The way that consumers seek and redeem coupons has changed drastically over the last 10 years. Smart phone technology, tablets and social media are driving forces behind the digital couponing environment. That said, marketers are challenged to examine the current and future states of couponing in the context of the “”social community.” Industry insiders gathered to discuss the growing role of community in couponing at The Annual Industry Conference “Coupons: Opportunities & Options,” held April 12-14, 2011 in Atlanta, Georgia.
Retail TouchPoints had the chance to catch up with conference presenters, including keynote speaker Doug Rogers, a former Wyeth president. During his presentation, Rogers discussed how consumers’ instinctual need to be part of a community is driving success for online businesses including Groupon and Facebook.
Conference speaker Laird Garner, President of Garner Consulting, discussed “Emerging Technology” as it relates to couponing, including mobile commerce, social media, tablet technology and Cloud computing.
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Retail TouchPoints (RTP): What are some the overall trends that retailers should be mindful of with regard to coupon application and redemption?
Doug Rogers: Clearly, the most obvious answer to this question is the explosion of technology as a facilitating mechanism for how consumers look to save money. But we have to look deeper, beyond the superficial impact of technology, to see the current — and future — impact on individual and group purchasing behaviors. The explosion of “virtual communities” is merely a modern manifestation of what consumers have always done to save money: they connect and form groups to increase their individual sphere of influence. By banding together, consumers realize greater power and efficiency in their goal of saving money. Consumers have always done this (remember your Mom joining the S&H Green Stamp Club? Remember Coupon-Clipping Clubs?), the modern microchip just changes and improves how it’s done today.
But as retailers look to form and/or leverage these groups, they need to be mindful of the age-old group dynamics that shape and drive behavior. Consumers are looking for financial rewards in these groups first and foremost, but they also want to solve other group-dynamic needs too, such as the need to connect, feel valued and contribute.
Laird Garner: Personalization and digital transactions continue to increase significantly. Shoppers will increasingly expect more control over their advertising/promotions experience, along with the desire for greater simplicity. Retailers who successfully tap those expectations will gain long-term loyalty and engagement.
RTP: What are some of the nuances of human shopping behavior as they relate to the impact of social communities and potential opportunities for couponing?
Rogers: The short answer is that it’s easier to reach and target consumers — and more of them. But with expanding and more sophisticated consumer databases, we have the opportunity to customize the shopping experience to individual consumers; and that includes customizing pricing to individual consumers as well. As Bryan Gildenberg of Kantar Media recently said, this has the effect of “taking pricing out of the public domain.” By individualizing pricing through customized discount and coupon offerings, the pricing game becomes a bit more challenging for the Every Day Low Price (EDLP) discount retailers who rely on public “compare-and-save” tactics to drive their own retail brand differentiation. So in an ironic twist, as we are using technology to reach broader and more powerful groups of consumers, we are also using that same technology to advance the individualization of couponing and discounting. And as for the impact of social communities on shopping and couponing behavior, we have to recognize how consumers act as part of a “group” as opposed to purely individual behavior. We can’t underestimate the power of these “social animal” dynamics.
For example, joining a warehouse “club” like Costco is not just about saving money. It’s also about feeling connected and belonging to something that makes you feel smart. So you’re getting more out of the “club” than just a discount. Virtual clubs or communities established for the primary purpose of saving consumers money need to recognize this dynamic to be successful.
Garner: Pre-purchase research on the Internet has only accelerated with greater availability of Internet/print-at-home coupons. Load-to-card functionality also continues to grow by connecting offers digitally to existing retailer loyalty programs. Making these basic digital options easily accessible via mobile devices will drive promotions closer to the in-store shopping experience, while being much more targeted and relevant to individual consumers.
RTP: What are some of the new research components and figures coming out of this year’s conference? Any interesting or surprising findings that retailers should be plugged into?
Garner: Recent research from Leo Burnett and Arc Worldwide found that 50% of all U.S. consumers between 18 and 64 are using mobile devices to aid in their shopping decisions. This includes everything from comparing prices to visualizing use of the product, and it’s not just iPhone and Android users — this includes more basic, entry-level phones as well. Marketers must adapt rapidly to this mobile-digital media if they want to have a presence where the majority of their customers may already be making purchase decisions.
