Printable coupons and vouchers have never been so popular, but marketers using them solely for discounting are missing a trick if they want to grow market share during the recession and beyond.
The shift in consumer behaviour seen in the current recession is the most marked the retail industry has witnessed in many years. Liberal spending has ceased; frugality reigns. So much so that it is no longer seen as embarrassing to haggle for purchases, buy cheaper brands or use coupons to get a better deal. While many retailers have been hit hard, there are ways of working the trend to their advantage through clever promotions, as a number of the grocery giants have shown.
Behavioural shifts
Entrenched consumer habits that have built up over time and become habitual consumer behaviour are now being challenged: shoppers are switching supermarkets, using different criteria to drive their choice of purchase – in short, they are re-evaluating the way they shop. For brands and retailers battling it out for a diminishing share of consumers spend, this is a rare opportunity to challenge consumer loyalty with cleverly-targeted promotions. It is no coincidence, then, that sales promotions are bucking the trend of current marketing cutbacks.
Online promotions
Online printable coupons and vouchers (those that appear on the web but can be printed off to be redeemed in store), have seen a particular surge in popularity - the acceleration of a trend that has been building over the last two to three years. From the marketer’s perspective, this is a genuine opportunity. Online printable coupons can be extremely effective and offer unparalleled speed to market (a campaign can be turned around within two weeks, in contrast to a direct mail campaign which could take several months to roll out). They can be applied extremely creatively too, as part of an integrated campaign - both to help convert awareness and interest to actual consumer purchases, or to measure a campaign’s effectiveness. What’s more, because consumers are able to select which coupons they print, the redemption rates are typically far higher than those of more traditional coupons.
Sales fatigue
Marketers who use coupons and vouchers simply to extend their sales are missing a trick. Today everyone is having a sale; it has become the norm. Not only is this unsustainable from a profitability perspective, protracted discounting also risks damaging the brand – it smacks of desperation and falling value. For the retailer, online printable coupons offer a way to get new customers into a store. For FMCG brands, they provide a means of offering an incentive or discount without compromising their long-term market positioning. Take the example of Kimberly-Clark’s recent Huggies Newborn promotion, exclusive to Sainsbury’s.
Eager to influence the earliest purchases of expectant and new mothers, Huggies has been running an online-printable coupon promotion with the supermarket chain. This offers visitors to a parenting web site (bounty.com) a free Mother-and-Baby Bundle gift set when they purchase a pack of Huggies Newborn nappies at Sainsbury’s. The strategic value of such a promotion to both Kimberly-Clark and Sainsbury’s is clear, especially when weighed up against the relatively low cost of implementing the online printable coupon scheme and the tight targeting via the chosen web site. Sainsbury’s has been able to attract mums-to-be into its stores to browse its babycare category, while Huggies has been able to get its brand in front of new mothers at a critical time in their purchase decision-making.
Capturing new customers
This example highlights so much more than simply the potential to discount on price, or to cement the loyalty of existing customers. It is about influencing new customer behaviour, and expanding market share, while enhancing rather than devaluing the brand of both the retailer and the product manufacturer. For the online printable coupon, this is just the beginning. Once a ‘nice to have’ element to a marketing campaign, marketers are now realising their strategic value as part of a well thought-out campaign, particularly as they strive to demonstrate a return on investment on their promotional spending.
Consider a brand which has just spent £1 million on the launch of a new product. The online printable voucher’s role here, as part of an integrated campaign, might be to encourage consumers to try the new product – thereby taking them a step closer to buying it; or encouraging them to buy it again, turning a one-off purchase into habitual behaviour. Then there are the huge customer databases in which the brands have invested so heavily.
Online printable coupons offer them a chance to go back to these customers time and again, with targeted offers – not merely at Christmas or some other significant date in the calendar. The key to sustained success is to think laterally, and apply coupons and vouchers creatively. While price sensitivity during a recession is inevitable, marketers must be mindful of the fact that the economy, however dire now, is cyclical and will in time recover. Those who too heavily favour discounting now over more strategic, brand-supporting initiatives may find they have devalued their brand irreparably, hindering business recovery when the upturn comes.
Oliver Felstead, European General Manager at Couponstar.
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