Coupons Gain Momentum in Economic Downturn

April 11, 2008

asdamd/photos/stylus/22783-GirlShop.jpg
The recent economic downturn is inspiring consumers to actively seek out discounted goods. While consumers on average, tighten the reins on discretionary spending during times of recession, a recent report by Toronto-based ICOM Information & Communications L.P. indicates that they also turn to coupons and in-store discounts to make up for the economic slowdown.

ICOM surveyed 1,529 consumers in the United States during February 2008. The survey reported the following results:

-67 percent of consumers are much more likely, or somewhat more likely to use coupons during a recession.
-71 percent in the 18-34 age range reported being much more and somewhat more likely to use coupons in a recession; while 68 percent of consumers 35-54 agreed, and 63 percent of those 55 years and older were also much more and somewhat more likely to use coupons.
-70 percent of those in the Midwest would use coupons during a recession, with 69 percent of Westerners, 64 percent of Northeasterners and 62 percent of Southerners agreeing.
-88 percent of consumers earning less than $50,000 a year were more likely to use coupons, while 67 percent of individuals earning $50,000 or more per year would also use coupons.
-58 percent would use coupons more if they were downloadable via the Internet or if discounts were applied to an electronically swiped frequent shopper card.
-77 percent of consumers in the 18-34 age bracket would use coupons with paperless technology, including 63 percent in the 35-54 age group and 47 percent in the 55 and older range.

According to ICOM, during the last 10 years, the average coupon redemption rate is less than 1 percent, down from 1.6 percent for all coupons distributed in the United States. Those numbers could easily begin to increase as consumers seek out coupons during the economic lull.

In addition, Peter Meyers, ICOM marketing vice president, reports that with coupons, a typical four-person household can save up to 25 percent on their grocery bill over the course of a year, without making cutbacks in purchases. This savings would amount to $2,400 a year (based on an $800/month grocery bill).

“Marketers have the opportunity to discard the old-school thinking about coupons and be smarter this time around. There’s no need to send out more mass coupons, such as dog food coupons to households that don’t have pets. Brands should do their homework and send offers relevant to the needs of individual consumers. And consumers should be given more time to redeem coupons – three months is not enough,” said Meyers.

Rochester, N.Y.-based Harris Interactive confirms ICOM's survey, with a recent study reporting that 63 percent of adults will not make a purchase if a discount of some kind is not available. In addition, Harris Interactive reported that 56 percent of adults will look online for coupons and other discounts.

Both reports seem to indicate that retailers and small business owners would do well to offer coupons and discounts to consumers during this time, particularly making Internet and other electronic means of receiving discounts more readily available.

Coupons Gain Momentum in Economic Downturn

April 11, 2008

asdamd/photos/stylus/22783-GirlShop.jpg

The recent economic downturn is inspiring consumers to actively seek out discounted goods. While consumers on average, tighten the reins on discretionary spending during times of recession, a recent report by Toronto-based ICOM Information & Communications L.P. indicates that they also turn to coupons and in-store discounts to make up for the economic slowdown.

ICOM surveyed 1,529 consumers in the United States during February 2008. The survey reported the following results:

-67 percent of consumers are much more likely, or somewhat more likely to use coupons during a recession.
-71 percent in the 18-34 age range reported being much more and somewhat more likely to use coupons in a recession; while 68 percent of consumers 35-54 agreed, and 63 percent of those 55 years and older were also much more and somewhat more likely to use coupons.
-70 percent of those in the Midwest would use coupons during a recession, with 69 percent of Westerners, 64 percent of Northeasterners and 62 percent of Southerners agreeing.
-88 percent of consumers earning less than $50,000 a year were more likely to use coupons, while 67 percent of individuals earning $50,000 or more per year would also use coupons.
-58 percent would use coupons more if they were downloadable via the Internet or if discounts were applied to an electronically swiped frequent shopper card.
-77 percent of consumers in the 18-34 age bracket would use coupons with paperless technology, including 63 percent in the 35-54 age group and 47 percent in the 55 and older range.

According to ICOM, during the last 10 years, the average coupon redemption rate is less than 1 percent, down from 1.6 percent for all coupons distributed in the United States. Those numbers could easily begin to increase as consumers seek out coupons during the economic lull.

In addition, Peter Meyers, ICOM marketing vice president, reports that with coupons, a typical four-person household can save up to 25 percent on their grocery bill over the course of a year, without making cutbacks in purchases. This savings would amount to $2,400 a year (based on an $800/month grocery bill).

“Marketers have the opportunity to discard the old-school thinking about coupons and be smarter this time around. There’s no need to send out more mass coupons, such as dog food coupons to households that don’t have pets. Brands should do their homework and send offers relevant to the needs of individual consumers. And consumers should be given more time to redeem coupons – three months is not enough,” said Meyers.

Rochester, N.Y.-based Harris Interactive confirms ICOM's survey, with a recent study reporting that 63 percent of adults will not make a purchase if a discount of some kind is not available. In addition, Harris Interactive reported that 56 percent of adults will look online for coupons and other discounts.

Both reports seem to indicate that retailers and small business owners would do well to offer coupons and discounts to consumers during this time, particularly making Internet and other electronic means of receiving discounts more readily available.