Coupons have a long and varied history in marketing and retailing. Different sellers have found them either invaluable or unnecessary, depending on the consumers they were targeting and the type of offerings available through their stores. This story is far from over; the dynamic coupon context is being subjected to even more notable changes in the COVID-19 era. Today, the discussion has shifted in focus, such that rather than asking whether or not to issue coupons, marketers are deciding whether they should be digital or physical.

The answer mainly seems to be digital. Scores of national retailers now provide digital coupons to consumers, whether sent directly to their phones, available through apps, or downloaded actively by the consumers themselves. Some of them already had sent a few digital offers prior to the pandemic; for example, Dunkin’ used to send out coupons to registered users about once per quarter. But in its effort to get people back to its cafes, Dunkin’ has been sending these offers about once a week in the past few months.

Manufacturer brands similarly are embracing the appeal of digital nudges to get people to buy. Laughing Cow has increased its spending on digital coupons by 75 percent, offering free samples that people can pick up in stores, rather than continuing with its pre-coronavirus plan to spend that marketing budget on samples that representatives would hand out at marathons, concerts, and other now-cancelled public gatherings.

Consumers appear to be happy with the shift in focus; whereas in 2019, more than one-third of coupon redemptions involved paper coupons, and less than one-quarter relied on digital versions, those numbers have swapped. Now, 31 percent are redeemed digitally, whereas only 26 percent include paper versions.

The popularity of digital coupons for consumers, retailers, and manufacturers seems reasonable: Consumers appreciate the convenience, in that they do not need to remember to bring along a folder of paper coupons to the store. They also likely receive personalized offers, because retailers can track what they buy, and then offer coupons for complementary items. That’s a key benefit for the retailers and manufacturers too, whose sales should increase due to their improved, personalized promotions.

Furthermore, digital coupons can be posted, deleted, and updated in real-time and constantly, whereas designing, printing, and distributing paper coupons often took months of planning. Walgreens thus has halted printing its weekly circular, figuring that the costs are not worth the benefits. Even CVS, famous for its incredibly long ribbons of receipts with coupons included in the printout, has made those offerings simultaneously available through its app.

Discussion Question:

1. Should companies completely eliminate paper coupons, in favor of digital coupons? What are some of the risks of doing so?
2. How might companies use the data they automatically gather when consumers redeem digital coupons?

Source: Annie Gasparro, “Coupon-Clipping Fades into History as COVID-19 Accelerates Digital Shift,” The Wall Street Journal, September 1, 2020