Jill Cataldo is a coupon master.
She had two children in her diaper and when money was tight, she started cutting them out here to save $ 1 and 50 cents in the Great Recession. Starting with a training session at her suburban library in Chicago, she shared her lessons with others and now has a syndicate column and website on how to reduce coupon trading and other spending. I am writing.
However, the pandemic overturned Mr. Cataldo’s world. The Sunday newspaper paper coupon inserts seemed thinner. Even the increasingly popular digital coupons were hard to come by.
“Some of the brands I’ve been following for over 10 years don’t currently issue many coupons,” Cataldo said. “It’s a little frustrating because it’s something we’ve been relying on for a long time.”
Today, the sharpest rise in living costs in 40 years is even more coveted for bargains. “Inflation should raise this significantly as a tool to assist our customers,” he said. Sanjay Dhar, a marketing professor at the University of Chicago Booth Business School.
But getting that tool is getting harder and harder. In 2021, Kantar Media estimates that 168 billion were distributed in both print and digital formats. This is down from about 294 billion in 2015.
The shrinking coupon market includes not only the number of coupons distributed, but also the shares submitted at checkout. According to the report, the redemption rate dropped from about 3.5% in the early 1980s to 0.5% for all print and digital coupons in 2020. paper By Harvard University, Georgetown University, Heinrich Heine University Dusseldorf Economist.
Economists are aware of a larger phenomenon. Time-consuming consumers don’t want to spend a small amount of effort to save a few dollars on toothpaste.
“Reduced use of coupons and lower redemption rates represent a fundamental shift in consumer shopping behavior,” the author writes. “We see this as additional evidence that price sensitivity declines reflect long-term, long-term trends,” they added.
At the same time, mobile phones have enabled all kinds of other incentives, including cashback rewards, points that can be redeemed for store credits and contest prizes.
Eric Andersen, a marketing professor at Northwestern University’s Kellogg School of Management, said: “It’s not clear if traditional coupons will do this.”
The explanation gives little comfort to people like Cataldo’s readers who have become dependent on coupons to keep food costs down.
“I don’t think they’re like” oh, we don’t care “from the consumer’s point of view. We care, “said Cataldo. “Currently, there are only fewer tools for playing games.”
Venerable incentives
The coupon industry we know began in the early 1970s when Michigan printing company Valassis Communications began distributing discount booklets for certain products available in any store.
Valassis totaled the pieces of paper and the manufacturer refunded the discount to the retailer. Soon, grocery stores saw the value of coupons in driving traffic to their own stores and began inserting their own newspapers. According to Inmar Intelligence, another major coupon payment company alongside Valassis, the number of printed coupons distributed peaked at 340 billion in 1999 as the circulation of newspapers increased.
However, the decline in the redemption rate had already begun. It’s hard to figure out why, but people close to the industry believe that as more women join the workforce, it’s related to the rise of two-income households. I remember Cataldo growing up in the 1980s. She said her mother was enthusiastic about using the coupon.
“At that time, it was a little different culture because there were so many housework parents who had time to do this,” she said. “It’s time to work, but you need to have that time, and if you work eight hours a day, you probably don’t.”
Coupon use revived during the 2007-2009 recession, leaving millions of people unemployed with much less financial support, much longer than they would receive during the pandemic recession 10 years later. rice field. “Couponing” has become a widely used verb thanks to the reality show “Extreme Couponing”. This puts people into practice, promising stackable discounts that can bring shopping cart purchases closer to zero.
But what pleased serious coupon providers is that they focus on getting people to buy things that can’t be purchased otherwise, and not giving discounts to people who buy the product anyway. Disappointed the manufacturer. As a result, brands have withdrawn their promotions and have begun to limit the number of coupons that can be used on certain trips.
At the same time, grocery stores and large stores were under pressure from e-commerce platforms like Amazon. They responded by strengthening store brand offerings and asking companies such as Procter & Gamble to lower prices for well-known brands.
“They are competitive on the shelves because they want to make the best deal,” said Aimee Englert, who directs the client strategy of Valassis’s consumer packaging commodities company, which is now part of a company called Vericast. .. “After all, it limits the budget that manufacturers need to pull the lever, such as offering coupons.”
As the room for discounts diminished, brands wanted to make sure they were narrowing down as many additional purchases as possible from promotional costs. The average value of coupons has shrunk as well as the amount of time they can be used. And the rise of smartphones has provided an opportunity that seems to be much better than covering the neighborhood with newspaper. Offers can be personalized and targeted to specific demographic profiles. Coupons can be linked to supermarket loyalty cards. This provides retailers with data on whether coupons have prompted shoppers to switch brands.
Greg Parks is another coupon blogger who started in the wake of the Great Recession and is trying to increase his income to feed his three children. He started with newspaper clippings across the floor, but now he uses only digital coupons to create educational videos. Digital coupons can be used nationwide, not in a single distribution area.
“I want to say I’m a lazy coupon provider right now,” Parks said. In addition, he noticed that digital coupons reduce the dirty look from the cashier when a stack of paper has to be processed.
“Some of them behave as if we were stealing or taking something from them,” Parks said. “They don’t want to deal with all those paper coupons, they’re such a headache. In digital, everything comes off automatically.” (Only 5% of the coupons distributed are digital, According to Inmar, they represent about one-third of all redeemed coupons.)
However, Parks is proud of the sophistication of coupon users. Many people who were most dependent on print coupons (senior shoppers with fixed income) may not have the computer or smartphone literacy to adopt the digital version. Dr. Dahl of the University of Chicago said the switch to digital affected false demographics.
“It’s not the people who use coupons. They don’t use digital media much,” said Dr. Dahl, who remembers surviving with coupons 30 years ago as a graduate student in Los Angeles. “Most of this isn’t caused by a reaction to the coupon. This is because the coupon doesn’t reach the right people.”
Indeed, manufacturers have not abandoned the pure range of physical coupons. Self-contained inserts still serve as advertising media. In fact, the ideal result for a manufacturer is for shoppers to see a coupon and go to the store to buy the item without redeeming it.
Sudden shake-up
If the coupon died slowly for years, the pandemic hit hard.
At first glance, the supply chain turmoil and the key points from the office to the home made it desperate to buy whatever consumers could get. The brand’s taste went out of the window. When inflation began to skyrocket last year, retailers not only struggled to keep their shelves in stock, but weren’t even sure they could maintain stable prices until the coupons expired.
Spencer Baird, Interim Chief Executive Officer of Immer, said: “This is what we’re hearing very consistently.” We’re budgeted and ready, but we don’t want to ruin our supply chain until we get the filling factor where we need it. “”
Even the use of digital coupons sank for the first time in 2020 before rebounding. Most of them are tied to a particular retailer, but the coupon industry is working on a universal standard that allows shoppers to redeem digital coupons at signed-up retailers.
However, there is no guarantee that retailers will stick to coupons when other incentives are gaining popularity.
Lisa Thompson used to Coupons.comIt started in 1998 as a website where you can print coupons instead of cutting them out. The company is phased out printable coupons, Coupons.com The app already offers cashback promotions in most cases instead.
“Honestly, it’s a dying form of savings, and we know it,” Thompson said. “Much of my work has worked with marketing teams to make” coupons “sound sexy. “
Many dedicated coupon providers still prefer the old-fashioned method.
“I agree, it’s down, and at some point it will die,” Cataldo said. “I’m not looking forward to it, but it’s not happening as fast as they thought.”
