Can’t Buy My (Consumers’) Love
Gimmie a Beat
It’s no surprise to retailers that coupons are a huge part of their customers’ lives. With 90% of customers using coupons on everything from face wash to Fritos, there’s little evidence to suggest that coupons will be going anywhere anytime soon. What may have surprised retailers is the fact that this usage isn’t limited to a few bargain hunters – everyone and their grandma is using coupons. No really, coupon usage is consistent across generations, from millennials to baby boomers. Not that they can really be blamed – everyone loves a good deal. Coupons have become such a huge part of customers’ shopping patterns that it’s estimated that by 2019, $31 billion in coupons will be circulating in the marketplace. That’s a lot of savings for the consumer, and a big investment in what will (hopefully) turn into repeat customers.
While many retailers are evolving their coupon strategy to include digital coupons, their bread and butter is still print. Just like weekly ad circulars, it’s likely that we won’t see the end of print coupons for quite a while, even as retailers’ coupon mix includes more digital. Perhaps even more shocking than the perseverance of print coupons is the segment using the most coupons. Customers making $100,000 annually are most the likely to be using coupons, with some even going on to become extreme couponers, complete with enviable stockpiles.
When looking at coupon clipping customers, there are three different segments that are important for retailers to consider when establishing their coupon strategy. Each one of these segments handles their couponing a little bit differently, but they all have significant buying power, which is worthy of your attention and special consideration.
But first, let me take a selfie
While coupon usage is high among consumers in general, it’s surprisingly even higher among millennials. Part of the reason that millennials love coupons is because they give them the personalized shopping experience they crave and make them feel like they’re besting retailers by getting the best deal possible. You could even go so far as to say they’ve become obsessed with deal hunting, spending about 2 hours per week searching for coupons and deals online. Sites like Groupon and RetailMeNot and apps such as Ibotta are only helping to fuel the coupon clipping fire. All the savings that millennials are racking up is truly astounding, adding up to about $3.5 billion each year. These savings allow them to make splurge purchases – looking at you, Gucci belt – while maintaining their budgets and avoiding any shopper’s remorse. Millennials are also using social media as a means to share the coupons they find with their peers.
To keep millennials as customers, coupons should be posted on social media and online where they’ll be found. Using consumer data to make their coupon clipping experience more personalized will only help keep them engaged. Eventually, coupons could be nailed down to be so personalized that shoppers are prompted to buy products like Tide Pods on the day they are most likely to do laundry. To take it even one step further, retailers could be tallying savings on their app or online loyalty page. This will show millennial customers how much they’re saving and they’ll get a better idea of where that extra cash can be spent.
Cat’s in the Cradle
Parents (adults having at least one child at home under the age of 18) have become more like Santa when it comes to their weekly shopping. Compared to their couponing counterparts, parents are more likely than any other segment to be influenced by coupons. Before a shopping trip, parents are making their list and checking it twice to make sure their coupons can be applied. In fact, almost half of parents admit to shopping at a store that is not their preferred shopping destination to take advantage of a better deal. While both print and digital coupons are causing them to branch out when it comes to shopping, parents are more concerned about where they can redeem their print coupons when compared to digital ones. To get parents on board, retailers need to be actively promoting hot deals in their print coupons. They also need to be price matching deals that their competitors are advertising to keep larger baskets in your stores. If you can prove your product and coupon assortment are the best, parents will be loyal shoppers and streamline their shopping to your location. To take this one step further, retailers could introduce a digital price check into their mobile apps. Parents would be able to scan their receipts once they finish shopping and get cash back on their method of payment if another retailer had a better deal.
Compared to other shoppers, Hispanic consumers are a little more thoughtful when it comes to their shopping experience. As a whole, they are looking for the best deal possible and will absolutely switch where they shop to take advantage of a better deal. Unlike the average shopper, Hispanic consumers tend to be more influenced by digital savings platforms. They use these digital platforms while shopping in-store and are more likely than millennials, parents and your average Joe shopper to be actively downloading coupons to their smartphone or clipping onto their loyalty card as they are shopping in-store. In fact, almost half of Hispanic consumers have increased shopping at stores because of their digital coupons and digital in-store loyalty programs. To keep Hispanic shoppers at their stores, retailers should continue to make in-store promotional signage including coupon offers prominent at the shelf level. Retailers could also use their savings apps to track customers as they move throughout the store. Once a customer gets to an aisle with a deal, they’d receive a push notification prompting them to clip a coupon and add it to their loyalty card.
That’s a Wrap
Coupons will continue to flex their influence in customers’ shopping habits for years to come. While digital coupons are the way of the future, it’s important to remember that print is not dead. Having a wide range of couponing opportunities allows you to capture customers from many different segments and create repeat customers.