Forget The Past: Millennials And Males Are The Future Of Coupons

After three consecutive years of increasing use, the tide turned against coupons in 2012.

Marketers gave away billions of dollars in savings and special offers that year, but only a fraction of these incentives were redeemed. Research from NCH Marketing Services released this January found that U.S. consumers used 17.1 percent fewer coupons in 2012, even while the number of coupons issued remained the same as 2011.

Worse still is the treatment coupons are receiving in newspaper headlines. The Christian Science Monitor asked in April if coupons are worth the time and investment and Time Magazine went so far as to suggest avid coupon users are making the spending tools more difficult to use in May.

Despite the recent backlash, a new white paper has found that the future will be bright for coupons, provided marketers can capitalize on new technology and successfully court younger demographics.

Conducted by Zavers by Google as well as Shopper Sciences and released on July 18, the white paper assesses the current state of coupon use and reveals the driving factors that will keep the shopping tool relevant well into the future.

Move Over Mom: Coupon Use Among Men Is On The Rise

Perhaps the most notable finding of the report was that an increasing number of men are using coupons. The survey found that roughly 33 percent of men surveyed said that they had used a coupon during the fourth quarter of 2012.

Men were most likely to use coupons at grocery stores, fast food outlets and casual dining establishments. One in three also reported using a coupon at a drugstore, specialty retailer and department stores.

Dave Bona, the vice president of Partnership Marketing at Access Development, a private coupon network of 300,000 merchant locations and 150,000 mobile coupon providers, told PYMNTS.com he believes male coupon users are all about the “wow” factor. Bona cited the fact that men have historically enjoyed big-ticket savings, such as those on four-star hotels or a round of golf, but until recently often felt self-conscious about using coupons for smaller items.

“This also may be stating the obvious, but most men aren’t hauling around a ‘European carry-all’ to haul around coupons,” he said in an interview. “Having them stored on a mobile device isn’t just convenient, it has a technological coolness factor that eliminates the stigma of using coupons on small-ticket items.”

Women, however, are still a prime demographic for coupon use. The study found that they are more likely than men to use a coupon at big-box retailers, drug stores, specialty retailers and department stores.

Younger Consumers Hold The Key To The Future Of Coupons

The study also sought to determine how coupon use differed on a generational level, but the researchers paid particular attention to Millennials. Because they are expected to earn less than their parents due to economic conditions, the white paper predicted that Millennials are likely to embrace coupons. Still, the report noted that marketers must tailor coupons to cater to their needs.

While Millennials have largely embraced mobile and online shopping, many are still getting coupons the old-fashioned way.

The white paper found that 49 percent of Millennials aged 18-to 34-years-old reported to using a coupon they received in an email. Forty-eight percent said they had used a coupon while in-store and 48 percent said they had used a coupon they received in the mail.

The potential for this market is revealed in the number of Millennials who say they would be interested in retail apps that let them search for coupons, mobile websites that help them locate coupon offers and retailer-specific coupon apps.

The Ingredients For A Successful Coupon Program

The white paper didn’t stop at providing data: it identified three key areas retailers and manufacturers could address to design a winning couponing program.

First, the white paper suggested that businesses recognize the importance of what it called the “Zero Moment of Truth (ZMOT),” the online decision-making moment when the shopper is searching for information before visiting a physical store.

Secondly, the researchers advocated that coupon marketers should embrace real-time offers that allow them to capitalize on these moments. Using cloud-based programs that increased the timeliness and relevance of a coupon, the white paper suggested coupons could provide “the right offer to the right shopper at the right time.” Finally, the white paper recommended that businesses look to new technology to reward frequent shoppers with special benefits.

Bona agreed with the study’s findings, but suggested businesses need to go a step further when drafting coupon campaigns, producing goal-oriented redemptions that provide demonstrable return.

For more insights and analysis from Zavers by Google and Shopper Sciences, download the full white paper here.