Silver Lining for Coupons Expected during the Pandemic
By Jack Grant
COVID-19 has staggered the economy and led to tight household budgets and a greater consumer desire for savings. Such a change in consumer attitudes and behavior is typical during recessionary times.
Coupon experts look to the recession of 2008 for clues to their fortunes during the coronavirus pandemic as well as for lessons learned to apply today.
Both coupon distribution and redemption were growing during the 2008 recessionary time period, according to Maggie Giancola, VP, CPG Sales & Strategy, Valassis. That growth continued all the way to 2011 and beyond in comparison to prior times.
“That tells us that then, just as now, consumers are hungry for savings. They need savings to make ends meet and to bring normalcy and feel connected with their brands and categories. That behavior fundamentally changed once they started doing it, they continued doing it,” said Giancola, speaking as part of a virtual roundtable discussion called Rethinking Shopper Engagement During the COVID-19 Crisis, sponsored by the Path to Purchase Institute.
When analyzing the 2008 recession and its aftermath, Quotient Technology also identified a change in consumer behavior with increased desire for savings. This could have been due to general economic uncertainty coupled with the desire to stretch tight budgets as much as possible, according to Steven Boal, CEO and Chairman of Quotient Technology.
“In 2009, consumers used 70 percent more digital coupons than they did in 2008. This trend continued, even throughout the following bull market with consumers using 3.8 times more coupons in 2019 than in 2008,” he said.
As a result of current events, he added, Quotient anticipates a similar trend in shoppers’ need for increased value. The difference now is that coupon redemption has gone digital, and shopper expectations – particularly with regards to personalization – have grown.
Ron Fischer, President of Redemption Processing Representatives (RPR), agrees that coupon redemption will increase. However, the greater increase will be with digital.
With the spike in demand for coupons in 2008 came heightened expectations for a simple, accessible redemption experience, Boal explained. Shoppers wanted to be able to find and redeem coupons quickly and easily online.
“In the 12 years since, the expectation for a clean digital experience has become a requirement,” he said. “With increased delivery and curbside pickup options, marketing teams need to take every step to pave the way for easy discovery and subsequent redemption – whether that be through loyalty-linked coupons, the opportunity to shop at any retailer, shopping list integration, personalization and more. Luckily, the time since 2008 has also seen meaningful breakthroughs in the kind of data and analytics available to brands and retailers. They now have the information they need to provide a better, more personalized and therefore more valuable savings experiences to shoppers.”
Meanwhile, FSIs are a real challenge due to the planning requirements and COVID-19, according to Fischer of RPR. The predictions of a second wave will force brands to use other media.
During the Path to Purchase virtual roundtable, Giancola of Valassis explained that consumers are motivated to buy and that can build a holistic understanding of how to execute coupon programs with current risks in play. She talked about publishing FSIs – potentially not in a full circulation that a brand might have historically done but in top opportunity markets where excess inventory might be a factor. And then from that, funneling through trigger-based marketing in digital efforts.
“So amplifying the fact that you have an FSI in market, but in those top opportunity areas, areas that might have excel inventory which we know from our real-time inventory data, and using digital to hone in on consumers and push that message out in real time that our product is available. Go buy it and use these offers to make ends meet,” she said.
The current pandemic poses an additional challenge for FSIs, according to Boal of Quotient. Due to COVID-19, the handling and exchange of paper is inadvisable due to the potential spread of the contagion.
“Therefore, coupons should be integrated into this digital, contactless checkout experience,” he urged. “Digital coupons offer additional value to retailers and brands who can target specific audiences to meet their varying objectives. Shoppers, in turn, receive relevant offers that will benefit them in the short term and strengthen their relationship with brands and retailers in the long term,” he summed up.