Rethink Coupons: Digital Is More Dynamic

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Retailers and manufacturers of consumer packaged goods issued more coupons than ever in 2013 (up 3.3% over 2012), according to a just-released annual coupon facts report. Considering the slow economic recovery and consumers’ growing addiction to deal shopping, you’d think redemption rates would have at least risen accordingly.

But redemption rates actually dropped in 2013. The study found an overall decline in coupon redemption volume of 3.4%. The average response rate for coupons was an underwhelming .092%.

There are a few reasons for the decline. First, coupon redemption is far more effective for established, sought-after brands. Yet the biggest increase in coupon distribution was for new products. The 2K14 Valassis Shopper Marketing Report notes just 3.4% of consumers require a coupon to try a new product.

Second, although coupons for food products outperform coupons for non-food products, the larger volume of coupons issued was for non-consumables.


Finally, there’s the issue of medium. Increasing popularity of digital coupons aside, only 1% of all coupons distributed in 2013 were digital. Compare that to the 10% redemption rate for digital coupons, and the opportunity is obvious.

So digital offers have broader appeal. They can also be highly targeted. But to accomplish your marketing goals — increased sales, trial of new products, brand recognition and loyalty — requires more than a digital coupon.

Parago’s shopper behavior study revealed that consumers love rebates. They’re also less expensive to fund than coupons or instant discounts. Rebates:

  • Offer the digital engagement and redemption consumers want;
  • Allow retailers to advertise products at the lowest net price;
  • Provide opportunities for highly targeted follow-up offers, increasing brand and/or store loyalty; and
  • Are highly cost-effective.

Take it a step further. Deliver dynamic-price rebates to your customer at the exact moment of purchase decision — while customers are in your store, searching for a better deal on their smartphones. You grab the sale and get the customer’s data, and you spent less to do it.

Rodney Mason is CMO of parago, a global thought leader and provider of incentives and engagement. Parago delivers over billions in rewards to millions of people each year for global brands. Mason has developed loyalty and engagement for the consumer goods, electronics, financial services, travel, restaurant, entertainment and technology sectors. He is one of the most followed CMOs on Twitter:

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