Why Coupons Still Matter: How to Integrate Them Into a Successful Marketing Mix

3/17/2022 Megan OGorden

Despite some reporting, the death of the coupon has been greatly exaggerated. Yes, coupons have been facing some challenges in recent years. Coupon distribution decreased by 17% in the first half of 2022, for instance, and coupon redemption decreased by 19% in that same time period, according to a Capital One Shopping Research report. Only 0.47% of all coupons issued in 2022 were redeemed.

However, 2023 brought some better news for coupons: Coupon redemption increased 10.4% from 2022 to 2023, the first redemption increase since 2008. Consumers were also redeeming coupons at a slightly better pace in 2023, with an 0.85% redemption rate.

The enduring power of coupons

The following encouraging signs should provide brands with optimism about the enduring power of coupons — and why they should continue to include them in their marketing mix:

1. With financial concerns top of mind, consumers are actively seeking ways to save money. As a result, deals and coupons are more important than ever for three primary reasons:
• To help consumers buy the categories and brands they really want (with prices continuing to be high on some essentials)
• To win the customer loyalty tug-of-war at a time when people are highly likely to make choices based on product availability or price
• To contribute to the larger trend of self-care (saving money feels especially good right now)
2. Coupon redemption is up for digital and direct mail offers, suggesting that these are the areas in which consumers are most receptive to coupons. Why are these methods working so well as of late? It’s likely due to increased opportunities for personalization, both in terms of direct targeting of a person and in matching a product/category to a household or neighborhood. Brands can also leverage data from these offers as a highly effective optimization tool.
3. There’s good news, too, for discount/dollar store channels: While many classes of retail trade are showing low coupon usage, consumers are using them more in discount/dollar channels. This suggests that the more consumers look to save, the more important coupons will become.
4. One final note of optimism: Universal coupons are expected to make coupons even more secure for marketers while also making them more broadly useful for consumers.

Advice to brand owners

The fact is, coupons remain eminently viable if the brand is listening to consumers. Consider these four pieces of advice:

• Make sure your brand’s offers are truly compelling to consumers, and work to ensure that your deals match their direct needs and interests. People are overwhelmed with offers these days and are jaded in many ways. So don’t be the brand that calls everything a “doorbuster deal” when it’s really not. Instead, find ways to provide meaningful savings and earn the trust of your audience.
• When carefully crafting your brand’s omnichannel strategy, be sure to treat coupons as an equal among those other more “flashy” channels. Surround consumers with multiple touchpoints and don't assume they’ve seen your new product or special deal on another channel. Why not add “Check your Sunday newspaper” to a display ad? Hit them from all angles and it will pay off.
• Don’t overlook the fact that coupons and promotions have an inherent advertising value. Visibility is everything on a crowded marketing landscape, so utilizing coupons and deals as part of an effective omnichannel strategy can be just the ticket.
• Be sure your brand is doing everything it can to extend targeted offers to consumers. The opportunity and value of highly targeted offers can be immense, and the growth of redemption for both direct mail and digital shows that there’s clearly an appetite for it among consumers.

The right channel and the right moment

Marketers write coupons off at their own peril. Yes, long-term newspaper industry declines and supply-chain disruptions have tamped down coupon distribution and redemption in recent years. But there are legitimate reasons for optimism as noted above, starting with a deal-hungry populace.

The bottom line: Consumers are living in a radically different world than they were five or 10 years ago — or even two years ago. To assume coupons are no longer relevant to them is not only wrong, it misses the larger point: It’s on brands to continue to adapt, prioritize customer needs, and meet people where they are. The brands who deliver the right deals on the right channel at the right moment will enhance their ability to thrive.