“I have read your column many times, and you seem to have the idea that coupon manufactures want as few coupons redeemed as possible.
I find that theory absurd. If a coupon manufacturer goes to the expense of printing millions of coupons and inserting them in hundreds of publications, I think the goal would be to have as much participation as possible.
If the goal is to not have them used, why use couponing as an advertising tool at all?
Just don’t print them and save the company millions of dollars. Your theory makes no financial sense.
Manufactures want as much product sold as possible. That is why they put coupons out: to be used!
By using coupons, we are not doing anything the manufacturer or store redeemed in doesn’t fully want us to participate in.”
I completely understand why many consumers don’t fully understand the complexity behind coupon campaigns, issues and redemptions.
I too didn’t truly comprehend how everything worked until I spent quite a few years working on both the industry side and the consumer side of couponing.
You are correct – brands do want coupons used. However, they do not want all of them used.
In fact, brands routinely print far more coupons than they expect or want redeemed by consumers.
Consider this: According to Inmar’s statistics for 2018, the rate of redemption for free-standing insert coupons is .29 percent. Yes – less than three-tenths of 1 percent!
More than 99 percent of coupons that are printed and distributed in the newspaper are never redeemed by consumers.
Clearly, if high redemption rates were the primary goal of coupons, brands would have stopped issuing them a long time ago.
So why do brands continue printing thousands of coupons that a statistical few will actually use?
Here’s something you may not know: When you see a wall of like products displayed on a store endcap or grouped together on a free-standing floor display, that product placement is often due to coupons!
When a brand issues coupons, they are able to secure featured placement for their products with the store.
Premium shelf space is extremely valuable to brands. It’s been a long-running practice for brands to negotiate for highly visible displays based on which coupons are dropping in the newspaper.
For example, a laundry detergent brand plans to issue a $2 coupon. The brand then negotiates for endcap space with retailers so that their brand of laundry detergent will be prominently displayed.
The store agrees to place the detergent on an endcap, as it is hoping that shoppers will be motivated to buy more of the product because there is a coupon in the newspaper.
As incredible as it may seem, the primary reason many coupons are issued is to secure shelf space, not to boost coupon redemption.
The product movement they enjoy when the product is placed in the store more than offsets the costs of printing and distributing coupons in the paper.
I’m reminded of a low-value coupon that appeared in the inserts just a few years ago: 10 cents off two spray cleaning products!
Ten cents? While I’m certainly a fan of coupons, when you see a brand offering a five-cent discount on a $3 item, it’s highly likely that the brand wasn’t looking to boost coupon redemptions at all. They were seeking better shelf display space in stores that week.
Once the brand secures better in-store display space (again, based on the fact that they issued a coupon – any coupon!) they’ll enjoy a sales boost from shoppers who see the product and buy it.
Statistically speaking, the brand will sell more product to non-coupon shoppers simply because it is right in front of them on display.
Shoppers like you and I, of course, will remember to bring our coupons, but other shoppers may see the coupon, forget to bring it to the store and buy the product anyway because they see it attractively displayed.
Isn’t coupon marketing fascinating?
Next week, I’ll tackle more reasons brands may not want an excess of coupons redeemed.