Finally, I've made it to the last post in this series!
As a reminder, I launched this series a few months back to explore various objections people have to couponers or in getting started using coupons themselves. It has been an interesting and challenging process wrestling through each of these topics and I will end with the most difficult objection yet. It goes something like this:
"So…you're using coupons on everything and combining them with sales? And sometimes that means get items for really cheap or even free? The stores must hate you. Plus, that's like stealing."
This is a very valid concern and I didn't want to simply glaze over this topic. Most couponers will simply retort, "the stores are getting reimbursed for the coupons, plus a small handling fee." While this is in most cases true, it's not a complete answer in my opinion. So today I want to share a little more with you about how manufacturers and retailers benefit from coupon usage.
Yes, you read that right. They benefit. They want you to redeem those coupons. Here's why:
- Coupons give consumers an incentive to try a particular brand over another. Think about it. If there is a high-value coupon out there plus a killer sale at the store, won't you choose that brand over its counterparts? Manufacturers are willing to incent customers to try their product in hopes of gaining new, loyal users to that product. You'll also see this strategy frequently used with new products.
- Coupons bring foot traffic into stores. Retailers are pleased as punch when a manufacturer decides to offer a terrfic coupon. It's no coincidence that stores often run sales in conjunction with the coupons manufacturers push out. (Think of the recent Kraft coupons and promotions.) True, retailers will get reimbursed for the coupons, but additionally, they gain customers in their stores. I can think of lots of instances were I went to redeem a coupon on a great sale and just decided to buy my milk or bread at that store to save an extra trip. Have you ever done that?
- Manufacturers are aware that consumers are trending towards thriftiness. Given the current economy, it's no wonder that thriftiness, bargain hunting, and coupons are all the rage. In order to compete with warehouse prices and generic brands, manufacturers more than ever have to work to keep brand loyalty. And they are doing it in increasing numbers. Ron Fischer, President of Redemption Processing Representatives in a 2009 Coupon Forecast* that he's "seen a definite increase with manufacturers thathave never before couponed." This suggests to me that the issuance of quality coupons and their redemption is one way manufactuers can compete for marketshare.
- Manufacturers are attempting to reach a younger generation of couponers. If manufacturers were not profiting by coupons being redeemed, why on earth would they continue to issue them year after year? What's more, why would they continue to find new ways of getting people to use them? Internet coupons, in particular, have seen a huge surge. And it's growing. Users of Coupons.com printed $300 million in savings, and they are targeting $1.0 billion for 2009*. They have also recently launched an application for Facebook users. Other companies have invested in coupons you can upload to your loyalty cards or phone.
- Manufacturers want retailers to give them premium space at their stores. Let's say a manufacturer of a brand of laundry detergent decides to run an aggressive coupon campaign. As a result, foot traffic begins to increase at Grocery Store X. More foot traffic = more sales of other merchandise (See #2). Grocery Store X rewards the manufacturer with more shelf space, or perhaps an end-cap display. This is a win-win situation.
- Manufacturers enjoy free advertising from sites such as mine. Julie Parrish, at Hot Coupon World, brought up this excellent point when I asked for her thoughts on this topic. When a manufacturer releases a great coupon – perhaps to introduce a new product – how many bloggers post about it? I can think of many, many brands I've encouraged readers to buy because of a great coupon and great sale (yesterday, I mentioned Kashi and Pull-ups, for instance). I'm helping you out by finding a deal, but I'm also helping these manufacturers out in the process, too. And they don't have to pay me a penny!
I hope I've been able to shed some light on how retailers and manufacturers benefit from your use of coupons. I also recently emailed the Coupon Information Corporation, a watchdog agency on coupon fraud. I asked directly if using coupons and sales together is the same as stealing. The answer was no, and that "savvy shoppers" would understand combining coupons and sales only maximizes their savings.
Of course, in saying all this I am assuming we are talking about using legitimate coupons in alignment with store coupon policies. You most certainly CAN defraud retailers and manufacturers by using coupons in a way other than intended or outright forging coupons. Coupon fraud IS stealing and certainly nothing to mess with. But using coupons on a store sale? That's just being smart with your money.
Phew! We made it. I hope you've learned a little bit with me in this process of exploring various coupon myths and misconceptions. I have plans underway for my next series, but it's going to take me a little research and time to get my facts straight. Watch for that to come in early August.
* From the Association of Coupon Professionals' E-Zine Winter Newsletter 2009
Photo credit Teri Gosse