Most Plan More Coupon Use in a Recession, Many Attracted to Paperless

April 7, 2008

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Free-Standing Inserts & Circulars | Newspapers | Retail & E-Commerce

Tough times and technology advancements portend a coupon-usage renaissance among US shoppers, with 67% of those surveyed by ICOM Information & Communications (ICOM) saying they are more likely to use coupons during a recession.

Of the 1,529 US consumers participating in the survey, 45% said they were much more likely to do so, and 22% said they were somewhat more likely.

Over the past 10 years, the average coupon redemption rate has declined to less than 1.0%, from a level of 1.6%, across all US coupons distributed, ICOM said.

Among the key findings about coupon use in a recession:

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  • Broken down by age, 71% of consumers in the 18-34 year-old age bracket said they are much more likely or somewhat more likely to use coupons in a recession. That compares with 68% in the 35-54 year-old bracket and 63% among those 55 years and above.
  • Geographically, 70% of Midwesterners said they are much more likely or somewhat more likely to use coupons in a recession, versus 69% of Westerners, 64% of Northeasterners and 62% of Southerners.
  • Income didn’t make a significant difference, with 68% of those earning less than $50,000 a year saying they are much more likely or somewhat more likely to use coupons in a recession, compared with 67% for those earning more than $50,000.

Historically, coupons are a key area in which manufacturers operating in economic hard times have not cut back. In the weakened economy of 2001, ICOM tracking showed a significant increase in the number of coupons consumers redeemed each week.

“The consumer incentive certainly is there,” said Peter Meyers, ICOM marketing vice-president. “Look at it this way: Households of two adults and two children who use coupons wisely can save 25% on their grocery bill annually, without cutting purchases. That saves $2,400 a year based on a typical $800 a month grocery spend, which outstrips the $1,800 economic stimulus check this family has coming in May from Washington.”

Among the findings on paperless coupon technology:

  • Some 58% of consumers responding to the ICOM survey said their coupon use would increase if they could download a coupon from the internet and have it automatically connected to an electronically swiped frequent shopper card.
  • Of that 58%, 35% said they are much more likely to use such a card and 23% said are somewhat more likely. (Consumers using these paperless coupons receive the discount at the register without having to clip and carry. AOL, Kroger, General Mills and Procter & Gamble are involved in programs testing these high-tech coupons.)
  • No less than 77% of consumers in the 18-34 age group said they are much more likely or somewhat more likely to use coupons if given access to this paperless technology. In the 35-54 age group, 63% said they are much more likely or somewhat more likely. In the 55 and over bracket, 47% said they are much more likely or somewhat more likely.

“These advanced coupons have attracted some consumer interest and drawn media attention. Put in perspective, online coupons of all kinds represent less than 1% of the overall coupon market and consumers to date have expressed a strong preference for receiving coupons in the mail,” Meyers said. “Brands should pay close attention to determine if this technology is right for their consumers.”

“Marketers have the opportunity to discard the old-school thinking about coupons and be smarter this time around. There’s no need to send out more mass coupons, such as dog food coupons to households that don’t have pets. Brands should do their homework and send offers relevant to the needs of individual consumers,” Meyers said. “And consumers should be given more time to redeem coupons – three months is not enough.”

About the study: 1,529 US consumers participated in ICOM’s nationwide survey of US households, conducted in mid-February. The online research was sent to 40,000 households in the ICOM Shopper’s Voice database. Based in Toronto, ICOM is a provider of targeted list, data communication solutions and analytic services for the consumer packaged goods (CPG), over the counter (OTC), pharmaceutical, market research, and auto industries in North America, as well as the direct response sector in Canada.

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