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Σταύρος Κυριαζής
Dec 24th 2010, 10:00 by The Economist online | NEW YORK
MAN is that rare animal that makes bargains, Adam Smith once observed. This is especially true during a recession.
Americans redeemed 3.2 billion coupons last year, up 23% on the previous year, according to Valassis, a big coupon-services company. The distribution and use of promotional coupons has continued to climb through 2010, with the value of redemptions in the first three quarters up nearly 8% year-on-year to $2.8 billion. A big finish for the fourth quarter is a given: ‘tis the season for coupons.
A coupon renaissance is perhaps to be expected at a time when nearly eight in ten workers say they are living from one pay-cheque to the next and nearly 10% remain unemployed. But, surprisingly, it is the better-off who are making most use of them: in 2009 households with an income of at least $100,000 redeemed the most coupons, according to Nielsen, a market-research firm.
Market-watchers have concluded that there must be something to claims that the recent recession had a lasting effect on American consumers. There is said to be a new culture of frugality (some call it “austerity chic”), in which saving and bargain-hunting are in, and brand loyalty is out. According to a report by Booz & Company, a consultancy, more than three-quarters of consumers now say they read circulars and clip coupons before shopping. If this behaviour lingers as the economy continues to recover, as is expected, coupons will have consolidated their role as one of the strongest weapons in the marketing business’s armoury.
Online coupon firms like Groupon and its digital dealmaking ilk may be the media darlings of the moment, but so far the main beneficiaries of this consumer penny-pinching have been good old-fashioned paper coupons. Over 85% of them are distributed by being slipped into periodicals, especially Sunday newspapers, as loose inserts or booklets.
This has been a rare bit of good news for the newspaper business, which is doing its best to hang on to such a lucrative sideline. The Newspaper National Network (NNN), a consortium of 25 newspaper companies, recently published a study that finds that clip-out coupons printed on newspapers’ own pages (as opposed to loose ones that fall out when you turn the page) are the most effective at getting users to switch brands, trade up or try something new. “A lot of marketers are under-using the medium,” says Jason Klein, the head of the NNN.
Perhaps so. But the future of coupons is clearly digital. Though internet coupons still make up less than 2% of the market, they accounted for around 12% of redemptions in 2010, according to Booz & Company. Online aggregators of coupons are proliferating, and print-coupon providers have set up internet outlets. Digital users are more likely to be male, affluent and open to new products. Deals delivered either by smart-phone or on-site kiosks are especially effective: marketing that reaches a shopper just as he is reaching for his wallet is the most influential of all. Digital coupons make it easier to track spending patterns, especially when stores use an increasingly popular technique of letting shoppers download them on to their loyalty cards.
Newspapers will no doubt be nervous about seeing another vital source of commercial revenue disappearing online, as their classified ads did. But for coupon junkies, it is good news: the quantity and variety of promotional offers looks set to keep on growing.
