Digital Coupons Continue to be the Fastest Growing Method of Redemption Due to Shoppers' Increased Demand for Convenience

Inmar Intelligence | February 13, 2019

Digital Coupons Continue to be the Fastest Growing Method of Redemption  Due to Shoppers' Increased Demand for Convenience

Today, Inmar released insights from its annual Promotion Industry Analysis, including data that highlights how shoppers' preference for convenience and value continue to dominate the coupon industry as they look for ways to save at checkout. In 2018, digital Load-to-Card (L2C) coupons accounted for 1.6 percent of all coupons distributed, a 29 percent increase from 2017, and 15 percent of all coupons redeemed. This marks the fifth consecutive year of double-digit growth in L2C redemption resulting in a compound average growth rate of 34 percent.

While total coupon distribution and redemption declined by 11.7 percent and 15.8 percent respectively due primarily to decline in distribution and redemption of the free-standing insert (FSI), growth in L2C coupons demonstrates that shopper demand for convenience and digital experiences is driving a significant shift in the market.

Additionally, Inmar's 2019 Shopper Behavior Study shows that price promotion continues to be a meaningful tactic for marketers as 80 percent of shoppers reported that coupons changed their behavior in some way. Of that 80 percent, shoppers specifically reported that:

  • 37 percent bought sooner than they would have because of a coupon.
  • 35 percent bought a particular brand that they would not otherwise have purchased because of a coupon.
  • 35 percent bought more than they would have otherwise thanks to a coupon.
  • 24 percent bought an alternative product within the brand they planned to purchase because of a coupon.
  • 18 percent switched back to another brand that they had purchased previously because of a coupon.
  • 20 percent of shoppers said the coupon did not change by purchase in any way.

"The couponing industry is undergoing a transformational shift as marketers are revising their plans and adjusting their methods to address consumer demand for more targeted, personalized digital offers," said David Mounts, Chairman and CEO of Inmar. "Shoppers have made known their desire for personalized offers, and the latest data in our 2018 Promotion Industry Analysis shows that, as an industry, adoption of new technology to meet this demand is gaining traction and building in momentum."

Despite being time-strapped and over-committed, shoppers are carefully and consistently planning their shopping trips, especially before shopping for groceries. Enabled by the increasing availability of digital coupons and their ease of acquisition, shoppers are using paperless coupons to make their lists and decide what they're going to buy in-store, ultimately protecting their budgets. According to Inmar's 2019 Shopper Behavior Study, 82 percent claimed to have made a shopping list prior to going to the store, 35 percent claimed to look for digital coupons prior to going to the store and 43 percent claimed to look for paper coupons before going to the store.

The industry may be shifting faster than ever before toward the use of newer promotional technologies, but pre-shop methods still dominate when it comes to redemption, with approximately 32 percent of all redemptions coming from traditional FSIs.The 2018 Promotion Industry Analysis also found that 43 percent of shoppers look for paper coupons and 40 percent of shoppers look at the store circular prior to shopping in-store. This data demonstrates the need for marketers to integrate multiple methods into their promotional mix.

"Trends indicate that shopper interest in, and use of, innovative promotion methods will continue to increase, presenting opportunities for cost-effective strategies of engagement with active shoppers," said Mounts. "Brands' commitment to coupons remains strong, but they are leveraging newer digital technologies to engage more intelligently and reach targeted audiences, resulting in declining distribution of Print-at-Home coupons."

Distribution volume of Print-at-Home (PAH) declined 26 percent and redemption volume declined by 49.6 percent, signaling shoppers' continued disinterest in PAH coupons.

For more information and full report for purchase, find Inmar's annual Promotion Industry Analysis at Inmar Insights Marketplace in April 2019.