next big thing to happen in the coupon business might be a simple flick of the wrist to whisk your mobile phone past that cash register scanner to cash in on your coupon savings. Watch out..


Resources: New York Times, Forrester Research, Forbes

Bob Rattivarakorn
Trends Research Analyst

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