Coupons: point and click takes on clip and save

Filed under: Retail |

Clipping and saving coupons is a way of life for many — so it shouldn’t be any surprise that Internet technology giant Google wants a cut.

Google has announced that it will offer local discount coupons to people who use its Google Maps service. Other companies that have been distributing online coupons include ValPak and CoolSavings, and Silicon Valley start-ups like Coupons Inc. and Zixxo.

An estimated 99 percent of the roughly 300 billion coupons distributed annually in the United States — mainly in Sunday newspapers — end up in the trash, unused and unredeemed.

Yet consumer surveys have shown that most American households use coupons, and that the coupon inserts are the second-most-read part of the Sunday newspaper, after the front page.

Charles Brown, co-chairman of the Coupon Council, a coupon advocacy group said proof of the coupon’s worth is that major companies like Procter & Gamble, S. C. Johnson, General Mills and Kraft continue to rely on traditional coupons, and that the yearly number of coupons distributed keeps rising – albeit slightly.

Some marketing experts, however, say that the demise of the paper coupon is inevitable.

The use of online coupons is rising rapidly, by more than 50 percent a year, but they still account for less than 1 percent of the consumer goods coupons distributed, according to the Promotion Marketing Association, a trade group.

There is still some paper handling, since digital coupons typically must be printed and physically turned in at a store. The next stage, according to marketing experts, will come with the spread of digital cell phones with location-tracking and automatic short-range communication technology.

Electronic coupons will be delivered to cell phone owners on demand and redeemed by moving the phone past a cash register scanner.

The national coupon industry is estimated to be a $6 billion a year business. About half of that total is for incentive payments, the amount consumers save when they redeem coupons. The rest goes to the middlemen involved in distributing, collecting and clearing coupon transactions.

Retailers struggle to target Gen Y

Generation Y consumers, ages 17-26, like to multi-task and can be found engaging in a variety of media at one time.

Retailers are finding that getting this demographic’s attention is almost impossible. They like to socialize and they spend a majority of their time surfing the Internet.

According to a RAMA analysis of BIGresearch’s Simultaneous Media Usage database, which monitors more than 15,000 consumers twice a year, 40 percent of those polled said that word of mouth influences their apparel purchases — making it even more challenging to market to this generation. The survey also found that nearly all consumers ages 17-26 regularly or occasionally seek (89.4 percent) or give advice (93.5 percent) to others before buying.

Members of Gen Y use the Internet for everything from reading the news to downloading music. One specific challenge for retailers is that three fourths (74.4 percent) of these consumers spend their free time surfing the Web, while only 47.4 percent use that time to go shopping.

Of those polled, 68 percent said that they regularly or occasionally search online for clothing (56.8 percent reported using Google as their primary search engine) and one in five (20.3 percent) said they allow Internet advertising to influence their apparel purchases.

“The Internet has become a major influence on young shoppers’ decisions,” said Phil Rist, vice president of strategy for BIGresearch.

When Gen Y decides to hit the stores, specialty stores ring in as the retail destination of choice.

For women’s clothing, one in eight (13.5 percent) responded that they most often visit specialty stores, followed by discount stores (8.9 percent) and department stores (8.5 percent). The same rang true for men’s clothing, with 13.4 percent of respondents saying that they most often shopped at specialty apparel stores, 11.3 percent at discount stores and 11.1 percent at department stores.

Eastside gets Bed Bath & Beyond store

Bed Bath & Beyond is opening its third location in Colorado Springs at 5944 Barnes Road, near the intersection of Powers Boulevard.

The 32,000-square-foot store features domestic merchandise and also offers a fine tabletop and giftware department.

New Web site for female retail professionals

The National Retail Federation is making it easier for women to network and get advice from their peers.

NRF Women’s Retail Council and the NRF Women in LP Caucus has launched www.nrf.com/wrc, which also features the NRF Women in Loss Prevention Caucus password-protected directory.

NRF member company personnel can participate in both groups at no charge. The Women in Loss Prevention Caucus also manages a mentoring program for female loss prevention professionals.

Joan Johnson covers retail for the Colorado Springs Business Journal.