Coupons Generate Brand Loyalty, Fast Action and More Spending

RetailMeNot logoLast week Groupon announced disappointing earnings. In the wake of such news I’m always asked about whether consumers are losing interest in “deals” or coupons.

Many people have lost interest in Groupon-style daily deals. However Americans remain coupon crazy.

Brands and many retailers are ambivalent about coupons but use them because they continue to “work.” Evidence of the continued effectiveness of coupons comes most recently in the form of a survey (n=500 US consumers) conducted by Forrester, paid for by RetailMeNot.

Notwithstanding Groupon’s stumbles, email remains the top way people obtain digital coupons, followed by search.

Coupon distribution

Despite the fact that only a tiny fraction of all coupons in the US are distributed digitally, they can have a powerful affect on shopping behavior. Below are some of the top-level findings from the survey:

  • Coupons most effective type of retail promotion
  • 68% believe that digital coupons have a positive impact on a retailer’s brand; an equal number say coupons generate loyalty
  • 47% open to trying new brands if they receive offers via smartphone
  • Coupons received on PCs but especially mobile devices lead to quick action: “More than 90% of smartphone and tablet users redeem their digital coupons within several days”
  • 55% of smartphone coupon users will spend more money during their online or in-store visit — the majority at least $25 more

Coupons RetailMeNot

Here are the things that struck me:

  • Coupons positively impacted retailer brand perception and loyalty (mild surprise)
  • Coupons generated nearly immediate redemption (no surprise)
  • Coupons motivated additional, unplanned spending (modest surprise)

Finally the survey asked about how consumers discover coupons on their mobile devices in particular. There were roughly 12 answer choices with fairly even distribution across the top categories: email, search, apps, push notifications, from retailers and others.

This “diversified” distribution indicates to me that the digital and especially mobile coupon world is still somewhat chaotic and there remains a meaningful opportunity for either retailers themselves or a third party to provide better or more comprehensive access.

Of course, RetailMeNot and a few others are jockeying for that position.

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One Response to “Coupons Generate Brand Loyalty, Fast Action and More Spending”

  1. Ariane says at

    While coupons are definitely motivators, I think it is important that companies use the right strategy to avoid annoying their customers and bombarding them with coupons. Like anyone else I enjoy a good deal, but when I am constantly overloaded with texts and emails it gets old pretty fast, because like most people I am not looking to purchase something every single day. When using best practices for email and text coupons, this of course will increase sales, but perhaps even giving customers the option for how frequent they would like to be updated could reduce bounce rates, unsubscribes, and annoyed customers.Redbox in particular has been getting on my nerves with this.

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