Shortages and inflation spur new coupon mix

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If you’ve ever watched an episode of the reality TV show “Extreme Couponing,” you know that coupon clipping is serious business for price-conscious consumers and the brands that give them the discounts they demand.

Largely due to the fears instilled in millions of people during the early days of the pandemic, the coupon industry is undergoing a digital shift, but it is also retaining a paper attachment when advantageous.

Looking back to 2020, Bill Beyea, Senior Director of Consulting Services at Inmar Intelligence, said: “For the first time in many people’s lives, they were facing stockouts. It was something new. »

Suddenly, people who wouldn’t normally hesitate to walk out of the store with a packet of toilet paper were looking to stock up. As the pandemic enters its third year, Beyea noted that we’re still seeing random product shortages — of cream cheese during last year’s holiday, for example — as the global supply chain struggles to regain its pre-pandemic position.

Add an inflationary environment to the mix, and it’s easy to see why couponing gains a bit more cachet.

“It creates a situation where customers say, ‘If I get an offer that asks me to buy more of these products, I might want to stockpile some while I can and buy a little more than I normally would, because it might not be there tomorrow,” Beyea said. “If you give me the right coupon, I’ll buy more right now while I can and save money.”

But even as they benefit from an uptick in business, brands find themselves at a crossroads where they must decide what to discount — and how best to incorporate those discounts into their coupon mix.

Saying it’s reckless at best to offer discounts on rare items, he said: “What happens if you don’t? Buyers who can’t find your product may buy something else, or it becomes too expensive, and they opt for a cheaper alternative. What will happen is some brands [will] have to temporarily stop the promotion because of these issues.

Fortunately, digital and paper coupons are proving to be a valuable combination in addressing some of these challenges by helping brands put discounts where they matter most – right now. Plus, more of them are using data to crack the code on how coupons can help them reach their goals to move product as planned.

While non-digital coupons are still an important part of the mix, Beyea said they have limitations in terms of the data they provide to brands and retailers about shoppers — they cast a wide, albeit imprecise, net. .

Digital loading coupons, on the other hand, can provide data at almost any stage of the customer journey. They appear on the retailer’s website and mobile app, and when customers decide to use them, they are logged into the point-of-sale system and associated with their loyalty accounts.

This is where digital couponing is heading, followed by a paper receipt.

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Various forms of targeting

While Sunday papers and free-standing coupon inserts (FSIs) and many other traditional paper methods are still in use, they do not link usage data to the individual shopper, Beyea told PYMNTS.

“Why that’s important is for brands that want to target and be able to do things like…be able to see that I’ve reached a certain type of person, or I want to deliver things to a certain type nobody,” he said. noted.

Conversely, digital couponing is a “mostly positive” development for consumer packaged goods (CPG) brands, as it gives them a new way to engage with digitally savvy shoppers. It also provides the ability to leverage shopper data for retailers where they run promotions – for example, to find shoppers who have never purchased their product, but are buying others in the same category.

“Let’s just say you’re a soft drink brand and want to buy from people who only buy other soft drink brands and not yours, or people who used to buy from you but didn’t in the course of for the past six months,” Beyea said. “The data can be extracted, examined and these buyers can be identified. They can’t see you or me, but they can see this group.

Crafting a discount or promotion with this kind of specific purpose and corresponding data is turning the old coupon clipping craze into a digital spend management trend.

“People who redeem are going to be your target audience,” he said. “It was a lot harder to do something like that historically. Traditional coupons need to be processed.

And while digital is easier or requires less manual effort than traditional promotions, Beyea explained that couponing shouldn’t be completely frictionless: you don’t necessarily want to just offer discounts automatically and lose an opportunity to boost brand awareness.

“With the traditional coupon, you had to go get it somewhere and cut it out of something or peel it off of something, take it with you to the store or find it in the store,” he explained. “Now you have to find it [online] and click on it. I think most brands generally want someone to take action.

It’s data by any other name, and it’s crucial to designing the next promotion.

Read more: Inmar Intelligence Launches DeductionsLink AI-Based Platform

Create promotions for shopper “phases”

Recalling how, at a previous job, his purchase of morning coffee at a nearby grocery store invariably spit out an offer to subscribe to the Wall Street Journal, Beyea said, “They would look and say somebody coming here at 8 morning hours and buying a few things, they’re probably on their way to work, that’s a business type individual who might want The Wall Street Journal.

This uses more digital information than many basic paper coupons, but the industry can do better.

“These types of offers are interesting because there’s a targeting capability there,” Beyea said. “But then that coupon is given to you at the point of sale. It’s a repeating thing, come back and get this on your next trip, as opposed to a coupon someone can find while they’re planning or in the store.”

The digital transformation of the grocery store creates unique promotional challenges for brands where the in-store phase is essential. Since many shoppers now make some or all of their grocery purchases online and then have them delivered or picked up curbside, there is one specific type of purchase that these shoppers make less often: c is the impulse buy, the item you saw while browsing the store and threw in your shopping cart.

Many brands engage in on-shelf promotions to stimulate these impulse buys, and online shoppers are going to miss out on these attention-grabbing promotional tactics.

“You don’t necessarily see the box of Twinkies, or beef jerky or whatever, all the candy bars and the impulsive stuff at the checkout” when shopping online, he said. “Brands are facing new challenges in some cases where they have to get creative and think of other ways to promote.”

When it comes to couponing benefits, however, Beyea said in-demand demographics are emerging as the new extreme coupon crowd.

“Millennials have the highest numbers for paper and digital coupons,” he said. “We saw 82% of Millennials say they used a digital voucher at least once and on recent trips, and 72% said they used a paper voucher, while Gen Z was 74% digital and 60% paper.”

Related: Digital Coupon Redemption Finally Surpasses Printing

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