The New ‘Coupon Chic’

I had wanted to write a more thoughtful and comprehensive piece on coupons but I’m really pressed for time. So here’s goes the shorter and less thoughtful version. Why I’m prompted to do this is because the recession has driven more and more people to look for deals online and created more momentum for coupons — both online and in mobile.

Recently comScore Chairman Gian Fulgoni wrote a piece entitled, “A Tipping Point for Online Coupons?” (Thanks Tim Cohn for pointing it out.) It contains some good coupon-related stats and interesting demographic observations:

CPG manufacturers distributed 302 billion coupons in 2007, up 6% and representing a whopping 16 billion more coupons relative to 2006. The face value of the coupons was $387 Billion, a big increase of 16% over the $337 Billion in 2006 and representing a 9% increase in face value. Free-standing inserts in newspapers continued to lead the ways in which marketers distribute coupons (88%), followed by handouts (5%), direct mail (2%), magazines (2%), newspapers (1%), in/on-pack (1%) and the Internet (0.4%), according to NCH Marketing.

According to CMS, a promotions logistics company, the boost in value and sheer number of coupons available helped improve redemption in 2007. Consumers turned in $2.8 billion of the total $387 billion in available coupon value. That added up to 2.6 billion coupons redeemed in 2007, the first time since 1992 that redemption volume did not decline.

So less than 1% of coupons are distributed online. And the dollar value of coupons redeemed is .007% of the total face value of coupons distributed in the US across all media.

Using comScore’s consumer panel Fulgoni segments and analyzes the growth in visitors to online coupon sites by income level:

Source/graphic: comScore

This is very interesting and a bit challenging to explain, other than the fact that upper income users may be more aware of all their options and may be more “deal savvy.”

In addition, the NY Times ran two pieces recently about coupon sites and the resurgence of coupons:

• This Season’s Must-Have: The Humble Coupon

Already, there are some signs of a nascent coupon chic: The Lucky Brand of apparel sold by Liz Claiborne is offering coupons on a humorous holiday Web site (luckybuckoff.com). The more skillfully computer users play a game, the larger the discount they earn on coupons redeemable at stores or on the regular Lucky Web site (luckybrandjeans.com). The discount, 20 percent off for every player, can be raised to 25 or 30 percent.

• In Lean Times, Online Coupons Are Catching On: offers a roundup of numerous coupon sites, including the very effective RetailMeNot. This was, conceptually, the kind of site I was envisioning when I called for a coupon destination some time ago.

Another thing that prompted me to write this was a conversation with a coupon startup in the NY area called 8coupons.com. The site is trying to sell coupons to local SMBs — lots of heavy lifting there — and is equally focused on the Internet and mobile as well.

Another benefit to coupons is that they’re redeemed (whether paper or mobile) at the POS so you can use them to track the effectiveness of online campaigns. Many CPG companies (among others)  have been afraid of fraud in using online distribution for coupons. But the economy is probably forcing their hand. Indeed, there probably isn’t an online purchase I make these days where I don’t search for a coupon before I check out (except on Amazon).

At any rate, the era of digital couponing (online/mobile) appears to have finally arrived.

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