As rising retail prices force consumers to seek bargains, they are now more responsive to promotions than they were one year ago, according to market research conducted by GfK NOP for promotion solutions provider Valassis.
The research suggests that, with a faint-but-distinct echo of the post-war era in Britain, consumers are now seeking out as many incentives and promotions as possible to help in their battle against the rising cost of shopping for weekly necessities.
Active promotion hunters
The research found that 30% of consumers are more actively seeking out promotions than they were 12 months before. And, of this group, 75% cited a rise in the cost of food and the general cost of living as the main reasons for their being more promotionally responsive.
Some 17% went on to explain that they are more receptive to receiving coupons by mail, and that coupons offer a tried and tested way for consumers to reduce their regular grocery spending.
Money-saving focus
According to Charles D. Oyly, managing director for Valassis, "This research shows that consumers are more actively seeking money-saving promotions than they used to, and are welcoming coupons as a practical solution to the rise in shopping costs."
The US, which entered the current economic downturn before the UK, has reported an even greater rise in shopper demand for coupons. In recent research by ICOM, 67% of US consumers said they intended to use more coupons in light of the economic downturn.
Coupon usage increasing
Valassis in the UK reports that it has observed sharp increases in the issuing and usage of coupons in previous times of financial hardship. For example, during the last recession (in 1991) the company reported a 60% rise in coupon distribution and a 17% rise in the number of coupons actually redeemed by consumers (compared to the year before).
The company now predicts coupon growth levels of similar or higher proportions during 2008. The company also confirmed that a leading UK supermarket has recently observed a significant increase in the number of consumers entering its stores with shopping lists and calculators. Consumers are, quite literally it seems, counting the pennies and shopping with a renewed determination to reduce the overall cost involved.
Conclusion
According to Oyly, marketing budgets are suffering just as much as consumers, with marketing initiatives coming under greater pressure than before to produce quantifiable results: "In this new climate, brands must compete harder to win the sale and hold on to market share. But brand managers need to invest their promotional budgets wisely, constantly asking themselves whether or not they are running the right promotions to deliver the best return on investment."
While many believe that the UK is yet to feel the full impact of the so-called 'credit crunch' and growing inflationary pressures, coupons - like hard cash - are clearly becoming more important to consumers as they try to lower their everyday household costs.
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