Coupons Drive Incremental Sales
MediaPost had an interesting post today about the importance of couponing especially in today’s economy. Digital couponing has risen dramatically in the last 12 months because consumers are more concerned with saving money than they were in recent years.
According to one study that was cited recently in MediaPost and published by ICOM, one out of three consumers report using more coupons than just one year ago. About half of males 18- to 34-years-old reported comparison shopping, with as much as 38% actively searching for coupons.
The big question that surrounds coupons in general, is whether the use of them cannibalizes an existing consumer base by driving them to buy your product at a lower price when they were going to buy it in the first place or whether they attract new consumers to your brand and increase market share.
According to a study from Coupons.com that was published in Q3 2009, online coupons do indeed drive new incremental sales, with as much as 40% of redemptions coming from new or lapsed buyers.
That sounds pretty good, but the other side is 60% are using the coupon when they probably would have bought the product anyway. I don’t think brands can’t sweat that too much though especially with where brand loyalty is at these days. 59% of consumers say will sacrifice brand names for a generic brand. Just think of the 60% as a continuing investment in brand loyalty in a tough economy. Marketers need to continue to follow this trend in regards to their own brand. If the data begins to trend that consumers will not buy a product without a coupon the brand is definitely seen better days.
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