Will Americans ever give up their paper coupons?

Discussion
Nov 06, 2015

Americans want their coupons, especially the printed kind. That’s the finding of new research by CreditCards.com, which found that even young, connected consumers make use of old fashioned paper coupons to get their discounts.

Eighty-five percent of Americans use coupons, with 24 percent using them often, 29 percent sometimes and 32 occasionally. Even 18- to 24-year-olds use paper coupons about twice as frequently as other methods, such as digital coupons on their cellphones.

"Dead trees aren’t dead when it comes to coupons," said Matt Schulz, CreditCards.com’s senior industry analyst, in a statement. "Plenty of Americans are still opening their snail mail and reading the Sunday paper. I expect paper coupons to lose some market share, though, as consumers and brands get even more comfortable using them electronically."

While the number of coupons distributed through free standing inserts (FSIs) in the first half of 2015 fell 0.9 percent year-over-year, according to Marx, a Kantar Media solution, the value of the offers increased 5.5 percent. Non-foods, particularly personal care items, are driving much of the growth in paper coupons.

Coupon clipping

Photo: RetailWire

Large food, drug and mass retailers continue to participate in joint FSI efforts with manufacturers. Walmart, Walgreens, Target, Dollar General, Family Dollar, CVS, Safeway, Kroger, Publix and BJ’s Wholesale Club were the top 10 chains when it came to pages circulated in the first half of the year.

Why do you think consumers continue to prefer paper coupons compared to digital alternatives? Do manufacturers and retailers have a business interest in getting consumers to convert to other types of offers instead?

Braintrust
"I get a list every week a mile long from our Grocers Association of the fraudulent coupons and every year the numbers grow, so for me online has its share of problems and I hope it can be fixed."
"My guess: paper coupons feel like (free) money — digital coupons don’t. They also serve as a nice reminder."
"It’s a law: New media displace old, but they don’t entirely replace them. Overall, coupons are part of a culture of thrift that transcends economic status. For a significant fraction of consumers, leaving free money in the recycling bin is close to a sin."

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31 Comments on "Will Americans ever give up their paper coupons?"

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Peter Fader
BrainTrust

Paper coupons are such a bad idea for so many reasons. This is one of those cases in which retailers need to show true leadership. They need to take some risks, make some investments and show some courage to move from paper to digital (and to reduce their reliance on coupons overall). Progress to date has been disappointing, but there’s always hope.

Ken Lonyai
BrainTrust

Not sure exactly how the survey was posed, exactly to whom, etc., but the only surprise is the reported 18 to 24 year old statistic. If the stats reflect true behavior, I would imagine that even for them, coupon cutting is an indoctrinated habit or just more fun than going digital. For their elders, it’s clearly a cemented routine.

In the coming years, I still don’t see coupons holding their place. If in the future (maybe in a decade), retailers make a considerate and effective transition to digital-only offers, I think scissor sales will drop steeply with little complaint from consumers.

Tony Orlando
BrainTrust

Boomers love coupons, and they also print certain ones online as well. I don’t see them going away in my lifetime, and digital will grow as well. One huge problem for retailers is the huge amount of fraud with phony coupons being printed online, from free 24-packs of Pepsi, to free appetizers at restaurants. I get a list every week a mile long from our Grocers Association of the fraudulent coupons and every year the numbers grow, so for me online has its share of problems and I hope it can be fixed.

The papers and the mail ares stuffed with offers, and yes I use them for certain things to save money and I also use my phone for Macy and Kohl’s, which help out as well. Both will be viable for a long time.

Max Goldberg
BrainTrust

Consumers prefer paper coupons because digital coupons and their related apps are confusing and require more time to save and use than paper coupons. If manufacturers and retailers want to convert consumers to digital offers, which can be customized and better tracked, they will need to make the digital process easier.

Dr. Stephen Needel
BrainTrust

My guess: paper coupons feel like (free) money — digital coupons don’t. They also serve as a nice reminder.

