Evolution of the Coupon

By: Susan Mudd, Client Marketing Director, Valassis
Published Friday, Sep 2, 2016



Evolution of the Coupon

There are few things in this country that have had more staying power than the humble coupon. For 130 years it’s had its twists and turns, and has remained a key component of consumers’ lives. The key to this success? A constant ability to adapt to the definition of where, when and how consumers would like to receive the deal. So, since its National Coupon Month, it seems only right that we pause for a moment and pay homage to the piece of paper, or collection of pixels on a screen, that has embedded itself in the consumer psyche and intends to stay there.

If we’re going to examine the evolution of the coupon it makes sense to take a peek back at its inception, then head straight on into the future. What history shows is a dance between consumer and marketer, a shift in mindset that began in 1887 with the introduction of the very first coupon and continues to this day:

Evolution of the Coupon: A Dance Between Partners

chart

This give and take between marketer and consumer remains in 2016, especially as consumers continue to grow their use of digital coupons – up 31 percent since 2016.

Adapting to the Need

Most dances have a lead partner, but not so for the Dance of the Deal.  The delivery of the coupon has adjusted to who’s leading at the moment (the retailer, the manufacturer or the consumer), which makes it an impressive partner. Think Hollywood shape-shifting. Think Harry Potter’s Metamorphmaguses or the T-1000 killing machine in Terminator 2.  Likewise, the coupon has had an uncanny knack for shifting form to accommodate consumer demands and marketer needs.

As an example, the coupon has adapted its form and delivery to accommodate the shift in U.S. population, which has become more diverse. Hispanics now represent the largest growing segment of the U.S. population7, their purchasing power reached $1.3 trillion in 2015 and 92 percent of them use coupons from all sources8. Baby boomers and matures, long the standard user of the printed coupon, are now wired digitally, with 52 percent printing out coupons they receive via email and 43 percent printing offers from websites9.  Then there are the 88 percent of millennials-- especially those with children-- who clip offers from both print and digital sources 6. As the fabric of this country shifts, so does the way in which marketers deliver, and consumers receive, the coupon.  Shape-shifting at its finest.

So, What’s Next?

The people have spoken. A 2015 survey indicates that 65 percent of shoppers have remained consistent in their coupon use and 27 percent reported increased usage, thanks to digital10.  As time goes on, consumer demand will fuel the fire for more diverse coupon options, which will likely be driven by these factors:

  •  Technology: Wearable technology will shape access to more coupons (think Apple watch);
  • eCommerce: According to IRI, the internet will account for 50 percent of industry growth in the coming years11. The new acquisition of Jet.com by Walmart will add to this momentum as the rush for ecommerce intensifies and consumer shopping habits evolve. In fact, 51 percent of value-seeking consumers agree that they would be more likely to shop for groceries online if they could use coupons12;
  • Smart Coupons: More insight and data will be attached to the delivery of each coupon to meet demands to personalize the consumer experience;
  • Distribution Innovation: With the maelstrom of new innovation, connectivity challenges, and third-party digital coupon provider battles, Consumer Packaged Goods companies (CPGs) will have to reinvent their coupon distribution models. “We have to embrace the future and innovate ways to take advantage of the efficient distribution offered by print, but with flexible, dynamic, targeted content to meet the needs of the new consumer,” said Jay Webster, Senior Vice President of Engineering and Product, Valassis. In essence, the consumer has to be restored to her rightful place-- at the center of the savings experience.

So, if you’re wondering about the future, the coupon adjusts, corrects and adapts. It is unstoppable, and it changes form and appeal to meet the needs of tomorrow’s consumer who has demonstrated time and time again that the concept of a good deal never goes out of style.

Sources:

1Coupon Sherpa: A Brief History of Coupons;
2Valassis.com;
3retailwire.com: Kroger and P&G in Digital Coupon Test, January 2008;
4www.retailmenot.com/blog/sc-history-of-coupons;
5RetailMeNot Shoppers Trend Report, 2014;
6Scarborough Multi-Market, 2012 – 2016, Release 1 data, digital coupon use = email, internet sites/apps, QR code or text messages;
7IRI: Connecting to the Hispanic Consumer, July 2015;
82015 Coupon Intelligence Study, conducted by Ipsos on behalf of Valassis;
9Prosper Insights & Analytics™, Media Behaviors & Influence™ Study, 2016.  Boomers and Matures = consumers born in 1964 or earlier; 10inma: Is the future of coupons mobile? Nov 2015;
11IRI:Taking Stock of CPG Past and Future, January 2016;
122016 RedPlum Purse String Survey, top two box.