Let’s be honest with ourselves – who doesn’t love a discount?!? Whether we’re shopping online or in person, being offered your prized item at less than the recommended retail price can often be the difference between a purchase and walking away. When we’re in-store, discounts are easily applied when the store assistant rings through our purchase; when we’re purchasing online…it’s a bit more complex.
Enter coupons: the modern day online merchandisers’ nirvana. They’re easy to produce, track, and more often than not, the resulting spike in sales far exceeds any discount applied. So for all intents and purposes, are coupons the future of online marketing?
Perhaps, but there’s more to it than you’d think…
Coupons make people happy
When Coca-Cola issued what is considered the first-ever coupon in 1887, little did they realise the phenomenal impact the concept would have on the marketing world, particularly demand generation marketing. Armed with a voucher, recipients could redeem a free glass of Coke at any dispensary. The strategy was a remarkable success – between 1894 and 1913, an estimated one-in-nine Americans enjoyed a free glass of Coke. It was the start of something big for Coke, which today is considered the world’s most effective marketer and the third most recognisable brand ever.
Why was the strategy so effective? Because brands understand that at the most basic level, coupons make people happy.
Coupon-happiness isn’t just hearsay, either; it’s proven by science. Back in 2012, Coupons.com wanted to prove the concept, so they commissioned a study, led by Dr. Zak, a neuroeconomist from Claremont University. Dr. Zak found that people who received a coupon experienced a 38% increase in oxytocin levels, and reported an 11% overall increase in their happiness. They also reported feeling more relaxed and less stressed. Who wouldn’t want customers making purchases in that kind of mood?
The effect of coupons on retailers’ bottom lines is also obvious. Last year alone, consumers redeemed in excess of 2.84 billion coupons, leading to a total saving of $USD 314 billion. It’s undeniable, then, that the coupon economy is alive, well…and growing.
Online consumer behaviour
Coupons have become an integral part of consumer purchasing habits, so much so that many customers not only want, but expect some kind of discount. And nowhere is this more prevalent than in the booming digital retail economy.
When online shopping, a whopping 64% of all consumers wait to buy things until they go on sale. And if things aren’t on sale, customers go searching for a coupon anyway – 59% admit to searching for promo codes prior to making any kind of purchase, and 30% sign up for a price-tracking service so they can be notified when the price drops for an item they’re looking at. Coupons or discounts are also the number one factor that encourages impulse buying. If you join the dots, it’s clear that purchases made with coupons may soon eclipse those made without.
Coupons are also integral in what’s called the abandonment economy – basically, the fact that consumers abandon in excess of $4 trillion dollars of merchandise in their online shopping carts annually. If applied at checkout, coupons have the potential to reduce cart abandonment significantly – statistics show that 54% of all shoppers would purchase products left in their shopping carts, if those products are offered at a lower price than the original. Coupons, then, could potentially decrease cart abandonment by $USD 2.16 billion – no small result, indeed.
Coupons and the elusive ROI
Besides the obvious (and not to be underestimated) boost on sales that coupons can have, they also remain a merchandiser’s dream for another reason – that of establishing ROI.
Although the advent of Google Analytics and other tracking tools in digital marketing has made it easier to track ROI on certain campaigns or ad sets, the reality is that most online retailers have neither the capability, nor time, to invest in truly understanding how to use these tools (and oftentimes, pay for them). Most retailers are just not as digitally savvy as they could be, after all, 91% of small to medium business websites are not yet fully mobile optimised.
Enter the coupon: the ultimate tracking tool. All retailers need to do is associate different coupon codes with different campaigns, and voila – they’re able to understand in detail the effectiveness of different online marketing messages and platforms.
But there’s an ugly side…
There’s no doubt that consumers want coupons, and that they are one of the most effective marketing tools for online retailers. But is coupon success as simple as creating a code and then seeing sales flow in?
For the average retailer, the answer is a resounding no, for a number of reasons.
The mobile revolution
Before we get to the reasons: some context. Today’s consumers are increasingly shopping on their smartphones. In fact, we now browse and shop more on our mobiles more than our desktops, spending an incredible 2.8 hours a day on them.
Our app habits
Our mobile shopping experience, however, is not simply visiting multiple sites via our browsers – there’s a specific journey we’re taking to visit retailers, and it’s more often than not via apps. For most of us, the beginning of our buying journey is social media apps, for example Facebook, Instagram or Pinterest, however, shopping aggregator apps are also hugely popular: research shows that we areincreasingly visiting them prior to making a purchase.
For retailers, this poses a particular problem. If they advertise a coupon we can’t resist, we’ll jump straight onto their site through the app we’re using. But by the time we get to checkout with our items, will we remember the coupon code? In most cases, we most definitely will not.
Search for coupons = missed opportunities
If you’d been attracted to a product or site based on a coupon, and you couldn’t remember it, the next step would be to search for it, right?
And that’s exactly what research shows that we do – and often, to the retailer’s peril.
Consumer behaviour research from Kissmetrics shows that the very existence of a coupon code box is enough to trigger consumers to go searching for a code, regardless of whether they came to the site via an advertised one or not. This often leads the consumer away from the retailer’s site, and into Google to try and retrieve a code.
On a desktop, this could be easy, albeit distracting. You simply open up another tab and look for your code. But on a mobile, it’s nigh on impossible. You’d need to navigate out of your app, open your browser and start searching. More often than not, you’d simply get distracted and not purchase your item. Remember, coupons are great at encouraging impulse purchases, and by the time you’ve trawled Google for a discount code, well, your impulse may well be over.
New and improved solutions
To ease retailers’ pain in this respect, Kissmetrics suggests a number of questionable tactics, for example, camouflaging the coupon code box so only those that are really committed will try and find the code, or simply hiding it from those that don’t have it in the first place. Implementing these options may be technically difficult, however, and unlikely to produce the results retailers want – in the end, you create a coupon so customers can use it.
There’s a far better option available, though, and that’s autofill.
Autofill, and in particular, intelligent autofill, has the potential to create the type of frictionless shopping experience that would make coupons as effective as retailers need and want them to be.
By using autofill-as-a-service via an app such as a social media site or shopping aggregators, retailers would be able to advertise a coupon code and voila – that coupon would automatically be applied at checkout. Remember those 59% of customers that searched for a coupon prior to making a purchase? With autofill, they’d no longer have to – it would be right there for them, applied, ready and waiting to take advantage of their desire to purchase their item at a discounted rate.
So what does the future hold for coupons?
When Coca-Cola released their first coupon over a century ago, they’d have never imagined the phenomenon that it would become. But in the digital era, if we want the same results that Coke achieved, we’re going to need a little technical help. And autofill may be the help we need.
Fillr has built the world’s most intelligent and accurate autofill that will seamlessly integrate into your app. Contact us today to find out how our technology can help your customers to transact faster and more effectively, boosting your conversions and revenue.