Retail is in transition. Our local high street has been moved online.
Shopping has changed an awful lot in the 21st Century, and there’s no sign that customers are going to be reversing the trend of internet shopping any time soon – online retail sales in the US are set to total $4.5 trillion by the year 2021.
Is there any hope for traditional couponing amidst this seismic shift? Surely paper coupons are as dead as a Dodo; set to be cast aside by their quicker and easier to produce electronic counterparts.
Or are they? The statistics seem to suggest that there’s life in old-fashioned physical coupons yet. According to research conducted by Valassis, usage of paper coupons by has increased by 30% by users that already bargain savvy, and 32% of all shoppers are still partial to collecting coupon clippings from newspapers or other printed sources, according to the US-based Retail Feedback Group.
So are the reports of traditional couponing’s death premature? Further research points to an uncertain future thanks to distributor uncertainty – NCH Marketing Services reports that overall paper coupon redemption fell by 27% in 2017 owing to businesses aiming to shift their focus on to digital methods. But the Newspaper Association of America believes this is an error by coupon marketers, and claim that Sunday newspapers remain the number one source for coupon users to collect their clippings, with 61% of surveyed consumers agreeing.
What’s clear is that there’s plenty of uncertainty over the future of online coupons from industry professionals, so let’s take a look at three major points worth speculating.
1. Return on investment
It may seem counter-intuitive, but digital coupons typically have a lower return on investment (ROI) than their paper-based counterparts. According to coupons solutions company, Mandlik & Rhodes, digital coupons’ ROI is around 18% lower than paper.
This considerable gulf in profit margin is down to the much higher redemption rates of digital coupons. However, overall, there’s been a decline in redemption rates since 2011.
However, discount codes and vouchers are much easier to redeem online, which certainly helps to attract more customers, but the sheer density of people purchasing your products means that you’re making larger losses due to the smaller margin between sale cost and production cost.
This presents a dichotomy that will do doubt split some business marketing departments. Decision makers will need to ask themselves if it’s worth creating a widespread digital coupon marketing campaign that’s guaranteed to win customers and spread brand identity, or create a print campaign that’s more likely to earn customers while keeping an element of awareness for audiences that are exposed to the coupon without redeeming it.
This fact suggests that there’s still life in traditional forms of couponing, especially for businesses that are operating on a tighter budget and keen on winning and appealing to a new customer base.
2. Building brand awareness
Despite there being little doubt that paper coupons perform well as a tool for …read more
Read more here:: B2CMarketingInsider