|
Marketers using printable coupons and vouchers solely for discounting may be missing a profitable opportunity to grow their market share during the recession, according to Oliver Felstead, European general manager for online coupon provider Couponstar.
The ongoing shift in consumer spending behaviour is perhaps the most marked the retail industry has seen for many years, with liberal spending having almost completely ceased and frugality being a top priority for many.
Indeed, Felstead argues, even the most timid consumer no longer finds it embarrassing to haggle for purchases, buy cheaper brands, or use coupons at the checkout to get better value for their money.
But, while many retailers have been hit hard, there is still a way of using the value-conscious trend to their advantage - mainly through the use of smarter promotions. A number of grocery giants have already proved the technique's effectiveness. For example, Morrisons in the UK reported record sales over Christmas 2008, helped by creative promotions such as a three-week 20-off voucher offer for any customer spending more than 40 in its stores.
Entrenched consumer habits that have built up over time are now being challenged. They are are switching supermarkets more readily, and using different criteria to drive their choice of purchase. So, for brands and retailers fighting for diminishing consumer spending, there is a new opportunity to challenge consumer loyalty with cleverly targeted promotions.
It is perhaps no coincidence, according to Felstead, that sales promotions are generally bucking the trend of marketing cutbacks. In fact, sales promotions fared better than nearly all other areas of marketing and advertising in 2008, according to the latest Bellwether Report which observed a move away from advertising, with marketers instead moving toward discounting and other price-based incentives such as coupons and vouchers. Interestingly, online marketing also defied the cutback trend, mainly due to the higher levels of accountability and measurability associated with online media.
Online printable coupons and vouchers (i.e. those that appear on the web, and can then be printed out to be redeemed later in-store) have also seen a surge in popularity over the past two or three years. From the marketer's perspective, Felstead suggests, this is a genuine opportunity. These coupons allow for a quick time to market (e.g. a campaign can often be executed within two weeks, compared to months for direct mail), and they can be applied creatively as part of an integrated campaign, both to help convert awareness and interest to consumer purchases, or to measure a campaign's effectiveness. Moreover, because consumers are able to choose which coupons they print out, the redemption rates are typically far higher and more clearly targeted than those of traditional mass-printed coupons.
"Marketers who use coupons and vouchers simply to extend their sales are missing a trick," warned Felstead. "Consumers now have 'sales fatigue' because every store is having a sale of some kind - it has become the norm. Not only is this unsustainable from a profit perspective but protracted discounting also risks damaging the brand."
For the retailer, online printable coupons can provide one way of getting carefully segmented new customers into the store without having to offer widespread discounts. And for FMCG brands, they provide a way of offering an incentive or discount without compromising their brand value or long-term market positioning.
"Once a 'nice to have' element of a marketing campaign, marketers are now realising online printable coupons' strategic value as part of a well planned campaign, particularly as they strive to demonstrate a return on investment for their promotional spending," concluded Felstead. "The key to sustained success is to think laterally, and apply coupons and vouchers creatively. While price sensitivity during a recession is inevitable, marketers must be mindful of the fact that the economy, however dire now, is cyclical and will eventually recover. Those who favour discounting now may find they have devalued their brand irreparably."
|