Chris Petersen, PhD.
BrainTrust

Coupons both trigger awareness and generate a call to action. As such they are an important traffic and conversion tool, especially for food, drug and consumable products.

Research shows that consumers only use about five to seven apps on their phone, and most of them are NOT retailer apps. FSIs are still the one universal way of reaching the “masses” with brand offers that transcend retailers and locations.

But in addition to coupons, consumers also like choice. The smart marketers will enable QR codes or bar codes so that consumers can scan coupons into their smartphones. The even smarter retailers will use that as a segue to engage consumers with store beacons and their apps.

Steve Montgomery
BrainTrust

Admittedly I am not a frequent user of coupons paper or otherwise but I believe there are several reasons. If people are reading the FSIs in the paper then they are looking for something. It could be an item or items in a supermarket or department store flyer. This already implies that they are considering making a purchase.

Once they find a coupon for an item they want they take action, i.e., they cut it out of the paper. This helps reinforce the purchase decision. Once this is done the coupon provides a physical reminder of their intent to purchase.

The article did not indicate the age profile of coupon users. It would be interesting to see if paper users skew older and digital younger. On a side note, while I may not be a frequent coupon user I do appreciate that they are in the paper supporting its continued existence. I still like reading the morning Chicago Tribune (when time allows).

Mark Heckman
BrainTrust
While shoppers are changing their behaviors with gusto these days, digital couponing has not caused the revolution that many had prognosticated. One reason is paper coupons are still in vogue is their visceral nature. Digital coupons require action to select or load, and then the hard part, that is, remembering what you have loaded. Contrast that with paper. Paper coupons are front and center in the shoppers pouch, bag, wallet or purse. Aside from consumer behavioral factors, the paper coupon industry is a behemoth that has no intention of stopping the presses anytime soon. Both Valassis and News America, (the predominant FSI distributors), have much to lose if paper is replaced by digital, in that the pricing on digital coupons is still very much in flux and not nearly as “predictably profitable” as their paper counterparts. Further, CPG brands still hold some skepticism about digital coupons. While they love their flexibility, many brand people still argue that digital coupons are too stealthy and they remain doubtful as to their ability to actually induce an incremental sale. It is also true that only until recently could brands find reasonable critical mass distribution of retailers who could accept load-to-card or load-to-account coupons.… Read more »
Joan Treistman
BrainTrust

Paper coupons make it easier to see the value offered and to use the coupon itself. My studies of shoppers’ visual engagement (via eye tracking) and action orientation with coupons have shown that a consumer who picks up an FSI is seeking out coupons to use. Seems logical of course. That’s the first level of commitment.

Next, they are looking for what they perceive is a good value and worth their time. As they scan the FSI they are guided by visual cues such as copy (e.g., “value/discount/$1”), color (highlighted sections), position and size of the particular offer. These cues help them decide which items to consider or pass by.

Consumers can quickly determine what they are interested in, whether the deal is worthy and save the coupon. Mostly it’s a situation of shoppers being shown what is available (paper coupons) versus having to seek it out (digital alternatives).

It comes down to the consumer’s perspective of what is easy, convenient and worth their while. So far it looks like paper is three out of three.

Ed Dunn
Guest
1 year 11 months ago

There is not enough data to make a full analysis of the paper trail:

“63% of U.S. credit/debit cardholders who use coupons say they most frequently present coupons from newspapers, mailings and other paper products”

It is important to know the 63 percent breakdown of newspaper vs. direct mail vs. picking up a sale paper containing coupons at the front entrance of a retailer.

Gene Detroyer
BrainTrust

As the proportion of newspapers and magazines go more and more digital, where are you going to get the coupons? Neither of my 40-plus-year-old kids get hard copy newspapers anymore, only digital.

Just think about it … was there a time when you could not conceive of getting on an airplane or train without a hard copy ticket? And, now it is “don’t bother me with the paper. Send it to my phone”.

