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Top Trends in Sales Promotions – Coupons Industry

This articles was initially published in Oct 2008. Sale Icon

According to a recent survey conducted by a sales promotion startup, over 50% of the people in US use coupons While, Internet coupon usage is growing, consumers still prefer clipping coupons from the newspapers and mail-in coupons than printing them online. Top reasons for not using coupons were lack of awareness of online coupon websites, time consuming to search online, printing hassle and some well just don’t want to appear cheap.

With continued economic turmoil and predictions of global recession, retailers are bracing for a dismal holiday season this year. People are tightening their purse strings and looking for deals this holiday season. Expect retailers to provide last minute, deep discounts. Here are short term and long-term trends in the coupons industry:

1. Couponing on the rise – Sales promotion industry has been in a decline for the last few years. Over 300 Billion coupons a year are issued in the United States alone; less than 1% are redeemed [1]. However, whenever there is economic hardships, coupons usage increase. This time is no different; coupon usage is already up by 14% this year.

2. Retailers offering more frequent but restrictive sales promotion this year – According to a recent CNN news article, expect to see a lot of deals this holiday season. However, retailers are going to offer discounts, they will make coupons restrictive by imposing shorter redemption duration periods and more purchase requirements to use the coupon. [2]

3. From paper to digital coupons – Over 90% of coupons used today are offline coupons newspaper coupons and those mailed directly to you. However, with growing online commerce, more and more people are using online coupons The online coupon industry grew by over 500% last year. [3] Online coupons are becoming safer to use and more retailers are providing print-at-home coupons or coupon codes for shopping online.

4. Improved digital coupon technology – Coupon fraud is a big concern for retailers. Digital coupons can be copied and manipulated by hackers. With new guidelines on digital coupons from (Association of coupon professionals) ACP and (Coupon information center) CIC, which monitor the industry for coupon fraud, progress has been made to prevent counterfeiting of digital coupons.

5. Aggregation of online coupon data – There are over hundred and fifty online coupons websites. We are all wary of having to navigate hundreds of coupons sites today to search for deals, and even if we get a coupon code for a store or brand that we like we find that the coupon doesn’t work. Fortunately, there are few websites that have started to aggregate coupon data from various sources and check the validity of coupons This is a much-needed feature.

6. Connecting online coupons with existing store-loyalty programs – Most of us already participate in loyalty programs of our grocery stores. AOL shortcuts allow shoppers to search for coupons of favorite brands online and use those coupons with loyalty card in store without having to clip or print coupons.

7. Mobile Coupons are here – Imagine shopping in your favorite store and presenting a coupon at checkout without doing prior online search and printing online coupons or clipping newspapers coupons and then remembering to use them on your next grocery shopping trip. It will be possible with mobile coupons Already there are a few companies with whom you can subscribe mobile coupons Although still in the early stages, location based mobile coupons is a promising area. Mainstream use of mobile coupons is still at least a year away.

8. mCommerce innovations – A mobile mCommerce company Erico is creating innovative mobile hardware and software solutions. With Ecrio’s MoBeam technology and small key chain-based device (called the ClipPod”), Erico is working on creating next generation mobile redemption solutions. Again mainstream use may be a few years away.

So what are the implications of these trends for shoppers, manufacturers and retailers?

Digital coupon use is gaining ground. Look for continued innovation with digital and mobile coupons which will benefit all.

Shoppers will get relevant information to make informed buying decisions resulting in cost savings and shorter buying process.

Besides attracting consumers in tight economy, retailers and manufacturers may also want renew their interest in sales promotions as effective marketing tool. Whether it is to get consumers to try new products, create one on one relationships with customers, drive sales away from their competitors, get rid of their perishable inventory and clearance items or sell everything on a going out of business sale. Coupons and digital sales promotions are here to stay!

Sources –

[1] CMS, Carolina Manufacturer’s Services

[2] CNN – Economic shock gives rise to coupon cutting.

[3] eMarketer, Mediamark Research, CMS, Carolina Manufacturer’s Services

This articles was initially published in Oct 2008. This content of this article cannot be reproduced, distributed or republished elsewhere without author’s written permission. Key words – Retail Marketing, Digital Coupons, Sales Promotions, Rebates, Discounts

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