Two in Three Consumers Use Online Coupons: Survey

Posted on by Chief Marketer Staff

More than two-thirds of U.S. consumers say they have downloaded a printable coupon from a Web site, according to a new report from marketing research firm Morpace.

The Morpace Omnibus Report for March 2011 found that online coupon use is slightly higher among females, 72% of whom reported printing out coupons from Web sites, than among males (59%). Consumers with annual household incomes over $50,000 also over-indexed on printing online coupons; 71% of respondents in that category reported doing so, compared to 61% for those from households with incomes under $50,000.

While printable online coupons have been part of retailers’ incentive strategies for a few years, they are still a relatively small part of total coupon distribution in the U.S.: about 1% of the general coupon distribution in the first nine months of 2010, according to a report from Marx, the coupon-tracking division of Kantar Media. Nevertheless other research suggests that online coupons are redeemed at a much higher rate—10% to 15%– compared to the 1.2% redemption rate for coupons overall.

However recent they are and however small they may be in terms of distribution, online coupons figure large in the public awareness. Morpace found that 94% of consumers polled said they were aware that coupons could be printed from the Internet. That awareness was highest among individuals over 55 (97%) and among Caucasians (96%).

“Perhaps our most surprising finding was not only that so many among the over-55 age group were aware of online coupons but that 69% had actually used an online coupon,” says Andrew Smith, head of Morpace’s customer service division. “What we’ve seen in other research is that the older generation tends to be more concerned about things such as privacy, email addresses getting stolen and other security concerns. So it was definitely surprising to see that age group scored highest for both awareness and usage in this case.”

The Morpace research contained another surprise. Asked to name their preferred site for downloading coupons, 34% of respondents named Google.com. The problem: Google doesn’t currently offer a platform to allow users to download and print coupons. This appears to have been rather an aspirational response by those polled, suggesting that if Google were to offer such a service, consumers would view it favorably. Google in fact came second in the preference rating, behind the 38% who said they preferred to print coupons from Coupons.com and the 22% who expressed a preference for Groupon.com.

“What first piqued our interest in doing this report was Google’s unsuccessful attempt to purchase Groupon,” Smith says. “Google is known for expertise, innovation and usability to consumers. If and when Google does decide to get into this marketplace, they have a huge branding advantage compared to some of the competition. When Google provides a forum of this nature, consumers will come.”

A Google coupon platform might do particularly well with shoppers 18-34, 43% of whom said they would prefer to find online coupons at a Google site.

Preferences aside, asked to name the Web sites they have downloaded coupons from, the largest proportion of respondents mentioned Coupons.com (47%) and Groupon (33%), followed by SmartSource.com (26%) and more distantly by Valpak.com (13%), and LivingSocial.com, RetailMeNot.com and CouponMom.com, all at 12%.

Two-thirds of consumers using online coupons means that there is one-third of consumers who don’t. Since the Morpace research shows almost total awareness of Internet coupons, the study asked non-users to explain why they don’t print them off. The most common reason given (35% of non-users) was that coupons did not seem appropriate for users’ shopping needs, while 22% said they don’t want to take the time necessary to find coupons online. Another 19% said they just typically don’t use coupons no matter how they are distributed, and 7% cited security concerns in downloading coupons from the Web.

The fact that one in three consumers found online coupons not appropriate for their needs “suggest many consumers are not properly educated in regard to online coupon Web sites or have preconceptions about coupon Web sites that are not realistic,” the report concludes. Web sitesthat can better explain the benefits and show the range of online coupons might be able to make inroads with these coupon resisters, Morpace says.

The Morpace research treats the large online coupon sites as equivalent, but both Groupon.com and LivingSocial.com are different in nature from the other sites listed, in that their users pay for the coupons in advance and since they usually offer discounts much deeper than the standard coupon rebate—usually 50% or more at a higher than average price point of $25 a coupon for $50 in product. Those differences have made social coupons less appealing to the CPG brands that make up the great majority of coupons.

However, speaking this week at the Promotional Marketing Association’s integrated marketing conference, Groupon senior vice president of national sales said his company was in discussions with CPG brands on ways to integrate them into the Groupon business model, perhaps by offering a $25 coupon for a basket of goods valued at $50.

The Morpace survey took place using a national panel of 1,000 consumers based on U.S. demographics. This survey did not ask respondents about their use of either mobile coupons or social deals through check-in platforms such as Foursquare, Gowalla or Facebook Places, although Smith says both topics are in consideration for future study.

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