Todd Hale
Guest
Todd Hale
1 year 11 months ago

Retailers and manufacturers are stuck between the generations when it comes to coupon preferences. Nielsen research shows that Boomers still prefer paper-based coupons and while Millennials are more apt to prefer digital coupons to plan their shopping, use of paper-based coupons is still greater among that generation. Digital is less expensive and provides superior means to target shoppers, so lots of investment in that space, but it is not yet time to completely flip the digital switch.

Mohamed Amer
BrainTrust

This is the chicken and egg problem. Do consumers really prefer paper coupons or do they use them because CPG and retail companies continue to push discounts via FSI?

From a consumer perspective, they don’t want to miss out on a discount but the price they pay is having to go through pages of inserts and then clip the relevant coupons. From a CPG or retail perspective, this is a classic element of creating awareness, boosting demand and creating product loyalty.

This is the timeless problem of existing processes backed by a once-winning paradigm facing technology and lifestyle changes that separate generations. Coupon clipping is a lever in an expiring tool kit, its appeal will dwindle — albeit slowly — until the Gen Zs and Millennials become industry decision-makers.

Doug Garnett
BrainTrust

Amid the zeal of the digital we so easily forget that the human animal depends heavily on the physical thing. Physical things can be organized and sorted … stuffed into a purse until the right time appears, kept in coupon sorters to be browsed before every shopping trip, and simply reflect symbolically, in being made out of paper, the paper of money.

It’s stunning to me that anyone would wonder at the truth found here. Coupons on paper are far more effective than coupons digital or coupons automatically credited at the store. With a paper coupon I believe I have something. A digital coupon? It’s all fluff, bits, and a theoretical construct.

Let’s never forget the need for the physical that is human.

John Karolefski
BrainTrust

Part of the reason for the slow transition from paper to digital coupons is generational. Boomers love paper. Meanwhile, Millennials are slow to change over, but they will as digital permeates every aspect of daily life.

In a practical sense, I see paper coupons in my wallet when grocery shopping and use them. I don’t see digital coupons on my smartphone and forget they are there.

Frank Beurskens
Guest
1 year 11 months ago

“A Magazine Is an iPad That Does Not Work” — that was one Millennial’s perspective. Paper and digital trigger different parts of the brain as many studies are discovering. Last month Forbes featured a study on the question and researchers found “When asked to cite the brand (company name) of an advertisement they had just seen, recall was 70% higher among participants who were exposed to a direct mail piece (75%) than a digital ad (44%)”

The tactile nature of print may also appeal from a primal need to physically engage when one is dealing with money/food. We are however finding high usage of in-store coupon delivery where shoppers select from interactive digital displays but choose to print. A both/and solution. Maybe it’s just that touchy-feely thing …

Jack Pansegrau
Guest
Jack Pansegrau
1 year 11 months ago

Just two personal examples: First, Costco’s monthly coupon book. I get a paper copy by USPS and an electronic copy and rarely look at the electronic one — too hard to flip through (although I’m completely digital on my New York Times and Wall Street Journal). AND with Costco, its coupons are automatically utilized at checkout. Second, whenever I do use an online coupon (Fresh & Easy) I feel like I’m holding up the checkout line to find it on my phone and present it, especially if multiple coupons are involved. It’s much easier to simply present the paper copies. So I agree with others. Digital coupons could be adapted but need to be easier, quicker to retrieve and present and definitely easier to review.

That said, I do use digital coupons whenever I shop REI online, so electronic coupons do work quite obviously when shopping electronically.

ken Barnett
Guest
ken Barnett
1 year 11 months ago

The article lacks objectivity. It refers to paper coupons being preferred and then pays that off with a quick slight of hand to talk about FSI value of coupons circulated. All consumers are not the same and all categories are not the same. If a manufacturer offers 10 dollars on 50 dollars, or if drug companies and beauty product companies offer high values tied to regimen products, that adds to values quickly.

The best indication is declining newspaper rates, which is where printed coupons are found. If the paper covers 40 percent of market population and MRI says people under 40, including Generation Xers, are not reading papers, how does preference really grow? There are too many alternatives to the buy button besides what this article suggests. Ask your 25- to 40-year-old to go get a paper for you and look at their face for their print preference.

