Article

Online coupon sites offer increasing opportunities for retailers

Two out of three consumers have reported downloading and printing coupons from the Internet.

March 29, 2011

Coupons have always played an integral role in the marketing and advertising strategies of many retailers, the traditional distribution channels are being superseded by online coupon websites and delivery. As newspaper and periodical circulation continues to decline throughout the United States, online coupons will be become more and more relevant.

According to the recent Morpace Omnibus, 94 percent of consumers today are aware coupons can be downloaded and printed from the Internet. Of individuals over the age of 55, 97 percent reported online coupon awareness, which is a significantly higher percentage than individuals under the age of 55. Additionally, with an incidence of 96 percent, Caucasian consumers report significantly higher coupon awareness than other ethnic groups.

While online coupon awareness is extremely high, two-in-three consumers have also reported downloading and printing coupons from the Internet. This incidence is significantly higher for females (72 percent) as opposed to males (59 percent). Also, consumers with annual household incomes over $50,000 annually report significantly higher online coupon usage than consumers with incomes under $50,000 annually (71 percent vs. 61 percent, respectively).

While consumer online coupon usage incidence is currently strong, one third of the marketplace is aware of the availability of online coupons but do not download or print them. Thirty-five percent of these consumers reported that the coupons online were not appropriate for their needs. Slightly more than 20 percent of consumers reported that searching and downloading coupons was not worth the time it requires. The third highest incidence for the reason consumers don’t use online coupons was that 19 percent simply don’t use any type of coupon, regardless of the distribution channel. Only 7 percent of consumers rated privacy as the main reason for not downloading coupons online.

In terms of the awareness of coupon distribution websites, three websites stand out from the rest of their competitors. Nearly half of consumers are aware of the website Coupons.com (47 percent). Groupon.com awareness levels were second at 33 percent, followed by 26 percent of consumers who are aware of Valpak.com. These three websites have awareness levels of at least double their nearest competitors. While consumers over the age of 55 were significantly more aware that coupons could be downloaded online, they are significantly less aware of most coupon website than their younger counterparts.

Consumers were also asked which site they would prefer to download and print coupons from if they were searching the Internet. While Coupons.com remained the most frequently mentioned website (38 percent), Groupon.com came in third, trailing Google.com by nearly 12 percentage points (34 percent vs. 22 percent respectively). Google was rated as the number 1 preferred coupon site among males (41 percent), younger consumers aged 18-34 (43 percent), and wealthier individuals (38 percent).

Conclusion

The research brought to light by the Morpace Omnibus points to several areas of improvement for both coupon vendors and retailers as they gain experience with online coupon distribution:

• As in most other areas of the modern world, brand equity is crucial. Coupons.com is highly recognized and used because of the website name: it is easy to remember, easy to enter, and easy to recommend to others. The URL name will always assure coupons.com a strong position in the online coupon business. Google.com, on the other hand, is known for the expertise, innovation, and usability it has provided to millions of consumers on the Internet. Consumer perception of Google.com is so positive that people have come to expect Google.com to enter into online coupon distribution, and will use the website if and when they do so. Any retailer distributing coupons on these websites will have access to a wide population.
• Slightly over one-in-three consumers stated the main reason they don’t use online coupon website is the coupons online were not appropriate for their needs. This suggests many consumers are not properly educated in regards to online coupon websites or have preconceptions upon coupon websites that are not realistic. If a website like Google or Groupon could better explain the benefits and variety of online coupons, they would have the ability to attract hundreds of millions of new consumers and provide a boost for the retailers contracting their services.