UK consumers shifting to 'money-off' focus
The number of coupons redeemed by consumers in the United Kingdom grew substantially in 2012, increasing by 33% compared to 2011, according to figures from coupon and voucher services provider Valassis.
In the UK alone, some 448 million coupons were redeemed in 2012, up from 337 million in 2011. With an average face value of £1, the value of these coupons and vouchers was just under £1.6 billion.
In the past five years the number of coupons redeemed has grown by 104% - representing 229 extra million redeemed coupons and vouchers, with the majority of the growth occurring in the past two years.
Supermarket-issued coupons and vouchers have driven this growth, with 74% of coupons redeemed last year coming from grocery retailers, up from 68% in 2011. Redemptions of retailer coupons grew by a staggering 103 million or 45% in one year.
The data also showed that redemptions of coupons issued by manufacturers grew by 34% to 54 million in 2012. This is the first time manufacturer redemptions have increased significantly after several flat or low growth years.
Redemptions of newspaper subscription vouchers continued to decline in 2012, with a 58% reduction from their all-time high of 40 million in 2009, thus mirroring the decline in national newspaper circulation and general cost cutting in the sector.
"The increasing use of coupons as a promotional tool by marketers has created an insatiable consumer appetite across all demographics. The UK market, fuelled by grocery retail activity, appears to be 'taking off' in a way that happened in the US some years ago when every Sunday newspaper had a twenty page coupon booklet inside," said Charles D'Oyly, managing director for Valassis. "The rise and rise of coupon usage is remarkable for such a mature promotional tool - all the more so when spending on marketing is under pressure and gravitating toward digital channels. There is also little sign of this slowing down; based on our discussions with issuers it looks likely that this upward trend will continue throughout 2013."
So what is behind the upsurge in coupons' popularity? With consumers being ever-more willing to shop across grocery retailers to hunt for the best deals, supermarkets now need to compete much harder to win almost every shopping trip. Coupons have also become the lynchpin of many retailers' efforts to reassure consumers that they won't get better prices elsewhere, allowing retailers to focus their attention on other differentiation such as quality, service, and of course loyalty and reward offerings.