Dead? No. Diminishing? Yes, for younger people. For products, diminishing fast.

James Tenser
BrainTrust

It’s a law: New media displace old, but they don’t entirely replace them.

Digital coupons are not a one-to-one substitute for printed ones for a a host of reasons. Paper is tangible and lasting. Clipped coupons serve as a convenient shopping reminder. The effort to clip and hand over paper coupons may be less for many individuals as compared with manipulating several apps on a 5″ touchscreen. Shoppers who peruse FSIs may prefer to make their own decisions about what’s relevant for them, as opposed to a digital marketing robot.

As for the enthusiastic acceptance of coupons by Millennials and post-Millennials: Well, employment may be rising slightly, but wages are still low for many young people and coupons help partly bridge the gap.

Overall, coupons are part of a culture of thrift that transcends economic status. For a significant fraction of consumers, leaving free money in the recycling bin is close to a sin.

Graeme McVie
Guest
Graeme McVie
1 year 11 months ago
There are a few factors in play here, the most critical of which is that the medium used to deliver coupons to shoppers is less important than the relevance of the offers contained in the coupons. Coupons need to be 100 percent personalized to the individual shopper and their needs if retailers want the performance of coupons to be maximized. I receive regular emails from my local grocer that state they’ve personally selected a specific group of eight offers for me, but it is rare for more than three or four of the offers to be relevant for me. Inertia or tradition is at play on both the retailer and the shopper sides of the topic. Most retailers are well setup to deliver paper coupons but their ability to deliver digital is still evolving. Shoppers have also been trained over many years to expect to receive paper coupons, and this is especially true for older shoppers. Finally, retailers haven’t fully cracked the code on how to maximize the attractiveness of digital coupons. Over time retailers will no doubt improve in this regard and more shoppers will continue to embrace the digital versions of coupons. Over the next three to five… Read more »
Brian Kelly
Guest
1 year 11 months ago

Paper coupons, like FSIs, have a tactile advantage over digital alternatives.

Of course the more digitally savvy a person is, the more relevant a digital alternative is. That said, adoption of digital wallets is low from too many competing options and technologies, and we know three to five apps is about all anyone can handle. A shake out will come, but not anytime soon based upon how Mobile Pay is slogging along.

So this format remains the preferred method of use despite what manufacturers and retailers want.

Raising the minimum wage won’t decrease the use of coupons. Coupon use correlates to life stage. As life becomes increasingly expensive and a budget must be stretched, savings are pursued. So how to get those coupons into the right pocketbooks? It’s a moving target.

As we like to say, “retail ain’t for sissies!”

Lee Kent
BrainTrust

I don’t necessarily agree that consumers prefer paper coupons. Lots of consumers like coupons and retailers continue to use primarily paper as the medium. When retail switches to digital as its primary focus so will consumers.

For my 2 cents.

Lawrence Wiken
Guest
Lawrence Wiken
1 year 11 months ago

There’s a conflict of needs here. The grocery retailer needs to move on average 35000* products. The average household shopper needs to frequently restock about 150 to 200 products annually. In this digital world marketers, both retailers and CPGs need to focus on the 150 products per the 3500* customers per store. This is a path to relevant and personalized offers. This is when consumers will engage digital coupons. And the cost of products moved will decrease.

*FMI

Craig Sundstrom
Guest

I would tend to agree with those who argue the article’s lack intellectual rigor: add in categories like “sometimes” or “occasionally” and mix paper with digital, and it’s very easy to get to an (erroneous) conclusion like “even 20-somethings still clip coupons.” (Yes, but not like they used to.)

That having been said, I think the reasons for a paper-preference are two fold: 1) they’re a visible presence, so they’re not likely to go unused, as a digital coupon might, and 2) they’re often distributed in (or on) the products themselves. None of these is likely to change soon — or ever — keeping the “(at least) occasionally” category alive for a long time.

