• by Jack Loechner , Staff Writer @mp_research, January 4, 2016

According to Linkable Networks, in a study commissioned to Forrester Consulting to evaluate consumer preferences and pain points regarding in-store consumer packaged goods (CPG) couponing and identify target segments for card-linked offers, the vast majority of consumers use coupons for in-store CPG purchases on a regular basis. 89% of survey respondents had used coupons for at least one purchase in the past three months

While over half of respondents have used traditional paper coupons such as free-standing inserts (FSIs) and direct mail, 37% reported using various types of digital coupons in the past three months, but pain points in both paper and digital couponing, such as forgetting to use coupons, hinder active coupon usage.

Overall, survey respondents cited forgetting coupons as a top-of-mind pain point. This was true for both regular and infrequent coupons users, says the report, indicating that they regularly forget to bring coupons to the store. 79% of consumers have decided not to buy an item because they forgot to bring a coupon to the store. Clipping, cutting, and searching also contribute to this frustrating paper coupon experience, further discouraging consumers from actively using coupons.

Over half of consumers surveyed indicated they would likely link coupons/offers to their credit card or link their loyalty cards to their credit/debit cards, indicating that card-linked offers are a good alternative to clipping and printing, and a reason to use more coupons. There is no need to bring paper coupons to the store, and offers conveniently redeem automatically. Therefore, card-linked offers solve the problem of needing to remember to bring paper coupons to the store, and even offer an easier experience than digital coupons loaded to a smartphone.

The survey shows that both Millennials and young parents have perceptions around digital experiences, such as a greater sense of comfort that digital transactions are safe and secure, which make them more likely to utilize electronic and online-based engagement tools. Card-linked offers are likely to drive customer acquisition and loyalty behaviors for these groups more than others, including trying new brands and using more coupons in general, suggests the report.

Summarizing the data, the report concludes that:

• Coupons continue to drive customer behavior and create sales. In general, coupons are a great customer acquisition and retention tool. Approximately eight in 10 consumers are likely to become repeat buyers or try a new brand based on the availability of coupons/promotional offers
• Easy redemption is paramount in couponing. 73% of survey respondents strongly agree that it is essential for coupons/loyalty programs to be “easy to redeem.” While coupons drive acquisition and loyalty overall, frictionless coupon experiences are non-negotiable. Brands must keep this in mind as they test new coupon offerings and determine the right media mix for coupon and loyalty programs.
• Overall, consumers did not indicate that any coupons were particularly difficult to use, but printed and digital options have room for improvement, says the report. Despite the need to find, clip, and bring FSI coupons to the store, 66% of users rated them as very easy to use. Meanwhile, only 49% and 47% rated print-at-home and web-to-smartphone coupons as very easy to use, respectively. These methods were originally meant to replace FSIs with a better customer experience, but they are not yet delivering it. However, though only 7% of all respondents reported using card-linked coupons in the past three months, 62% of card-linked coupon users rated them as very easy
• Paper coupons are still widely used over digital coupons. Half or more of all respondents have used various types of paper coupons in the past three months, such as FSI, direct mail, and on-package. Meanwhile, 37% or less have used digital coupons. However, Millennials and parents with kids under 18 living at home are swapping FSI clippings for digital coupons loaded to their smartphones

The report concludes noting that retail businesses, looking to stay relevant, must prioritize maximizing customer value in loyalty programs by aligning program offerings with today’s consumer shopping preferences. But those preferences are evolving quickly. Indeed, says the report, the challenges with paper coupons have long been a pain point in the shopping experience, but this is now driving today’s digitally savvy consumers to demand new solutions from brands they engage with on a regular basis.