Coupons are back - thanks to recession
Published: Thursday, January 7, 2010 at 6:01 a.m.
Last Modified: Wednesday, January 6, 2010 at 3:16 p.m.
The coupon is back, thanks to the recession.
After almost two decades of decline, 2009 is on track to mark the first year that coupon use has increased in the U.S. since 1992.
Coupon clipping for the millennium isn't just for detergent and cereal. Retailers of all stripes, from Walgreens to Neiman Marcus, have latched onto the coupon to entice consumers to spend. And the Internet and mobile devices are making coupons more widely available.
"Coupons are just more accessible to more consumers than ever before," said Todd Hale, senior vice president of consumer and shopper insights at Nielsen Co. "Without question, the economy has caused consumers to make pretty significant shifts in where they shop and how they buy and use promotions."
Retail sales last holiday were expected to be no better than 2008, which ranked as the worst season in four decades. The difference last year: Merchants were better prepared to protect profits and they reduced inventories going into November and December.
Sparse shelves mean retailers aren't forced to take the 60 percent and 70 percent markdowns that prevailed last year. That puts the onus on consumers to work harder to find a good deal, leading shoppers in droves to discover coupon sites.
Searches on Google for "printable coupons" and "online printable coupons" more than doubled this year, and Yahoo Inc. reported that "coupons" ranked first on its list of economy-related searches for 2009. Of consumers surveyed by the National Retail Federation, 42 percent said they plan to use a coupon for their holiday shopping.
At Coupons.com, one of the first and largest online coupon sites, consumers printed coupons worth $313 million in 2008. The site surpassed the 2008 annual figure in June 2009 and expects a total of $1 billion in printed coupon savings by the end of the year.
Dozens of Web sites and blogs have cropped up dedicated to tracking retail and manufacturer coupons, gathering coupon codes for online deals and hosting forums in which shoppers share coupons and analyze the best and worst deals. Deal sites that once relied on members to share coupon finds with each other now have relationships with retailers eager to reach recession-weary consumers.
"It's a great channel for retailers to boost sales, especially as more shoppers move online," said Brian Nickerson, director of shopping for Internet Brands Inc., which operates Bargainist.com.
Asa Candler issued the first known coupon in 1894 when he gave away vouchers for a free Coca-Cola at his new drugstore. The following year, Post Cereal issued a coupon for a penny off a box of Grape Nuts. Coupons went on to gain widespread popularity as Americans scrimped during the Great Depression, and coupons reached their heyday in the advertising boom of the 1950s and '60s.
Coupon use peaked in 1992 with 7.9 billion coupons redeemed, according to Inmar, a coupon processing firm. The practice has declined steadily since to 2.6 billion coupons redeemed in 2006, where it remained until late last year.
As housing prices fell and unemployment rose, consumers searched for ways to save and rediscovered coupons. Redemptions jumped 10 percent in the fourth quarter of 2008 and kept rising: 17 percent in the first quarter, 33 percent in the second quarter and 29 percent in the third, according to Inmar.
When 2009 ends, the firm projects coupon redemptions will have gained 20 percent to 3.2 billion and remain strong even as the nation emerges from the recession.
Today, newspaper circulars still dominate, accounting for about 90 percent of the coupons distributed and more than half of those redeemed, but the Internet is rapidly making inroads.
Some stores, including J.C. Penney and Sam's Club, are testing mobile coupons, which allow shoppers to call up a coupon on their mobile phone for the sales clerk to scan.
While mobile coupons represent less than 1 percent of coupons distributed, the redemption rate is high. Shoppers may forget where they put a clipped coupon, but they almost always have their cell phones.
DealTaker.com President Kevin Strawbridge noted shoppers began favoring coupons over other deals earlier this year.
"What's interesting is usually the mix is 50-50 deals and coupons," he said. "This year it is 70 percent coupons and 30 percent deals. A lot more people are checking out coupons."
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