Ralph Jacobson
BrainTrust

They are still more convenient than pulling them up on a phone … at least for everyone older than a Millennial. Baby Boomers hate change. That’s why we still love music from the ’80s. CPG and retail need to continue to move toward more and more digital marketing, however, for the foreseeable future, paper still lives on.

Ron X
Guest
1 year 11 months ago

Paper coupons produce price discount, advertising, reminding, and utility effects. By using these effects, marketers can design coupon events that make major contributions to the marketing plans. The goal should not be high redemption rates (since all this does is raise costs). Coupons let manufacturers segment the market. Consumers self-select themselves into full-price and discounted-price groups and these groups tend to have the characteristics that let manufacturers boost profits through price discrimination. Coupons that are too easy, too readily available do not create the right segments for boosting profits. Coupon discounts are real because they are from the manufacturer (not from the retailer after raising their price).

Peter Charness
BrainTrust

Paper coupons are the most expensive to distribute, costly to process, and personally I have a large collection of them that I rarely remember to carry to the store. On the other hand, they have an ease of use and convenience that makes them durable. I can still find a payment card in my wallet much faster than I can on my smart phone, even one as well organized as a Starbucks card/app. So yes it’s in the manufacturers/retailers interest to get rid of them, but if it means adding another dozen apps to your phone, will it really make it easier for the consumer?

Christopher P. Ramey
BrainTrust

Tangible trumps digital because it is real; we see and touch coupons. It’s how we perceive coupons.

Retailers don’t need to “take risks” to get their customers to digital coupons (no doubt they’re already trying). All they need do is provide more compelling coupons online.

Naomi K. Shapiro
Guest
Naomi K. Shapiro
1 year 11 months ago

Paper coupons are tangible, sortable, organizable, remindful, and easy to use, especially when you’re cruising through a store (usually groceries and drugs and beauty) and need to find the item — you just check your coupons, which is not so easy to do on a smartphone or tablet. The second question, do mfrs and retailers have an interest in getting consumers to convert to other forms of offers? You betcha, from a monetary and efficiency point of view. And, yes, with the demise of newspapers and newspaper subscriptions, it’s harder to get the coupons to the consumer, but also by circulars and batches of coupons — in the mail (another medium on the demise). Nevertheless, I still like paper coupons for the reasons stated above.

Mike B
Guest
Mike B
1 year 11 months ago

I think most consumers find paper coupons less of a hassle than digital coupons.

I think every day low price is a better strategy. I will take advantage of any coupon, but sometimes I work so hard to get the coupon, it wasn’t really worth my time. And when I go to a retailer or restaurant who doesn’t run coupons, it’s a lot smoother of a buying experience.

With clothing stores, they all have coupons. Except Dillard’s. So it’s easy there. Go in, buy when clearance is an extra % off, and be done. No checking to see if the item is excluded from the coupon, no making sure I’ve spent $25 requirement to get the coupon discount.

Onn Manelson
Guest

Why give them up? They are win-win for both customers and retailers. For customers, it’s a way of life (sometimes even more than the saving) and for retailers, a legitimate way to create an extra price point and an additional trackable marketing channel, so there is no reason for retailers to stop using them.

The print coupons won’t go away for a while, they are tangible and shoppers have their set routines in how they use them. The digital coupons can now complement this tactic by supporting younger buys as well as more and more buyers that are interested in going digital. Also should be used for increasing adoption and conversion rates on the mobile channel.

wpDiscuz
Braintrust
"I get a list every week a mile long from our Grocers Association of the fraudulent coupons and every year the numbers grow, so for me online has its share of problems and I hope it can be fixed."
"My guess: paper coupons feel like (free) money — digital coupons don’t. They also serve as a nice reminder."
"It’s a law: New media displace old, but they don’t entirely replace them. Overall, coupons are part of a culture of thrift that transcends economic status. For a significant fraction of consumers, leaving free money in the recycling bin is close to a sin."

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