Consumers are increasingly cutting coupons to save money in the struggling economy, with redemption up ten percent in the last quarter of 2008 compared to the previous year, according to Inmar CMS Promotion Services.
The Coca-Cola Company was the first company to issue promotional coupons back in 1887, and since then, many manufacturers and retailers have seen coupons as a useful marketing tool, offering cost savings through inclusion in magazines, newspapers and via the internet.
Inmar, which acts as a middleman in promotional transactions, including dealing with coupons, said the leap in coupon redemption was the first increase since the early 90s, with Americans redeeming 2.6 billion coupons in 2008. However, this was still a long way off the peak year for coupon volume, which was at the end of the last major recession in 1992, when 7.9 billion coupons were redeemed.
Inmar’s president Bob Carter said: “Consumers responded to the financial uncertainty, in part, by using more coupons. When everyone started hearing reports of record unemployment, drops in consumer confidence and losses on Wall Street, consumer redemption volume started to go up.”
And marketers have confidence in the power of coupons, making 317 billion of them available to consumers last year – not only a five percent increase on 2007, but bringing volume back up to levels from a decade ago.
Carter said: “This high level of distribution, combined with a nine percent increase in the average face value and a generally sour economy, make coupon offers more attractive to consumers than ever. The question is whether or not consumers will continue to think so in the coming year.”
Many market researchers are predicting that the financial crisis will be a major driver behind consumer trends in the year ahead, including a move toward good value, quality foods for preparing at home as consumers eat out less, and seeking out ingredients for added health benefits in an effort to avoid the costs associated with becoming ill.
However, according to a Nielsen survey conducted last year, coupons are consumers’ top strategy for saving money, with 22 percent of respondents saying they plan to use them to cut grocery bills.
So far, this seems to be precisely what consumers are doing, as Inmar said that the trend for coupon cutting has continued into the new year, with nine percent more coupons redeemed in January 2009 than in January 2008.
Meanwhile, market researcher Packaged Facts has also been looking into the trend with a report released in December entitled “Market Trend: The Couponing Consumer in a Down Economy”. It showed that while marketers have long hoped that coupons would help drive the launch of a new product, the majority of consumers use them to save money. It cited a Simmons survey in which 58 percent of respondents said they used coupons as a way to cut bills, compared to just 22 percent using them to try a new product.